Market News
Stocks are showing a slight rise on Wednesday morning as the markets continue their recent gains and surpass record levels.
Dow Jones Today: Stocks Move Cautiously as Market Gains Persist
The Nasdaq index traded 0.3% higher on Wednesday, while the S&P 500 rose by 0.1%. The Dow Jones Industrial Average remained stable.
Stocks have strengthened since late November when the Federal Reserve left interest rates unchanged for the second consecutive time, signaling policymakers’ hesitance to tighten monetary policy and bolstering bets that interest rates may have peaked. The Dow Jones has risen by nearly 16% since then, recording five consecutive record closes last week. The Nasdaq 100 jumped by nearly 20% and closed at a record level in the last three sessions. Meanwhile, the S&P 500 is within 1% of the record level.
Stocks comfortably closed in the green yesterday despite some cautious remarks from the two Federal Reserve officials who will vote on upcoming policy next year.
Google Rises to 52-Week High After Report on Advertising Business Restructuring
Shares of Google’s parent company Alphabet (GOOGL) rose more than 3% to trade at a one-year high on Wednesday following reports of an upcoming restructuring in its core advertising business.
Information reported on Tuesday stated that Sean Downey, who leads Google’s advertising business in North and South America, told an internal department meeting that the company’s advertising sales unit, comprising 30,000 people, would be reorganized, according to informed sources. It was not specified whether the restructuring would involve layoffs.
This consolidation comes as Alphabet is leveraging artificial intelligence to create and place ads on Google, YouTube, and its other platforms. Alphabet generated $54.5 billion in revenue – or 80% of total revenue – from advertising sales in the third quarter.
Productive artificial intelligence can be much cheaper than traditional methods for both ad creators and sellers. In May, the world’s largest advertising company, WPP, struck a deal with Nvidia to create an AI-based content development engine. Mark Read, CEO of WPP, told Reuters: “Savings could reach 10 to 20 times.”
Three Major Analyst Calls Today
Shares of Discover Financial (DFS) rose over 1% after Citigroup upgraded the stock from “Hold” to “Buy.” Analysts pointed to several factors that could boost the stock next year, including a resumption of share buybacks, selling a student loan portfolio, and the potential for credit loss stagnation next year.
Shares of Lowe’s (LOW) were downgraded from “Buy” to “Hold” by Stifel analysts, noting a continued decline in home improvement business. Lowe’s warned of tough times in its quarterly earnings report last month when it missed sales estimates and lowered its full-year earnings and sales forecasts due to lower consumer spending on big-ticket items. Lowe’s shares fell over 1% early Wednesday morning.
Costco’s (COST) shares were downgraded from “Buy” to “Neutral” by Northeast Research analysts despite the company’s better-than-expected earnings report last week. Costco shares closed at a record above $681 on Monday, but declined by about 1.5% to $667 on Wednesday morning.
Draw
My stock watchlist for today: FedEx
FedEx (FDX) shares dropped nearly 10% at market open on Wednesday after the company lowered its sales outlook due to weak demand from customers.
In its second-quarter earnings report for the fiscal year, the company said it expects a low single-digit revenue decline for the full fiscal year, a deeper drop than analysts’ expectations and a reduction from previous forecasts of flat year-over-year sales. The company noted that weak economic conditions will continue to affect delivery demand in the coming months, but it pointed out that operating income will improve due to recent cost-cutting initiatives.
Since FedEx shares hit a low in the third quarter of 2022, they have risen steadily except for a significant drop to the 200-day moving average in October. Today, watch for an important horizontal line around $270 and a trend line currently near the $250 level as potential support areas on the chart.
Stocks that moved significantly before market open
Gains: Paramount Global (PARA) shares rose over 1% after Wells Fargo upgraded the stock from “underweight” to “equal weight,” citing increased odds of merger or acquisition amid rumors of a potential sale.
Losses: Argenx SE (ARGX) shares dropped nearly 25% after announcing its experimental antibody treatment failed to meet primary and secondary endpoints in a late-stage clinical trial for two skin blistering diseases. FedEx Corp. (FDX) shares fell 11% after announcing second-quarter fiscal earnings that missed expectations and lowered its full-year revenue outlook. General Mills Inc. (GIS) shares dropped about 4% after reporting quarterly sales that exceeded Wall Street estimates. The company stated it faced “slower than expected volume recovery” and reduced its full-year sales and earnings outlook.
Futures retreat as progress stalls
Futures linked to the Dow Jones Industrial Average fell about 0.2% in pre-market trading on Wednesday.
S&P 500 futures were also down 0.2%.
Nasdaq 100 futures declined nearly 0.3%.
Source: TradingView.com.
Since FedEx shares hit a low in the third quarter of 2022, they have risen steadily except for a significant drop to the 200-day moving average in October. Today, watch for an important horizontal line around $270 and a trend line currently near the $250 level as potential support areas on the chart.
See here for more charts to watch today.
– Tim Smith
Stocks that moved significantly before market open
Gains: Paramount Global (PARA) shares rose over 1% after Wells Fargo upgraded the stock from “underweight” to “equal weight,” citing increased odds of merger or acquisition amid rumors of a potential sale.
Losses: Argenx SE (ARGX) shares dropped nearly 25% after announcing its experimental antibody treatment failed to meet primary and secondary endpoints in a late-stage clinical trial for two skin blistering diseases. FedEx Corp. (FDX) shares fell 11% after announcing second-quarter fiscal earnings that missed expectations and lowered its full-year revenue outlook. General Mills Inc. (GIS) shares dropped about 4% after reporting quarterly sales that exceeded Wall Street estimates. The company stated it faced “slower than expected volume recovery” and reduced its full-year sales and earnings outlook.
Futures retreatFutures Contracts with Stalled Progress
Futures contracts linked to the Dow Jones Industrial Average fell by about 0.2% in Wednesday’s pre-market trading.
S&P 500 futures were also down by 0.2%.
Nasdaq 100 contracts decreased by nearly 0.3%.
Source: TradingView.com.
Since FedEx shares reached their lowest point in the third quarter of 2022, they have consistently risen except for a significant decline to the 200-day moving average in October. Today, pay attention to an important horizontal line around $270 and a trend line currently located near the $250 level as potential support areas on the chart.
See here for more charts to monitor today.
– Tim Smith
Source: https://www.investopedia.com/dow-jones-today-12202023-8418466
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