US Stocks Close Higher to Snap Three-Session Selloff

S&P 500 Top Movers on Tuesday

August 06, 2024 05:48 PM EDT

Advancers

• Shares of Kenvue (KVUE), parent company of Band-Aid, Tylenol, and other consumer health care products, posted the strongest performance in the S&P 500, soaring 14.2%. The former unit of Johnson & Johnson (JNJ) beat second-quarter sales estimates and affirmed its above-consensus guidance for the full year. CEO Thibaut Mongon said Kenvue remains in the early stages of a transformation “into a bolder, more agile organization.” 

• Uber Technologies (UBER) shares added 11.8% after the ridesharing company drove past analysts’ revenue and net income estimates for the second quarter. Gross bookings jumped 19% from
  a year ago, while profits more than doubled, reaching $1.02 billion.
• Shares of Royal Caribbean Cruises (RCL) sailed 8.5% higher after analysts at JPMorgan called Royal Caribbean “best in class” in the cruise industry. The analysts cited Royal Caribbean’s popularity among travelers, cost discipline, and growth plans as support for their “overweight” rating on the stock.

Decliners

• Shares of Henry Schein (HSIC), a distributor of dental and medical equipment, dropped 8%, marking the heaviest losses of any S&P 500 constituent. Henry Schein’s second-quarter sales and profits fell short of expectations, and the company said it could take longer than expected for it to recuperate from a cybersecurity breach that disrupted its operations last year.
• Expeditors International of Washington (EXPD) shares fell 4.6% after the freight forwarding and logistics firm reported a year-over-year decline in profits, pressured by higher costs. Although Expeditors International posted an increase in airfreight tonnage volume from a year ago, its ocean container volume declined.
• Vulcan Materials (VMC) shares sank 4.3% after the provider of construction materials reported lower-than-expected quarterly sales and profits. The maker of construction aggregates also cut its forecast for full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Vulcan noted that high interest rates remain a drag on the housing sector, which lowers demand for its products.

–Michael Bromberg

Kenvue Jumps to Four-Month High After Earnings

August 06, 2024 04:39 PM EDT

Kenvue (KVUE) shares surged Tuesday after the company affirmed full-year guidance that topped analysts’ expectations.

The Tylenol and Band-Aid parent, formerly the consumer healthcare unit of Johnson & Johnson (JNJ), continues to expect 2024 net sales growth between 1% and 3%, with the midpoint well above analysts’ expectations of 1.4%, per Visible Alpha.

In the second quarter, the company posted earnings per share (EPS) of 3 cents on revenue of $4 billion. Analysts had called for EPS of 24 cents on revenue of $3.93 billion. Adjusted EPS of 32 cents topped estimates.

Kenvue shares jumped nearly 15% to a four-month high on Tuesday, leading S&P 500 gainers.

–Andrew Kessel

What the ‘Carry Trade’ Had to do with Monday’s Rout

August 06, 2024 02:48 PM EDT

The yen carry trade, a popular investment strategy that exploits the gap between low Japanese interest rates and high rates elsewhere, may be one key factor in recent market volatility.

A more aggressive Bank of Japan and soft U.S. economic data have threatened to narrow the gap between Japanese and U.S. interest rates, prompting an unwinding of the trade.

Analysts say the future of the carry trade largely depends on the trajectory of the U.S. economy and the magnitude of any response by the Federal Reserve.

Read the full article here.

–Colin Laidley

Nvidia Recovers as Analysts Highlight AI Leadership

August 06, 2024 01:21 PM EDT

Nvidia (NVDA) shares jumped Tuesday, recovering from a steep selloff the previous session that came amid reports its Blackwell artificial intelligence chip will be delayed.

Analysts suggested that while a delay could lead to near-term volatility for Nvidia, they remained bullish on the chipmaker’s long-term prospects, highlighting its AI strength.

Nvidia’s “competitive position remains sound, and we don’t expect any share loss from a minor delay,” Oppenheimer analysts said, adding that they see Nvidia as “best positioned in AI, benefiting from full stack AI hardware/software solutions.”

A delay “could drive some volatility in Nvidia’s near-term,” Goldman Sachs analysts said, though they “expect there to be little to no impact on CY2025 earnings and, most importantly, the company’s long-term competitive position.”

Citi analysts, who had removed Nvidia from their “upside catalyst watch” over the weekend following reports of the delay, still maintained a “buy” rating for the stock.

Calling Nvidia’s potential supply constraints a “solvable” issue, Bank of America analysts suggested they would view any sell-off as an “enhanced buying opportunity.”

An Nvidia spokesperson told Investopedia that “Blackwell sampling has started, and production is on track to ramp” in the second half of the year, adding, “beyond that, we don’t comment on rumors.”

Nvidia shares were up 6% in recent trading, recovering a chunk of the 14% decline for the stock over the previous three sessions.

–Naomi Buchanan

Uber Stock Jumps After Earnings

August 06, 2024 12:04 PM EDT

Uber (UBER) stock jumped Tuesday after the ride-sharing giant’s second-quarter earnings beat analysts’ estimates as gross bookings grew 19% year-over-year.

The company reported a 16% revenue bump to $10.7 billion, above Visible Alpha consensus estimates. Net income also easily surpassed estimates at $1.02 billion, and more than doubled from last year’s $394 million.

Gross bookings came in just above estimates at $39.95 billion, split largely between Uber’s Mobility division ($20.6 billion) and its Delivery unit that includes Uber Eats ($18.1 billion).

JPMorgan analysts said in a note following the earnings report that they were encouraged by the acceleration of growth in Mobility and the focus on profitability of Uber’s Delivery segment.

Uber shares were up nearly 9% around midday Tuesday and were among the biggest gainers on the S&P 500

–Aaron McDade

Caterpillar Leads Dow Gainers After Profit Beat

August 06, 2024 10:55 AM EDT

Caterpillar (CAT) shares rose Tuesday as the construction equipment maker’s second-quarter profits beat analysts’ estimates, offsetting another quarter of revenue falling short of expectations.

Revenue slipped 3.6% year-over-year to $16.69 billion, coming in short of analysts’ estimates compiled by Visible Alpha. Profits fell 8.2% to $2.68 billion, narrowly beating projections, but adjusted net income, accounting for roughly $250 million in one-time expenses like restructuring costs, beat estimates by a wider margin and rose from last year to $2.93 billion.

Caterpillar shares were up more than 4% in recent trading, making it the top gainer on the Dow Jones Industrial Average.

–Aaron McDade

Palantir Jumps After Strong Earnings, Guidance Boost

August 06, 2024 09:55 AM EDT

Palantir (PLTR) shares jumped in early trading Tuesday after the data analytics company topped Wall Street’s quarterly estimates and raised its full-year outlook amid strong demand for its AI software services.

The shares staged an impressive intraday reversal Monday on the highest trading volume since early May to close towards their high of the day after initially opening 12% lower, indicating larger market participants may have anticipated a big earnings-driven move.

Palantir shares, which were up more than 7% at $25.84 in recent trading, could face selling pressure at key levels on the chart including $27, $29, $39, $45, and $50.50.

Read our full technical analysis here.

–Timothy Smith

Major Indexes Poised to Open Higher Tuesday

August 06, 2024 08:53 AM EDT

Futures tied to the Dow Jones Industrial Average were up 0.4%.

S&P 500 futures were also up 0.4%.

Nasdaq 100 futures were up 0.3%.