Stock market news for May 14, 2024

U.S. stocks closed higher on Tuesday afternoon.

The Nasdaq Composite jumped to a new closing high, adding 0.75% to settle at 16,511.18. The S&P 500 gained 0.48% to finish at 5,246.68, while the Dow Jones Industrial Average added 126.60 points, or 0.32%, closing at 39,558.11.

— Lisa Kailai Han

The market has reacted positively to negative economic surprises in recent times, but Citi believes this “bad news is good news” narrative will soon change.

“Seasonally, surprises tend to trough around now and, with Fed hikes off the table for the near future, good economic news will likely be welcomed by risky assets,” wrote analyst Nathaniel Rupert.

He added, “However, with cracks appearing in the labor market, more below-consensus data would eventually weigh on equities (even though the first cut may be viewed positively), as would a tightening in financial conditions in our view.”

— Lisa Kailai Han

There is reason to believe the S&P 500 could be in for a summer rally and that the recent pullback will be just a blimp, according to Bank of America.

“If the SPX follows bullish seasonality and positive breadth signals, the index should embark on a summer rally,” Stephen Suttmeier, the firm’s technical research strategist, wrote to clients on Tuesday. “This suggests that the April into May corrective phase is likely a bullish continuation pattern.”

Despite a tough start to the second quarter, a recent return to gains has pushed the broad index just 0.2% off its flatline for the three-month period. The index is up nearly 10% on the year.

— Alex Harring

Paramount Global fell more than 7% after a report from CNBC’s David Faber that Sony is “rethinking” its offer to buy the company.

Sony and Apollo sent a letter earlier this month to Paramount Global’s board expressing interest in an all-cash $26 billion offer for the company. Sony would be the majority shareholder and Apollo a minority stakeholder.

Many of Paramount Global’s common shareholders publicly supported the Sony-Apollo offer over a competing bid from Skydance Media, which did not pay as large of a premium to as many class B shareholders.

The Paramount Global special committee said on May 3 that it would end exclusive talks with Skydance Media and its two private equity backers, KKR and RedBird Capital, to examine the Sony-Apollo bid.

— Alex Sherman

OpenAI’s Monday event highlighting its new desktop app and some refreshes “raises the bar, again, for consumer chatbots,” according to Bank of America analyst Vivek Arya.

He wrote in a Tuesday note that the event “ups the ante for AI assistant,” adding that semiconductor stocks should see multiyear growth tailwinds from the computing and networking capabilities needed to appease the expanding artificial intelligence use cases.

Analyst Wamsi Mohan also highlighted Apple as a potential beneficiary from OpenAI and multimodal assistants and the potential productivity gains.

“Much of the demo used a ‘hardwired’ iPhone to lower latency of real time interaction,” he wrote. “Maintain Buy on benefits from GenAI at edge with gross margin upside and momentum in Services.”

Even so, Rosenblatt’s Barton Crockett views the event as a potential competitive pressure point for Alphabet ahead of its Google I/O event. The developments also seem to turn up the head on Apple, which has struggled for years to create similar capabilities for its Siri component, he added.

“We suspect that Apple is nowhere near, internally, to what OpenAI just demoed,” he wrote. “If Google can’t show an ability to match OpenAI at I/O, then Apple will be under meaningful pressure we believe to partner with OpenAI to modernize Siri for the current state of AI.”

— Samantha Subin

During Tuesday’s trading session, 24 stocks in the S&P 500 hit new 52-week highs.

Of these names, six stocks reached new intraday highs. Here are the names that met this milestone:

• Aflac Inc. trading at all-time-high levels back through our history in 1973
• Brown & Brown trading at all-time highs back to when it became publicly traded on the New York Stock Exchange in 1997
• Goldman Sachs trading at all-time-high levels back to its initial public offering in May 1999
• Analog Devices trading at all-time highs back through our history to 1972
• NXP Semiconductors trading at all-time highs back to its IPO in August 2010
• Welltower trading at all-time-high levels back to its incorporation as Health Care REIT in 1985

— Lisa Kailai Han, Christopher Hayes

Meme stocks were losing steam in early afternoon trading and hovering well below their highs of the day.

Shares of GameStop were last up 33.7% for the day at $40.72 per share. The stock’s high of the day came at the opening bell, when it hit $64.83 per share.

AMC Entertainment has similarly cooled off. The stock was last up 23.7% at $6.42 per share. It traded as high as $11.88 per share Tuesday morning.

— Jesse Pound

On Holding shares headed for their best day in more than a year following a strong earnings report.

The shoemaker climbed nearly 17.5% in midday trading. If that holds through close, it will mark the stock’s biggest one-day gain since March 2023, when the stock soared more than 26% in a session.

Tuesday’s jump came after the Swiss company posted adjusted earnings per share and net sales that were both higher than forecast by analysts polled by FactSet. On has also benefited from demand for more comfortable clothing such as padded shoes.

— Alex Harring

These are some of the stocks making the biggest moves midday:

• Alibaba — The Chinese technology company shed 7% after posting an 86% drop in net income from a year ago for its fiscal fourth quarter. Elsewhere, revenue topped expectations.
• Sony — U.S.-listed shares jumped 5.3% after quarterly revenue came in at 3.5 trillion yen, above the consensus expectation of 2.89 trillion yen from analysts polled by LSEG. However, operating profits came in lower than analysts forecast.
• Vodafone — U.S. shares popped 5% after the U.K.-based telecommunications company posted full-year profit that beat expectations.

Click here for the full list.

— Alex Harring

The energy sector underperformed the S&P 500 on Tuesday, pulling back around 0.5% while the broad market index gained 0.2%. Marathon Petroleum led Tuesday’s downturn, declining 3.7%.

Month to date, energy and consumer staples are neck and neck for worst-performing sectors. Both groups are down nearly 0.8%.

Credit card default rates hit their highest level in nearly 13 years at the beginning of 2024, the New York Federal Reserve reported Tuesday.

The central bank’s Quarterly Report on Household Debt and Credit showed the share of “seriously delinquent” debt, or at least 90 days behind, rose to 6.86% of outstanding balances in the first quarter of 2024, the highest since Q2 of 2011. At the same time, auto delinquencies moved to 2.78%, the highest since Q2 of 2010.

Those increases came even though total credit card balances fell to $1.12 trillion, a decline of $14 billion. However, total consumer debt rose to $17.69 trillion, an increase of $184 billion, or 1.1%.

— Jeff Cox

Although U.S. federal debt boosts the economy in the short term, Wolfe Research foresees it posing key risks to the market over time.

“We expect transfer payments, the CHIPS Act, the IRA, and infrastructure spending to continue to provide fiscal tailwinds for the economy and stock prices in the quarters ahead,” wrote chief investment strategist Chris Senyek. “However, the huge problem is that U.S. federal debt is on an unsustainable long-term trajectory! More specifically, the CBO projects that publicly held federal debt will reach an all-time high in 2029!”

Senyek noted two specific key risks.

For one, “bond vigilantes” could push back, ultimately sending yields higher. Additionally, interest payments could also squeeze out spending faster than expected, the analyst added.

— Lisa Kailai Han