Stocks Slip as Market Pulls Back From Record Highs; Trump Makes Historic Visit to NYSE

Biggest S&P 500 Movers on Thursday

December 12, 2024 06:26 PM EST

Decliners

• Adobe (ADBE) shares plunged 13.7%, the worst performance of any S&P 500 stock on Thursday, after the software provider issued lower-than-expected sales guidance. Although strong demand for artificial intelligence tools helped the company top sales and profit estimates for its fiscal fourth quarter, the revenue outlook raised concerns about Adobe’s traction in the competitive generative AI software market.
• Industrial adhesive manufacturer Nordson (NDSN) also exceeded expectations with its fiscal forth-quarter sales and profits, but its shares tumbled 8.2% following underwhelming fiscal-2025 guidance. The company said a lower backlog and restrained spending by its customers contributed to its conservative outlook but noted a positive contribution from its acquisition of medical components provider Atrion.
• Shares of data storage provider Western Digital (WDC) sank 5.6%. The move lower came after management said that pricing for NAND—a type of flash memory used in smartphones and solid-state drives—will likely remain under more pressure than previously anticipated.
• Stocks in the steel industry came under pressure after analysts at UBS pointed to a less attractive risk/reward profile in the wake of a recent rally. Shares of Nucor (NUE) and Steel Dynamics (STLD) lost about 5% after UBS downgraded its view on both stocks.

Advancers

• Warner Bros. Discovery (WBD) announced plans to separate its television business from its streaming and film studios. Shares of the media giant skyrocketed 15.4% on the news. The company said it would create two distinct operating divisions: one that encompasses its global streaming platform and film studios, and another concentrated on linear TV. The company’s CEO said the restructuring will give Warner Bros. Discovery more flexibility in adapting to the shifting media landscape.

• C.H. Robinson Worldwide (CHRW) shares rose 4.5% as the freight transporter held its investor day. Heading into the event, the CEO of the logistics firm stressed its transformation to a lean operating model, successful deployment of AI technology, and capacity to soften the impact of potential tariffs under the incoming presidential administration.
• Shares of MetLife (MET) jumped 3.6% as the insurance giant unveiled a five-year growth plan designed to boost profits and free cash flow while lowering expenses. The firm highlighted four areas of opportunity it intends to address under its updated strategy: building on its position in group benefits, leveraging its retirement platform, growing its asset management business; and expanding in international markets.

–Michael Bromberg

Broadcom Soars in Extended Trading After Strong Earnings

December 12, 2024 05:51 PM EST

Broadcom (AVGO) reported fiscal fourth-quarter earnings that topped analysts’ expectations, sending shares sharply higher in extended trading Thursday. 

The chipmaker saw fourth-quarter revenue grow 51% year-over-year to $14.05 billion, roughly in line with the analyst consensus compiled by Visible Alpha. Net income came in at $4.32 billion, or 90 cents per share, up from $3.52 billion, or 83 cents per share, a year earlier, beating expectations.

Broadcom’s full-year revenue from artificial intelligence (AI) more than tripled to $12.2 billion, slightly beating its previous outlook of $12 billion.

Looking ahead, the company forecast fiscal first-quarter revenue of $14.6 billion.

Broadcom shares were up 15% in recent after-hours trading.

–Andrew Kessel

Analysts Remain Bullish on Adobe Despite Weak Guidance

December 12, 2024 05:15 PM EST

Adobe (ADBE) shares plunged Thursday after the company issued a disappointing revenue outlook, but analysts still have largely bullish, if tempered, expectations for artificial intelligence (AI) monetization by the company. 

The Creative Cloud company “has been a frustrating stock for much of FY24,” Mizuho Americas analysts said in a note Thursday. The firm maintained its “outperform” rating but lowered its price target to $620 from $640.

Despite the lower price target, the Mizuho analysts “remain confident ADBE will significantly monetize its Generative AI innovations going forward,” they wrote. 

Adobe Digital Media President David Wadhwani said the company plans to introduce a more expensive version of its Firefly generative AI toolset, according to an earnings call transcript provided by AlphaSense. The offering is meant to “monetize new users” and increase average revenue per user, Wadhwani said.

Bank of America (BofA) analysts on Thursday lowered their Adobe price target to $605 from $640 but similarly maintained their “buy” rating.

The BofA analysts described the most recent quarter as ending “a year of delayed gratification for AI,” although they said they’ve seen “some encouraging leading indicators for reacceleration as we head into next year.”

Adobe shares fell 14% to close at $474.63 on Thursday. The stock is now down 20% since the start of the year.

–Andrew Kessel

MetLife Stock Jumps on New Long-Term Growth Strategy

December 12, 2024 04:21 PM EST

MetLife (MET) shares surged Thursday when the insurance provider announced a new strategic plan to “accelerate growth across global platform while delivering attractive returns and all-weather performance.”

The company reported that ahead of its investor day it was introducing the five-year “New Frontier” program targeting returns of double-digit adjusted earnings per share (EPS) growth, 15% to 17% adjusted return on equity, a one-percentage-point cut in direct expense ratio, and free cash flow of $25 billion. 

CEO Michel Khalaf said that “New Frontier” is designed to build on MetLife’s previous five-year “Next Horizon” strategy introduced in 2019 to “simplify and differentiate the company.” Khalaf added that MetLife operates “in highly attractive markets, with deep competitive moats and strong tailwinds,” giving it the opportunity “to deliver growth and attractive returns with lower risk.”

The insurer said that “New Frontier” would focus on four key areas of opportunity: extending leadership in group benefits, capitalizing on a unique retirement platform, accelerating growth in asset management, and expanding in high-growth international markets. 

MetLife shares gained 3.6% on Thursday. The stock is now up 26% so far in 2024, roughly in line with the S&P 500’s increase over the period.

–Bill McColl

Gold Set for ‘Much More Modest’ Growth in 2025

December 12, 2024 02:34 PM EST

After hitting multiple record highs this year and notching its best yearly performance in a decade gold is set for slower growth next year, according to the World Gold Council.

Gold prices jumped 28% in the year through November in U.S. dollars, as central bank and investor buying offset slowing growth in consumer demand, especially from China, the council said in its 2025 outlook released Thursday.

“The market consensus of key macro variables such as GDP, yields and inflation—if taken at face value—suggests a positive but much more modest growth for gold in 2025,” the council said.

Gold could gain even more, the council said, if central banks ramp up their acquisitions; or “a rapid deterioration of financial conditions” lead investors to seek out safe-haven assets. Chinese consumers, who have stayed on the sidelines of gold-buying this year as their economy slowed, also could change the balance if they come back in, the council said.

On the flip side, a reversal by the U.S. Federal Reserve of its interest-rate cutting cycle will hurt investors’ demand for gold. When rates rise, the yields on lower-risk investments like Treasury bonds can look more favorable when compared with gold.

Read the full article here.

–Nisha Gopalan

Trump Promotes Lower Taxes During Historic NYSE Visit

December 12, 2024 01:35 PM EST

Donald Trump rang the opening bell and walked the trading floor at the New York Stock Exchange on Thursday, becoming the first president-elect to visit the exchange.

Trump, surrounded by family, cabinet nominees and executives from major companies, vowed to cut taxes and expedite the approval process for investments made in the U.S.

He also expressed support for the development of artificial intelligence through investment in energy projects.

The event coincided with Trump being named Time Magazine’s Person of the Year for the second time. He was given the title in 2016 after his first successful run for president. 

Read more about Trump’s visit to the NYSE here.

–Colin Laidley

Warner Bros. Discovery Shares Soar on Restructuring

December 12, 2024 12:22 PM EST

Warner Bros. Discovery (WBD) became the latest media giant hit by the rise of cord-cutting and streaming to announce a restructuring, with plans to split its TV business from its streaming and film studios.

The news drove shares up over 15% in afternoon trading Thursday, putting the stock back into positive territory for the year.

Warner Bros. Discovery said Thursday it will create two distinct operating divisions, one focused on global linear TV with “news, sports, scripted and unscripted programming” and the other housing its global streaming platform–which includes Max—and film studios.

Warner Bros. Discovery said it expects the new corporate structure to be in place by mid-2025.

Media firms have been struggling to navigate the decline of traditional TV operations as rivals like Netflix (NFLX) surge in popularity, while also navigating the transition to streaming. Comcast (CMCSA) last month announced plans to spin off its NBCUniversal cable TV networks, including channels like MSNBC, CNBC, and E!.

–Nisha Gopalan

Adobe Price Levels to Watch as Stock Sinks on Weak Outlook

December 12, 2024 10:51 AM EST

Adobe (ADBE) shares plunged early Thursday after the multimedia software provider issued a revenue outlook that fell short of Wall Street expectations.

Since mid-October, Adobe shares have traded higher within a rising wedge, mimicking a similar pattern that formed on the chart between July and September. Interestingly, an earnings gap breakdown followed the earlier formation, similar to what’s happening after the company’s latest quarterly results.

Investors should watch crucial support levels on Adobe’s chart around $500, $475, and $440, while also monitoring important overhead areas near $565 and $635.

The stock was down 13% at around $480 recent trading.

Read the full technical analysis piece here.

–Timothy Smith

ServiceTitan IPO Prices Above Expectations

December 12, 2024 09:53 AM EST

ServiceTitan is set to begin trading today on the Nasdaq under the ticker symbol “TTAN” following an initial public offering (IPO) that was priced above the company’s expectations.

The provider of software services for trades businesses sold 8.8 million shares at $71 each, above its updated estimate of $65 to $67 per share. Last week, ServiceTitan anticipated a sale price of $52 to $57 per share.

At the new price, the IPO raised nearly $625 million, and valued the company at $6.3 billion.

In addition to yesterday’s sale, ServiceTitan is offering the underwriters a 30-day option to purchase an additional 1.32 million shares at the $71 price. 

Co-founders Ara Mahdessian, who is also CEO, and Vahe Kuzoyan launched ServiceTitan in 2012 as a way to help their immigrant parents run their trade businesses. They now report having approximately 8,000 active customers.

–Bill McColl

Tesla Levels to Watch With Stock at Record High

December 12, 2024 09:04 AM EST

Tesla (TSLA) shares soared to a new all-time high Wednesday, the first time it’s done so in three years, as the stock gained ground for the sixth straight day amid a huge post-election rally.

The stock has surged about 70% since election day last month on optimism that CEO Elon’s Musk’s close association with President-elect Donald Trump could benefit the automaker.

Since breaking out from an ascending triangle early last month following the election, Tesla shares have continued to trend sharply higher.

The measuring principle, which calculates the percentage change between the ascending triangle’s lower and upper trendlines and adds it to the pattern’s top trendline value, forecasts a bullish price target of $585.65.

Investors should watch key support levels on Tesla’s chart around $380 and $300.

The stock was down 1% at $421 in recent premarket trading Thursday.

Read the full technical analysis piece here.

–Timothy Smith

Futures Point to Lower Open for Major Indexes

December 12, 2024 08:06 AM EST

Futures tied to he Dow Jones Industrial Average were down 0.1%.

S&P 500 futures were off 0.2%.

Nasdaq 100 futures slid 0.4%.