Stocks Fall, 10-Year Yield Dips as Labor Market Data Points to Cooling Economy

Equity Indexes Wrap: Airlines, Cruise Operators Jump; Oil and Chip Stocks Drag Down Indexes

14 minutes ago

The Dow

Walgreens Boots Alliance (WBA) shares rose 4.3%, continuing to rebound after closing at a 25-year low on Nov. 30.

Boeing (BA) shares added 1.2% after reports it delivered 46 narrowbody 737s last month, putting it close to reaching its full-year delivery target. 

Shares of Disney (DIS) rose 0.8% after SAG-AFTRA members approved the union’s contract negotiated during a 118-day strike earlier this year. 

McDonald’s (MCD) recovered from early losses to end the day up 0.1% after saying at its Investor Day that it plans to open 9,000 new restaurants by 2027. 

American Express (AXP) shares fell 1.9% a day after CEO Steve Squire, in response to a question alluding to speculation Amex could replace Goldman Sachs as Apple’s credit card partner, said Amex’s “premium card base” was a barrier to partnering with some companies with broad consumer bases. Apple (AAPL) shares fell 0.6%. 

The S&P 500

Campbell Soup (CPB) led the S&P 500, gaining 7.1% after its quarterly earnings beat Wall Street estimates as price hikes offset a decline in sales volume. 

Shares of Delta Air Lines (DAL) gained 3.5% after it reiterated its full-year guidance and forecast strong travel demand this holiday season. The promising outlook also lifted peers United Airlines (UAL)—up 3.4%—and Southwest Airlines (LUV)—up 3%.

Travel stocks got an additional boost from an International Air Transport Association (IATA) report forecasting airline revenue will rise to a record next year amid continued strength in the travel and tourism sector. Cruise operator Carnival Corp. (CCL) gained 5.9%, while competitors Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean (RCL) each rose 3.4%.

CVS Health (CVS) rose 3.5%, adding to yesterday’s gains on its 2024 earnings outlook and new business initiatives. 

Citigroup (C) rose 2.5% after it reiterated its 2024 full-year guidance despite declining trading revenue. CFO Mark Mason also said the bank’s reorganization would likely be completed by the end of the first quarter of next year.

Brown-Forman (BF.B) led the index lower, falling 10.4% after the maker of Jack Daniels whiskey lowered its full-year sales and earnings outlook. 

Shares of Constellation Energy Corp. (CEG) fell 4.8% as natural gas prices tumbled. Energy stocks underperformed Wednesday, with Marathon Petroleum (MPC), Halliburton (HAL), and Marathon Oil (MRO) all falling more than 3%. 

Cigarette maker Altria (MO) fell 2.8% after competitor British American Tobacco said it would write down the value of its U.S. brands by nearly $32 billion amid economic headwinds and weak demand. 

The Nasdaq 100

Lucid Group (LCID) shares rose 5%, rebounding from yesterday’s losses following price cuts on the luxury electric vehicle maker’s least expensive model. 

Old Dominion Freight Line (ODFL) shares lost 5.5% after it said revenue fell on a year-over-year basis in November as a slowing U.S. economy weighed on shipment tonnage. 

Shares of Advanced Micro Devices (AMD) fell 1.3% after unveiling its Instinct MI300X “accelerator chip,” a graphics processing unit it claims can run artificial intelligence programs faster than products from rival and market leader Nvidia. 

Shares of Nvidia (NVDA) fell 2.3% as tech giants Microsoft (MSFT) and Meta (META) both said they would use AMD’s new chip. 

Asana Warns About Lackluster Renewals; Shares Fall

1 hr 3 min ago

Shares of Asana Inc. (ASAN) plunged 16% Wednesday as the maker of work management software warned that the company is facing difficult economic times as customers limit their spending.

The company’s renewal base has been impacted by continuing macroeconomic headwinds, executives said on the company’s earnings call Tuesday after close. However, they noted that Asana is seeing signs of stabilization in new business.

The market’s negative reaction from investors Wednesday came even as the company posted better-than-expected results and gave strong guidance. 

Despite Wednesday’s selloff, shares of Asana are up more than 45% for the year.

-Bill McColl

Energy Stocks Sink on Tumbling Oil Prices

1 hr 51 min ago

Energy was Wednesday’s worst-performing sector by far, trading nearly 1.5% lower in the afternoon as oil and gas prices fell amid demand concerns. 

Natural gas futures fell 5% Wednesday, sending shares of gas utility Constellation Energy Corp. (CEG) 4% lower. Refiner Marathon Petroleum Corp. (MPC) fell more than 3% as the price of U.S. crude slumped 4% and gasoline prices slid to their lowest since January. Oilfield services provider Halliburton’s (HAL) shares slipped 3%. 

British American Tobacco Falls to 13-Year Low Following $31 Billion Write-Down

2 hr 28 min ago

American depositary receipts (ADRs) of British American Tobacco (BTI) tumbled over 8% Wednesday to their lowest since 2010 as the cigarette maker said it would write down the value of its U.S. brands by 25 billion pounds ($31.5 billion).

The maker of Camel, Lucky Strike, and other brands explained that in the U.S. “macro-economic pressures and the continued proliferation of illicit modern disposables have continued to impact combustibles industry volume in the second half of the year.”

As a result, BAT indicated it plans to accelerate the company’s transformation away from selling traditional cigarettes and encouraging customers to switch to other tobacco products.

The company noted that because of all these changes, it expects revenue and profit growth in low-single-digit percentages in 2024, with progressive improvement to a 3% to 5% rise in revenue and mid-single-digit profit gain by 2026.

-Bill McColl

Oil Falls to 5-Month Low

3 hr 3 min ago

Oil futures slumped to their lowest level since July on Wednesday. West Texas Intermediate contracts fell 4% to about $69.50. Brent crude, the European benchmark, dropped 3.6% to less than $75.

Oil prices have tumbled in the last two months despite the best efforts of OPEC+, which late last month announced aggressive production cuts. Concerns about demand amid a slowing U.S. and global economy have contributed to the decline, as have doubts about OPEC members’ commitment to the production curbs.  

Cheaper oil has given U.S. drivers a break at the pump. Gas prices—at $3.23 a gallon—are the lowest they’ve been since January, according to data released Monday by the Energy Information Administration. And they fell further to $3.22 a gallon on Wednesday according to AAA.

Midday Movers

4 hr 29 min ago

Campbell Soup Co. (CPB): Shares rose more than 7% after the company reported better-than-expected earnings despite sales declining 2% year-over-year as shoppers shunned ready-to-eat and single-serve meals in favor of more economical options. 

Travel stocks: Delta Air Lines (DAL) shares added more than 4% after the company reiterated its full-year guidance, a relief for investors concerned cash-strapped consumers are cutting back on travel spending. Delta’s business update sent other travel stocks higher. United Airlines (UAL) rose nearly 5%, while cruise operators Carnival Corp. (CCL) and Norwegian Cruise Line Holdings (NCLH) rose 6% and 5%, respectively.

Citigroup (C): Shares rose more than 4% after CFO Mark Mason said at a conference that the bank is on track to meet its full-year revenue guidance despite declining trading revenue.

ExxonMobil (XOM): Shares of the oil giant fell more than 1% despite saying it would cut $6 billion in structural costs by 2027 and increase share buybacks to $20 billion a year—up from this year’s forecast total of $17.5 billion—through 2025. Reports yesterday indicated Exxon’s $60 billion acquisition of Pioneer Natural Resources (PXD) will be investigated by antitrust regulators. 

Brown-Forman Shares Sink on Lagging Sales, Lowered Guidance

5 hr 5 min ago

Shares of Brown-Forman (BF.B) fell 10% Wednesday morning after the maker of Jack Daniels whiskey reported lower-than-expected sales in the first half of its 2024 fiscal year and cut its full-year outlook.

Sales fell 4% in the U.S. as higher prices failed to counter lower sales volume, especially of its whiskey brands, which saw total sales decline 2% year-over-year. Declining sales were partially offset by a 41% increase in sales at the company’s ready-to-drink unit and 17% sales growth in emerging markets.

The company also said operating income increased amid a more favorable price/mix and the normalization of supply chains. Still, higher interest expenses led diluted earnings per share to fall 1% to $0.98.

Brown-Forman cut its full-year outlook as “evolving global macroeconomic conditions continue to create a challenging operating environment tempering our expectations.” The company now expects net sales growth of between 3% and 5%, down from a prior range of 5% to 7%. Forecasted operating income growth was lowered to a range of 4% to 6% from a prior estimate of 6% to 8%. 

Bank Stocks Gain as CEOs Resist Regulator Proposals in Senate Testimony

6 hr 21 min ago

The CEOs of some of the nation’s largest banks gathered before the Senate Banking Committee on Wednesday morning to convince Congress the banking sector is stable after this Spring’s regional banking crisis. 

The executives will also push back against rules proposed by the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency that would raise capital requirements for America’s largest banks. The changes have been dubbed “Basel III endgame,” the final step in the implementation of the Basel III agreement initiated after the Global Financial Crisis. 

“Ironically, a proposal to mitigate risk will create even more risk in the financial system,” said…