Markets News, October 10, 2024: Stocks Slump as Investors Digest CPI Inflation and Jobs Data Surprises

Biggest S&P 500 Movers on Thursday

October 10, 2024 06:11 PM EDT

Decliners

• Shares of solar panel producer First Solar (FSLR) plunged 9.3%, the most of any S&P 500 constituent, after Jefferies reduced its price target on the stock to $266 from $271. Research analysts warned of potential delays that could restrain First Solar’s volumes in the current quarter and those to come. Other solar industry stocks also moved lower: Shares of solar technology firm Enphase Energy (ENPH) slipped 5.8%.
• Semiconductor manufacturer Advanced Micro Devices (AMD) unveiled new artificial intelligence (AI) chips at its “Advancing AI 2024” event in San Francisco on Thursday. Its shares dropped 4%, with some analysts suggesting that its presentation may not have been sufficient to convince investors that its new products will be able to compete with AI chips from Nvidia (NVDA).

• Shares of Generac Holdings (GNRC), which provides home generators and other power solutions, fell 3.5% as Hurricane Milton moved through Florida. Thursday’s downturn reversed a portion of the gains posted by the stock ahead of the storm.

Advancers

• The day’s strongest performance in the S&P 500 belonged to shares of cybersecurity firm CrowdStrike Holdings (CRWD), which climbed 5.6% after RBC Capital included the stock on its list of top picks in the software space. Analysts believe the company is successfully moving past an incident in July when a faulty software update caused widespread IT outages around the world.
• Shares of fertilizer maker Mosaic Co. (MOS) gained 4.4%. Based in Tampa, Fla., Mosaic faced uncertainties about the potential impact of Hurricane Milton on its operations. The company said Thursday that it will begin to assess the impact of the storm as soon as conditions allow.
• Shares of Micron Technology (MU) shares added 3.9%. Although AMD’s AI event may have failed to generate much investor enthusiasm, its new chips included more memory than previous products, underlining the importance of high-bandwidth memory for AI processes. Micron, which manufactures memory chips, is a partner of AMD.

–Michael Bromberg

Fed’s Economic ‘Soft Landing’ Just Got Bumpier

October 10, 2024 05:24 PM EDT

Several pieces of economic data Thursday complicated the Federal Reserve’s plans to gradually lower interest rates in the coming months and bring the economy in for a “soft landing.”

Reports on consumer prices and jobless claims delivered some mixed news on how the Fed is doing to stave off inflation and unemployment. The Consumer Price Index fell to its lowest year-over-year rate since 2021 but ran higher than forecasters expected in September.

Not only that, but the 12-month rate of “core” inflation, which leaves out volatile prices for food and energy, rose for the first time since March 2023 to 3.3%, still above the Fed’s goal for a 2% annual rate.

Meanwhile, the Department of Labor said 258,000 people filed for unemployment for the first time last week, up from 225,000 the week prior. This was well over the 230,000 jobless claims forecasters had expected, according to a survey of economists by Dow Jones Newswire and The Wall Street Journal.

Stubborn inflation and rising joblessness are the exact opposite of what the Fed wants as it attempts to bring the economy down from the feverish outburst of inflation that followed the pandemic in 2021.

In September, the Fed began trimming its benchmark interest rate, which influences borrowing costs on everything from credit cards to mortgages. At that time, officials said they expected to make further cuts in the coming months. Central bankers projected they’d make a quarter-percentage-point cut at each of the two remaining meetings.

But will Fed officials rethink their rate-cut plans with inflation running hotter than expected? Several economists think not.

Read the full article here.

–Diccon Hyatt

CrowdStrike Jumps as Analyst Calls Stock Top Investment Idea

October 10, 2024 05:14 PM EDT

Shares of cybersecurity provider CrowdStrike Holdings (CRWD) added more than 5% on Thursday, notching the S&P 500’s top performance of the day, after RBC Capital named the company one of its top investment ideas in North American software for 2025.

CrowdStrike drew scrutiny in mid-July when the firm’s defective software update caused widespread technology outages across the world. Fallout from that incident sent CrowdStrike shares tumbling, and it’s still below the levels seen after those events—but the stock has been on a path of recovery since printing a low in early August.

According to analysts at RBC, the negative headlines about the mid-summer software update and subsequent technological interruptions generated “short-term noise” surrounding CrowdStrike stock, but the company appears poised to emerge from the situation in a strong position.

CrowdStrike continues to face issues stemming from the July incident. When Delta Air Lines (DAL) reported lower-than-expected sales and profits in its quarterly report released Thursday, the carrier cited the negative impact of the CrowdStrike outage, which resulted in the cancellation of thousands of flights.

According to Delta, the incident caused a $380 million hit to revenue in the quarter. The airline’s CEO said Delta continues to seek compensation from CrowdStrike and Microsoft (MSFT) related to the outages.

–Michael Bromberg

Wall Street’s Low Earnings Expectations Be Good for Investors

October 10, 2024 04:38 PM EDT

Wall Street analysts have lowered their forecasts for third-quarter earnings by more than normal in recent months as economic data has shown signs of a slowing U.S. economy.

Lower expectations could be a good thing for stocks, say Bank of America analysts, who expect corporate earnings to top estimates.

“As long as companies have managed through macro headwinds and see early signs of improvement from lower rates, stocks should get rewarded,” wrote BofA analysts. They estimate that Wall Street has overestimated the impact disappointing macroeconomic data will have on corporate earnings, and expect S&P 500 earnings to top estimates by about 2 percentage points. 

Experts note that interest rate cuts and increased capital expenditures could underpin a rosier-than-feared outlook.

Read the full article here.

–Colin Laidley

Boeing Price Levels to Watch as Stock Hits Two Year Low

October 10, 2024 03:18 PM EDT

Shares in Boeing (BA) continued falling Thursday, after the airplane maker earlier this week withdrew its contract offer to striking machinists, prompting rating agency S&P Global to issue a downgrade warning on the company’s debt.

The stock has spent most of this year descending within a falling wedge, a chart pattern consisting of downward sloping converging trendlines that indicates a potential bullish trend reversal.

Investors should watch key overhead levels on Boeing’s chart around $192, $234, $268, and $320, while also keeping an eye on an important support level near $121.

The stock was down 1.6% at around $147 late Thursday, trading at its lowest levels since October 2022, in late trading Thursday.

Read the full technical analysis piece here.

–Timothy Smith

First Solar Sinks After Price Target Cut by Jefferies

October 10, 2024 02:21 PM EDT

First Solar (FSLR) was the worst performer in the S&P 500 intraday Thursday after securities analysts at Jefferies lowered their price target on concerns that delays will negatively affect its current-quarter results. 

Jefferies dropped its price outlook for First Solar to $266 from $271, while maintaining a “buy” rating. First Solar was down 9% at around $205 in recent trading.

In a note to clients, the analysts said they expect First Solar earnings to slightly miss estimates as product volumes come in lower than anticipated. They pointed to “potential delays for myriad reasons, impact on module pricing from AD/CVD [anti-dumping and countervailing duties] determinations and thoughts on selling excess Indian capacity into US.”

The analysts noted that utility-scale solar-power growth “continues to be challenged by delays due to long interconnection queues, supply-chain, and labor shortages.” They added that this trend will continue into next year “with some level of project push outs as delays extend from weeks to months.”

The Jefferies report also sent shares of other solar companies, such as Enphase Energy (ENPH) and SolarEdge Technologies (SEDG), lower Thursday.

–Bill McColl

Trump Media Shares Jump to Highest Levels Since August

October 10, 2024 02:00 PM EDT

Shares of Truth Social’s parent company jumped Thursday, rising as the company announced some product news that helped the stock touch its highest level in months.

Trump Media and Technology Group (DJT) stock recently was up more than 16% to around $24. The move comes as the shares have risen off lows below $12 per share touched last month. 

Today’s move likely was spurred in part by the company’s announcement that a new app for watching its streaming video offering is now available in Google’s Play Store.

But the stock generally has risen in recent weeks, moving off lows driven by investor questions about whether the expiration of lock-up agreements governing some investors’ trades would be followed by widespread selling by former President Donald Trump, its majority owner, or other big investors. That, for the most part, hasn’t happened.

That extended a run of volatility that has lasted nearly as long as the stock, which hit the public markets earlier this year via a merger with a blank-check company, has been publicly traded. The shares—which trade in part on investors’ read on whether Trump might be re-elected—are still well off 2024 highs near $80, though now back at levels last seen in August. 

–David Maricon-Nachison

Tesla Down Ahead of Eagerly Awaited Robotaxi Event

October 10, 2024 11:42 AM EDT

Tesla (TSLA) is expected to unveil its autonomous “robotaxi” Thursday evening, after the event was delayed from its original date in August.

Analysts expect to see the vehicle, and hear details on Tesla’s plans on its production, rollout, and operational costs.

They also said that Tesla could show off its rumored new lower-cost model, which is expected to start production next year, and other products.

Tesla shares were down about 1% in recent trading.

Read the full preview here.

Delta Falls as Results and Outlook Disappoint

October 10, 2024 10:18 AM EDT

Shares of Delta Air Lines (DAL) declined in early trading Thursday after the carrier’s third-quarter results and fourth-quarter sales outlook came in below analysts’ estimates.

Delta posted third-quarter adjusted earnings per share of $1.50 on revenue of $15.68 billion, and projected fourth-quarter revenue growth of between 2% and 4%.

The carrier also confirmed costs of around $500 million following the CrowdStrike-caused global IT outage in July that resulted in 7,000 Delta flight cancellations over a five-day period.

Delta shares were down 1% in recent trading. The stock has gained 25% so far in 2024, slightly outpacing the S&P 500 over the period.

–Aaron McDade

Oracle Price Levels to Watch as Stock Trades at Record High

October 10, 2024 08:59 AM EDT

Oracle shares are trading at record high levels on growing investor enthusiasm for the company’s reach into the artificial intelligence market.

The stock was down 0.1% at $177.78 in recent premarket trading, after gaining 2.3% yesterday.

The stock traded in a three-year rising wedge before staging a decisive volume-backed breakout above the pattern last month, though the RSI indicator warns of overbought conditions.

Investors should monitor important lower levels on Oracle’s chart around $146, $127, and $100, while also watching a bars pattern bullish price target around $250.

Read the full technical analysis piece here.

–Timothy Smith

Major index Stock Futures Lower Ahead of Inflation Data

October 10, 2024 08:08 AM EDT

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

S&P 500 futures were also down 0.1%.

Nasdaq 100 futures were down 0.2%.