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Dow rises more than 100 points to close at a record: Live updates

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Mon, Feb 12 20244:07 PM EST

Dow cinches a new record high close

The Dow Jones Industrial Average closed at a new record high on Monday afternoon.

The 30-stock index added 125.69 points, or 0.33%, to settle at 38,797.38. On the other hand, the S&P 500 edged 0.09% down to close at 5,021.84, while the Nasdaq Composite slid 0.3% to end at 15,942.55.

— Lisa Kailai Han

Mon, Feb 12 20243:52 PM EST

Wage growth is not a worry for inflation, JPMorgan's David Kelly says

January's jobs report showed hourly earnings rising 4.5% year over year, but that doesn't mean a new bout of inflation is around the corner, according to JPMorgan Asset Management chief global strategist David Kelly.

The strategist said at the Exchange ETF conference on Monday that, if anything, American workers aren't pushing hard enough for raises, which is helping inflation fall.

"If you want to understand why we're having inflation come down at such a full employment economy, this is why: Because the American workers aren't asking for a raise. Not really, not in the way that they could," Kelly said.

He pointed to low union membership as a reason why workers are hesitating to push for big raises even with unemployment below 4%.

Kelly also said that rising productivity means that wages can grow more than inflation without causing another spike in prices.

"Wages should go up by the sum of consumer inflation plus productivity. Right now productivity growth is strong, and that means there's nothing wrong with 4% wage [growth]," Kelly said.

— Jesse Pound

Mon, Feb 12 20243:40 PM EST

Evercore ISI says to stick to a defensive portfolio in the current macro environment

Investors would be wise to remain invested in defensive names, according to Evercore ISI.

"In an environment where investor FOMO has begun to build and 1 year forward returns from 'Extreme but not yet Irrational' valuations historically project 0% upside EVR ISI Strategy prefers remaining invested but with a decided tilt toward defense," wrote analyst Julian Emanuel.

Emanuel believes that headwinds to a "Goldilocks" economic scenario could also present additional headwinds for the market and possibly skew risks to the downside. Volatility is also likely to rise, given this year's presidential election, he added.

"A defensive portfolio means overweight communication services, consumer staples and health care — sectors that tend to outperform between the Fed's last hike and first cut, and underweight economically sensitive consumer discretionary, industrials and materials, all sectors handily underperforming the S&P 500 YTD despite there being few if any 'on the ground signs' of recession being imminent," he said.

— Lisa Kailai Han

Mon, Feb 12 20243:25 PM EST

Bitcoin touches $50,000 for the first time in more than two years

Bitcoin jumped above $50,000 Monday, at one point reaching its highest level in more than two years.

The price of the flagship cryptocurrency was last higher by 3.5% at $49,875.00, according to Coin Metrics. Earlier, it rose to $50,334.00, its highest level since December 2021. Ether was higher by more than 4% at $2,624.45, after rising to $2,638.62 for the first time since Jan. 12.

Monday's climb pulled crypto equities higher. Crypto exchange Coinbase gained more than 3% while bitcoin proxy MicroStrategy advanced nearly 10%. Several mining stocks were up double digits. CleanSpark rose about 14% and Iris Energy surged 15%. Marathon Digital gained 13%.

— Tanaya Macheel

Mon, Feb 12 20243:10 PM EST

Crude oil prices little changed after rallying last week on Middle East tensions

Oil prices were little change Monday after rallying last week on tensions in the Middle East.

The West Texas Intermediate contract for March gained 8 cents to settle at $76.92 a barrel. The Brent contract for April settled at $82 a barrel, down 19 cents.

U.S. crude and the global benchmark rallied more than 6% last week after Israel rejected Hamas' conditions for a ceasefire and vowed to press with its offensive to the southern Gaza city of Rafah.

— Spencer Kimball

Mon, Feb 12 20242:57 PM EST

S&P 500 is a better pick than Russell 2000: Renaissance Macro Research chairman

The S&P 500 is the stronger choice compared with the Russell 2000, according to Jeff DeGraaf, Renaissance Macro Research chairman.

DeGraaf said the benchmark S&P 500 has momentum on its side in an interview with CNBC's "Squawk on the Street" on Monday. Meanwhile, he said the small cap-focused Russell 2000 has struggled to break out.

"I don't think the Russell's bad, it's just relatively underperforming," he said, before calling the S&P 500 a "superstar."

DeGraaf noted the mix is different between the two, creating difference in performance. While the S&P 500 has rallied more than 5% this year, the Russell 2000 has added less than 1%.

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The S&P 500 vs. Russell 2000, year to date

Elsewhere, he said regional bank stocks have been "oversold," while noting that a breakout may have been a "bull trap."

— Alex Harring

Mon, Feb 12 20242:39 PM EST

Small-caps outperform

Small-cap stocks saw outsized gains on Monday, continuing to rebound after a lackluster performance earlier in the new year.

The small cap-focused Russell 2000 climbed nearly 2% in Monday's early afternoon session. By comparison, the broad S&P 500 rose just 0.4%.

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The Russell 2000 vs, the S&P 500, 1-day

Monday's gains add to a recent rally, with the index up more than 5% in February.

That recent advance also marks a turnaround after a weak start to the year. The Russell 2000 is just around 1% higher in 2024, while the S&P 500 has added nearly 6%.

— Alex Harring

Mon, Feb 12 20242:22 PM EST

S&P 500 rally remains narrow, says market strategist

Although the S&P 500 managed to close above the 5,000 level on Friday for the first time ever, market participation remains relatively narrow, according to Canaccord Genuity.

"Despite the new record high in the SPX, less than 10% of the stocks in the index hit a new 52-week high on Friday," chief market strategist Tony Dwyer wrote in a Monday note.

This is despite the fact that the equal-weight broad market index also reached a new all-time high level on Friday. The small-cap focused Russell 2000 also rose 2.4% to notch its best week this year, but is still 17% below its record high, Dwyer added.

— Hakyung Kim

Mon, Feb 12 20242:05 PM EST

Market in a 'melt-up' period, says Wolfe Research

Although some shorter-term trading signals are indicating that the market is in overbought territory, upside momentum still looks strong, according to Wolfe Research.

The U.S. equity market is in a "full-on 'melt up' mode," according to chief investment strategist Chris Senyek.

Since the market's most recent bottom on Oct. 27, the S&P 500, Nasdaq 100 and Russell 2000 are all up more than 20%, according to the firm.

"In our view, the equity market 'melt up' is largely being driven by investors' 'heads I

win, tails you lose' outlook," Senyek wrote in a Monday note.

"Put differently, we believe the consensus view is that either (1) the economic outlook continues to improve, or (2) the Fed cuts even deeper than already aggressive expectations priced into the market."

Potential disappointments ahead include volatile oil prices and more struggles in the regional bank sector, per Senyek.

— Hakyung Kim

Mon, Feb 12 20241:52 PM EST

Nasdaq Composite nears all-time intraday high

The Nasdaq Composite rose 0.3% on Monday morning to trade at 16.036.58, putting it within reach of its intraday all-time high of 16,212.23 hit on November 22, 2021. However, the tech-heavy index retraced its gains by mid-afternoon to edge fractionally lower.

The Nasdaq hit a closing record 16,057.44 on Nov. 19, 2021.

The tech-heavy index has jumped 7% since the start the year and 6% in February.

— Samantha Subin

Mon, Feb 12 20241:50 PM EST

Fidelity announces name changes, fee cuts for three ETFs

Investment giant Fidelity is cutting the fees and changing the names for some of its active ETFs, the firm announced Monday.

These three funds have about $500 million in combined assets, according to FactSet, and the changes will take effect on Feb. 26.

In addition to those changes, Fidelity announced the launch of two new ETFs, a Large Cap Value ETF (FFLV) and a Low Duration Bond ETF (FLDB).

— Jesse Pound

Mon, Feb 12 20241:26 PM EST

Arm Holdings soars as much as 42% Monday, two days after jumping 48%

British software and semiconductor designer Arm Holdings Plc soared as much 42% on Monday, two trading days after jumping 48% in reaction to earnings reported post-market Feb. 7. Arm has almost doubled in February in the wake of fiscal third quarter sales and net income, and forward financial guidance, that all exceeded analysts' highest estimates.

The issue for institutions and Main Street investors alike is the limited number of shares available for trading in Arm, which went public last September in a highly-anticipated offering at $51 a share. The stock priced at the top end of an expected range of $47-$51, and then closed 25% higher on its first day of trading.

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Arm Holdings Plc shares in the U.S. over the past month.

Roughly 95.5 million shares were sold in the IPO five months ago, out of a total outstanding of some 1.03 billion. Of those 95.5 million, about 9.3 million were recently reported to have been sold short, down from 10.7 million shares the month before.

Japanese tech investor and telecom provider Softbank Corp., itself up 10% in over the counter trading Monday in the U.S., continues to own about 90% of Arm. According to FactSet, institutional investors combined only own 7.2% of Arm shares that are currently available for trading.

— Scott Schnipper

Mon, Feb 12 20241:18 PM EST

See the stocks making big moves midday

These are some of the stocks posting notable moves in Monday's session:

See the full list here.

— Alex Harring

Mon, Feb 12 202412:34 PM EST

Oppenheimer remains bullish on the equity market

An economy with "overall resilience" is giving Oppenheimer's John Stoltzfus continued optimism on the equity market.

"We remain positive on stocks, view bonds as complimentary to stocks for prudent diversification and look for a further broadening of the equity rally which emerged from the lows of late October last year," he wrote in a Monday note.

The chief investment strategist of Oppenheimer currently forecasts the S&P 500 ending the year at around 5,200, or 3.4% above the index's record Friday closing level of 5,026.61.

Stoltzfus added that within equities, he favors cyclical names over defensive. "Established technology companies whose products and services are deeply embedded in the lives of business and consumers are likely to prove to be key holdings," he added.

Other attractive opportunities include the industrials, energy, materials, consumer discretionary and financials sectors.

— Lisa Kailai Han

Mon, Feb 12 202412:30 PM EST

Super Micro Computer continues rallying

Shares of Super Micro Computer have continued surging, adding to last year's monster gains.

The stock has already more than doubled its share value in the new year, climbing nearly 179% in 2024. That builds on 2023's jump of more than 246%.

It has climbed significantly in value every year since 2019, creating huge long-term gains. Said another way: The stock was worth $24.02 per share at the end of 2019. On Monday, shares traded around the $790 mark.

Super Micro Computer is part of the group of stocks that have soared amid investor excitement around artificial intelligence. Late last month, the California-based company announced better-than-anticipated earnings for the second fiscal quarter and offered expectation-smashing guidance for the current quarter and full year.

Shares were up more than 6% in Monday's session alone.

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Super Micro Computer, 1-year

— Alex Harring

Mon, Feb 12 202412:01 PM EST

Small-caps and non-tech sectors need to put in more work to catch up, strategist says

Traders reigning in their expectations for "aggressive" rate cuts this year has dampened the prospects of a broadening rally, according to Thomas Hainlin, senior investment strategist at U.S. Bank Asset Management.

"You've already had a recalibration there, that's why it's been hard for small-caps and mid-caps and non-tech growth sectors to continue to catch up. Now it's really just more fundamentally driven," he told CNBC in an interview. "We need to see some of those fundamentals come through with those smaller companies or those non-tech sectors to see that rally broaden out and get more durable."

Due to this, any broader market rally is likely to be more evidence-based and less based on speculation around the Fed's potential rate-cut schedule in 2024, Hainlin added.

— Lisa Kailai Han

Mon, Feb 12 202411:33 AM EST

Today's only the 8th trading day of February and Nvidia is already up 20% this month

Monday marks only the eighth trading day of February and with Nvidia's intraday gain of 2.2% the dominant maker of artificial intelligence processors is already ahead 19.8% this month.

Facebook and Instagram parent Meta Platforms rose as much as 2.05% intraday Monday, pushing its month-to-date advance to 22.2%.

Nvidia is now close to overtaking Amazon as the fourth largest stock in the so-called group of Magnificent 7 technology leaders, measured by total market capitalization (share price multiplied by shares outstanding), according to FactSet data:

— Scott Schnipper

Mon, Feb 12 202411:11 AM EST

Nvidia tops Amazon in market value

Nvidia rallied more than 2% on Monday to hit a market capitalization of nearly $1.83 trillion and overtook Amazon in market value.

Amazon's stock was last down about 0.4%, putting the e-commerce giant at a roughly $1.81 trillion market cap.

Nvidia was last more valuable than Amazon in 2002, when both companies traded under a $6 billion market cap.

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Nvidia tops Amazon in market value

— Samantha Subin

Mon, Feb 12 202410:53 AM EST

Barclays is positive value and large-cap names for U.S. equities

Value and large-cap stocks look most attractive right now in the U.S., according to Barclays.

Given their high real rate exposure, the bank is also positive on value stocks in Europe.

"Value factor basket returns were weak across both regions last month but we maintain our positive view on the factor given its cheap valuation and high exposure to real rates. Our expectation for continuing improvement in the economic data can further help value style," Barclays wrote.

While the bank is positive on large-cap names over small-caps in the U.S., the reverse is true for Europe.

"High rates do not bode well for highly levered small caps in the US; also, large caps are more closely associated with quality exposure, which we view positively in the US at the moment," the bank added. "In contrast, we are more positive on small caps within European markets given their multi-decade low valuation, and improving PMIs."

— Lisa Kailai Han

Mon, Feb 12 202410:23 AM EST

S&P 500 notches 70 trading days without pullback of at least 2%

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The S&P 500, 1-year

— Alex Harring

Mon, Feb 12 20249:57 AM EST

New York Community Bancorp execs have strategy to turn things around, says Bank of America

New York Community Bancorp may be struggling, but its leadership "has the playbook to turn things around," analyst Ebrahim H. Poonawala wrote in a note Monday.

On Wednesday, Alessandro DiNello was promoted executive chairman effective immediately to help the regional bank improve operations after several financial hits, including a surprise fourth-quarter loss and large charge against expected loan losses.

"Mr. DiNello appears firmly in control of the go forward strategy and we consider him as a credible executive with a proven track record of turning around a troubled bank and working with banking regulators," said Poonawala, who met with the senior management team on Friday. He has a neutral rating on the stock.

Management believes the loan loss reserve reflects the credit risk in the commercial real estate (CRE) market, although price discovery in the office CRE market could lead to additional reserves, he said. Meanwhile, exposure to multi-family CRE loans should decline over time, he added.

Executives also said its deposit franchise is relationship driven and diversified, which lead to relative stability in depositor behavior despite the recent headline risk, Poonawala noted.

Shares were up 12% in trading Monday morning.

— Michelle Fox

Mon, Feb 12 20249:32 AM EST

Stocks open little changed on Monday morning

Mon, Feb 12 20249:00 AM EST

Japan remains overweight, UK looks 'record cheap' within Europe, says JPMorgan

Japan as a region remains overweight for JPMorgan, strategist Mislav Mateka wrote in a Monday morning note.

"Even though it feels that Japan is a consensus overweight, we think that flows are still at an early stage and can support further outperformance of the region," he said.

As additional catalysts, the analyst pointed to Japan's economic reflation, alongside current measures the Tokyo Stock Exchange is undertaking to improve shareholder returns and corporate profitability. Mateka added that the firm's "preferred ways to position for Japan upside are through value stocks and high dividend stocks."

Mateka also highlighted the UK as a "record cheap" market within Europe.

"UK is a typical low beta play, and last year equity indices were strongly up. If equity market becomes more volatile, with challenge to the Goldilocks narrative, UK could see a tailwind." he wrote, adding that the market also looks attractive due to its high dividend yield.

— Lisa Kailai Han

Mon, Feb 12 20248:32 AM EST

Stocks making the biggest moves premarket

Hershey — The chocolate maker fell 1% after Morgan Stanley downgraded shares to underweight from equal weight. The bank cited weak consumer demand and high cocoa inflation weighing upon margins. 

Rocket Lab — The stock rose around 1% after Citi reinstated coverage with a buy rating. Rocket Lab's liquidity conditions have improved, according to Citi. A recent $515 million award by the Space Development Agency also suggests rising traction with the U.S. government, analyst Jason Gursky said. 

Teva Pharmaceutical Industries — Shares jumped 3% following an upgrade by Piper Sandler to overweight from neutral. Teva's brand portfolio and improving capital structure makes it well-positioned for multiple recovery and expansion, per Piper Sandler. 

The full list can be found here.

— Hakyung Kim

Mon, Feb 12 20248:03 AM EST

No evidence to support theory that Fed adjusts policy before presidential elections, Barclays says

There's no evidence to support the theory that the Federal Reserve adjusts its monetary policy in the lead-up to a U.S. presidential election, according to Barclays.

In a recent note, Barclays analyst Jonathan Millar addressed the notion that the Fed avoids adjusting its policy settings before an election to avoid an accusation of manipulating or supporting a particular outcome. But data offers no evidence to support this theory.

"We find no compelling statistical evidence that Federal Reserve policy is conducted differently during Presidential elections. This supports the Fed's claims that it is impartial," Millar wrote. "That said, comparisons of our estimates across periods hint that the Fed has become more determined in recent decades to maintain its policy independence, likely taking lessons from episodes in the 1970s, when this was more in question."

— Lisa Kailai Han

Mon, Feb 12 20247:34 AM EST

U.S. equity rally is optimistic but 'well-supported,' UBS says

All three major stock indexes have been on a tear so far in 2024, with the S&P 500 closing above the key 5,000 level last Friday afternoon for the first time ever.

"While U.S. stocks are now pricing in plenty of good news, we believe the rally has been well-supported," wrote Mark Haefele, chief investment officer of UBS Global Wealth Management.

Haefele's base case sees the S&P 500 ending the year at its current levels. But in an ideal "Goldilocks" economic outcome with strong economic growth and low inflation, Haefele believes the 500-stock index could end the year around 5,300.

"This would be a particularly positive outcome for small-cap stocks, which typically benefit more from Fed easing given their greater reliance on floating-rate debt," he added.

— Lisa Kailai Han, Sarah Min

Mon, Feb 12 20246:18 AM EST

Diamondback Energy to merge with Endeavor Energy

Diamondback Energy announced Monday it agreed to merge with Endeavor Energy in a deal valued at about $26 billion, including debt.

The transaction is expected to close in the fourth quarter of 2024.

"The combined company's inventory will have industry-leading depth and quality that will be converted into cash flow with the industry's lowest cost structure, creating a differentiated value proposition for our stockholders," Diamondback CEO Travis Stice said in a statement.

Diamondback shares were down slightly in the premarket.

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FANG slips

— Fred Imbert

Mon, Feb 12 20243:23 AM EST

Europe stocks open higher

European stocks opened Monday higher, though sector and stock gains were cautious.

France's CAC 40 index gained 0.4%, while Germany's DAX was up 0.3% and the U.K.'s FTSE 100 was flat.

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Stoxx 600 index.

— Jenni Reid

Mon, Feb 12 20241:18 AM EST

India's Paytm confirms banking arm director resigned

Sun, Feb 11 202411:38 PM EST

Kiwi dollar dips following Reserve Bank of New Zealand governor comments

The New Zealand dollar dipped 0.3% to $0.6130, cooling from a roughly 1.4% jump last week.

Reserve Bank of New Zealand Governor Adrian Orr said the country's current inflation rate was still too high at 4.7%. Speaking before a parliamentary committee, Orr said the central bank aims to bring inflation down to around 2%.

The kiwi dollar has been buoyed by bets that RBNZ could hike its interest rates again in order to rein in inflation.

LSEG data showed markets were pricing in a 71% chance of a hold when the central bank meets on Feb. 28 and a 52% chance of a hike at its May meeting.

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— Shreyashi Sanyal

Sun, Feb 11 20247:56 PM EST

Australian biotech CSL slides after cardiovascular drug fails trial

Shares of CSL fell 5% after the Australian biotechnology company said its cardiovascular drug CSL112 failed to meet the primary efficacy endpoint in a phase 3 trial.

CSL said the drug did not reduce the risk of major adverse cardiovascular events at 90 days, compared with placebo. As a result, the company said it has "no plans for a near-term regulatory filing."

CSL shares were the biggest loser on Australia's benchmark S&P/ASX 200 index, and fell to their lowest level in almost one month.

— Shreyashi Sanyal

Sun, Feb 11 20246:54 PM EST

The S&P 500 could end the year at 5,500, says InfraCap's Jay Hatfield

The S&P 500 notched a record high this week, closing above the key 5,000 mark on Friday afternoon. But Infrastructure Capital Advisors' Jay Hatfield believes that the index still has room to go in 2024.

Hatfield's year-end target for the broader index is 5,500, corresponding to a potential 9% rise. In the near term, however, he believes that the market will remain largely stagnant while investors wait for the Federal Reserve to begin cutting rates.

"I don't think we're just going to infinitely and quickly go to 5,500," he told CNBC. "Our guess is that we stall out somewhere around 5,000 or 5,100 until we have greater clarity on both a Fed and ECB rate cut most likely in June, but possibly in May," he told CNBC.

— Lisa Kailai Han

Sun, Feb 11 20246:24 PM EST

Week in review

Here are the market stats from last week:

— Lisa Kailai Han, Christopher Hayes

Sun, Feb 11 20246:08 PM EST

Stock futures open little changed

Stock futures hovered near the flatline on Sunday night, with the three major futures contracts all trading within 0.1% of their previous close.

— Lisa Kailai Han

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