Markets News, September 5, 2024: S&P 500 Falls for 3rd Straight Day as Investors Await Critical Jobs Report

Biggest S&P 500 Movers on Thursday

Decliners

• McKesson (MCK) shares plunged 9.9%, the biggest loss of any S&P 500 stock, after the pharmaceutical and medical supply distributor issued lower-than-expected profit guidance for the second quarter. The firm also agreed to sell its Canada-based businesses Rexall and Well.ca to Birch Hill Equity Partners. McKesson explained the move will allow it to prioritize investments in oncology and biopharma services.
• Shares of Zimmer Biomet Holdings (ZBH), a medical technology company specializing in artificial joint replacements and other orthopedic products, fell 8.7% on Thursday. In a presentation at a health care conference, Zimmer executives warned the company's implementation of a new enterprise resource planning (ERP) system could weigh on its performance in the second half of 2024. The software transition has reportedly affected production and shipping processes.
• Copart (CPRT), which operates an online car auction platform, reported mixed results for its fiscal fourth quarter of 2024, and its shares dropped 6.7%. Although revenue ticked higher year over year and slightly edged out estimates, net income was down from a year ago and missed forecasts. Operating expenses—including increased general, administrative and yard operations costs—weighed on profitability in the quarter.

Advancers

• Dollar Tree (DLTR) shares jumped 7.7%, notching the top daily performance in the S&P 500. Thursday's gain marked a partial recovery from the 22% dive posted by the stock in the previous session. The discount retailer missed earnings estimates and lowered its full-year guidance, citing strong macroeconomic headwinds.
  

• Shares of Marketaxess Holdings (MKTX), which operates an electronic trading platform for fixed-income investments, gained 6.7%. The financial technology firm reported strong growth in trading volume for August, led by gains in U.S. high-grade credit and municipal bonds.
• Tesla (TSLA) shares were up 4.9% Thursday. The electric vehicle (EV) maker said it plans to launch its full self-driving (FSD) technology in Europe and China in the first quarter of 2025, pending regulatory approval. In addition, comments from CEO Elon Musk attracted attention to Tesla's robotics unit.

-Michael Bromberg

Broadcom Falls in Extended Trading After Earnings Report

Broadcom (AVGO) shares in tumbled in late trading after the company reported quarterly results that swung to a loss due to increased merger-related expenses and issued guidance that came in below expectations.

The chipmaker posted a net loss of $1.875 billion, compared to a profit of $3.3 billion in the year-ago quarter. Adjusting for $1.5 billion in amortization of acquisition-related intangible assets and other restructuring costs, Broadcom’s earnings were $1.24 per share.

The company projected fiscal fourth-quarter revenue of $14 billion, which fell slightly short of the analyst consensus. CEO Hock Tan said the company expected full-year AI revenue to be $12 billion, "driven by ethernet networking and custom accelerators for AI data centers."

Broadcom acquired software firm VMware in November 2023. "Broadcom's third quarter results reflect continued strength in our [artificial intelligence] semiconductor solutions and VMware," said Tan.

The stock was down 6.7% at $142.65 in recent after-hours trading.

-Andrew Kessel

Tesla Levels to Watch as Stock Continues to Rally

In what's been a tough week for the broader market, Tesla shares have rallied. For the second consecutive day, Tesla is a top S&P 500 gainer, up more than 4% in late trading.

Although Tesla shares have gained more than 25% over the past three months, they have remained in a holding pattern since late July as investors wait for further updates about the company’s vehicle deliveries, its eagerly-anticipated robotaxi event, and third-quarter earnings, all of which are expected next month.

The stock has traded within a symmetrical triangle, indicating a pause in price action before potentially making another trending move.

Investors should watch key breakout levels at $265 and $300, while monitoring important breakdown levels at $185 and $152.

Read our full technical analysis piece here.

-Timothy Smith

Zimmer Biomet Plunges as Medtech Company Issues Warning

Shares of Zimmer Biomet Holdings (ZBH) tumbled after the manufacturer of artificial joint replacements and other orthopedic products warned the implementation of a new enterprise resources planning system would hit sales and profits in 2024.

In a presentation Thursday at the Wells Fargo 2024 Healthcare Conference, Zimmer executives said the company switched from a legacy ERP platform to one from SAP, a transition that has run into complications. Zimmer's management team expects the issue to cause a 1% drag on revenue this year, with the headwinds mostly abating by the end of the fourth quarter.

Analysts at Stifel predicted a potential 210-basis-point impact on third-quarter sales from the ERP transition, exacerbating what is already a difficult market environment. Meanwhile, Evercore ISI analysts said the issue could reduce earnings per share by 15 cents.

Zimmer Biomet shares were down nearly 9% in recent trading, near their lowest levels since last November, and were among the big decliners in the S&P 500.

-Michael Bromberg

JetBlue Stock Soars on Raised Revenue Guidance

JetBlue Airways (JBLU) shares rallied Thursday after the company raised its third-quarter revenue guidance.

The airline in a regulatory filing said revenue could grow as much as 1% year-over-year thanks to improved operational performance this summer and increased bookings. It also noted an uptick in revenue due to customers needing to book new flights following the global CrowdStrike (CRWD) outage in July. 

The company increased its revenue projection to between a 2.5% decline and a 1% gain, up from a previous projection for a decline of 1.5% to 5.5%.

JetBlue shares were up more than 7% in recent trading and are back to near unchanged for the year.

-Andrew Kessel

Analysts Broadly Bullish on Broadcom Ahead of Earnings

Broadcom’s (AVGO) latest financial results, due after the closing bell, are set to land with the stock up nearly 40% this year—and Wall Street analysts broadly bullish on the shares. 

According to data as of this morning, 12 of the 13 analysts covering Broadcom tracked by Visible Alpha have "buy" or equivalent ratings on the stock. 

Their consensus price target of $192.96 represents a 25% premium to Wednesday's close of $154.12. Analysts' price targets range from $173.50 to $210, according to Visible Alpha. 

The stock was down 0.1% at $153.95 in recent trading.

Broadcom earlier this year split its shares 10-for-1. Here’s what you need to know about the chipmaker's upcoming fiscal third-quarter earnings report. 

-David Marino-Nachison

US Steel Shares Volatile Amid Takeover Uncertainty

President Joe Biden intends to block the proposed $14 billion acquisition of U.S. Steel (X) by Japanese firm Nippon Steel, according to a Washington Post report, causing volatility in shares of the iconic American company.

The Committee on Foreign Investment in the United States (CFIUS) has been investigating the deal for possible national security risks, the report said, but its recommendation has not been made public. Biden is required by law to receive the committee's recommendation before formally blocking the deal.  

Shares of U.S. Steel fell 17% Wednesday following the report and have recovered a fraction of that ground intraday Thursday. Year-to-date, the stock is down about 40%. 

C3.ai Shares Slide on Weak Outlook

C3.ai (AI) shares sank to their lowest level in more than a year Thursday after the artificial intelligence (AI) software maker projected a larger loss than expected for the current quarter.

The company released fiscal 2025 first-quarter results after the bell Wednesday, with revenue less than $1 million above estimates compiled by Visible Alpha at $87.2 million, and a smaller net loss than expected at $62.8 million.

For the current quarter, C3 projects revenue within a range of $88.6 million to $93.6 million, compared to the analyst consensus of $91 million. The company projects an adjusted net loss of $26.7 million to $34.7 million for the quarter, compared with the $20.3 million loss analysts currently project.

C3 shares were down 12% recently, trading at their lowest levels since May of 2023.

-Aaron McDade

Shares of Chinese EV Maker Nio Rise as Vehicle Deliveries Jump

U.S.-traded shares of Nio (NIO) advanced in early trading Thursday as the Chinese electric vehicle maker boosted its outlook following record deliveries.

Nio posted a second-quarter loss of 5.05 billion yuan ($694.4 million), 16.7% smaller than a year ago. Revenue soared 99% to 17.45 billion yuan, which was in line with analysts' expectations

Vehicle deliveries jumped 144% to 57,373 units in the second quarter, and the company expects a number of between 61,000 and 63,000 in the current quarter. In addition, Nio sees revenue in a range of 19.11 billion yuan and 19.67 billion yuan, better than analysts' estimates. 

American Depositary Receipts in Nio were up 6% in recent trading.

-Bill McColl

Stock Futures Point to Lower Open for Major Indexes

Futures tied to the Dow Jones Industrial Average were down fractionally.

S&P 500 futures were down 0.1%.

Nasdaq 100 futures were down about 0.3%.