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Dow Jones Today: Strong Rise in Big Tech Drives Nasdaq Higher While Oil and Dollar Decline
By: Colin Lidley
Colin is a co-editor specializing in technology and financial news. He has over three years of experience in editing, reviewing, and fact-checking current financial events and politics. He holds a master’s degree in journalism from The New School and a bachelor’s degree in history and political science from McGill University.
Updated on December 7, 2023
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Stocks rose on Thursday, led by big tech as investors analyzed further labor market data and signs of a slowdown in the Chinese economy that affected oil prices.
The Nasdaq climbed 1.4% on Thursday afternoon, while the S&P 500 rose 0.8% and the Dow Jones Industrial Average increased by 0.1%.
Initial jobless claims for the week ending December 2 were 220,000, a slight increase from the previous week’s adjusted level of 219,000 according to economists’ estimates. This is the third piece of labor market data that the markets receive this week after earlier reports showed a significant decline in job opportunities in October and private employers added far fewer jobs than expected in November. All leading up to tomorrow’s jobs report from the Labor Department.
China’s trade data showed a 0.6% decline in imports for November compared to the same month last year when the economy was still suffering from COVID restrictions. Oil prices shed initial gains, with U.S. crude falling back below $70 a barrel.
The dollar weakened against the euro, the British pound, and the yen.
Stocks fell yesterday as year-end gains receded with job data that had investors preparing for a more challenging downturn than expected. Oil prices and Treasury yields also dropped.
JetBlue Stock Rises on Boosted Fourth Quarter Guidance
Shares of JetBlue Airways (JBLU) rose over 11% on Thursday morning after the airline raised its guidance for the fourth quarter and the full year, citing unexpectedly strong demand.
The company still expects to see a decline in revenue in the fourth quarter compared to the same period last year, but it now anticipates a drop of between 4% and 7%; it had previously predicted a decrease of 6.5% to 10.5%.
The company stated in its regulatory filing, “Travel demand remains healthy. Since the end of October, bookings for the peak holiday period and non-holiday travel have exceeded expectations.”
JetBlue also narrowed its expectations for average fuel prices, lowering the upper end of the estimated range from $3.20 per gallon to $3.15. Oil prices have steadily declined since reaching a one-year high in late September. Even huge production cuts from OPEC+ failed to counter the effects of economic data suggesting a global slowdown, thereby weakening oil demand.
The gains that JetBlue achieved on Thursday brought its shares to $5.30, the highest level in 3 months.
AMD Stock Rises with Microsoft, Meta, and OpenAI Utilizing Its Latest AI Chip
Shares of Advanced Micro Devices Inc. (AMD) rose over 6% on Thursday morning after the chipmaker launched its latest artificial intelligence (AI) chip, which will be used by Microsoft, Meta, and OpenAI.
AMD’s CEO, Lisa Su, described the MI300 data processing unit as “the world’s highest performance acceleration unit for creative AI” at the company’s launch event on Wednesday.
AMD plans to
OpenAI, the maker of ChatGPT, will use the MI300 in its Triton 3.0 programming system, while Meta will add the chip to its data centers, AMD said. Microsoft also announced that it will use the new AMD chip in its cloud computing sector, Azure.
Wedbush analysts said in a note on Thursday following the chip launch: “AMD remains a clear challenge to NVDA and is well-positioned for a significant rise in 2024.”
With the gains in AMD stock on Thursday, the company’s stock value has nearly doubled since the beginning of the year, while Nvidia (NVDA) shares have more than tripled in the same period.
Chewy stock drops due to lowered guidance amid economic uncertainty
Shares of online pet products store Chewy (CHWY) fell by 10% to around $17.40, near an all-time low, on Thursday after the company announced sales below Wall Street expectations and lowered its full-year guidance.
Chewy reported revenues of $2.74 billion in the third quarter, an 8% increase from the same period last year but at the lower end of guidance and below analysts’ expectations. Although adjusted earnings of 15 cents per share topped Wall Street’s expectations of a loss of 6 cents per share.
Chewy’s weak revenues last quarter and “ongoing macro pressure” noted in the retail industry led the company to lower its sales guidance for the full year to a range between $11.08 billion and $11.1 billion, down from the previous expectations of net sales between $11.15 billion and $11.35 billion.
Chewy is the latest addition to a long list of retailers lowering their expectations for the critically important holiday shopping season as consumers embrace frugality amid rising prices and uncertain economic outlooks.
Stocks making the biggest moves before the open
Gains:
– Cerevel Therapeutics Holdings (CERE): Shares rose by 12% to around $42 after AbbVie (ABBV) announced it would acquire the neuro biotech company for $8.7 billion, or $45 per share. AbbVie shares fell by 0.3%.
– Alphabet Inc. (GOOGL): The tech giant’s shares rose by more than 3% after it unveiled Gemini, an AI model that claims to outperform Microsoft (MSFT)-backed GPT-4 from OpenAI.
– Advanced Micro Devices Inc. (AMD): Shares of the chip company gained more than 2% after it launched a new graphics processing unit designed to compete with Nvidia (NVDA) in AI. Tech giants Meta Platforms (META) and Microsoft said they would trial the chip as an alternative to Nvidia’s offerings.
Losses:
– Chewy Inc. (CHWY): Shares of the online pet products store dropped by 11% to near an all-time low after third-quarter sales fell short of expectations and the company’s forecast for the fourth quarter disappointed.
– GameStop Corp. (GME): Shares of the video game retailer fell by about 7% after it stated that third-quarter sales declined by 9% compared to the same period last year.
– Take-Two Interactive Software (TTWO): Shares of the video game publisher fell by more than 1% after Bank of America cut the stock rating to Neutral from Buy and forecast that the sixth installment of the massive Grand Theft Auto franchise would be released in 2025 after analyst expectations.
Dow Futures lag behind the broader market in pre-market trading
Contracts tied to the Dow Jones Industrial Average were down by 0.1% in pre-market trading on Thursday.
S&P 500 futures are up by 0.1%.
Nasdaq 100 futures rose by 0.4%.
Sources of the Article
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reports, and interviews with industry experts. We also reference original research from other reputable publishers when appropriate. You can learn more about the standards we follow in producing accurate and unbiased content in our editorial policy.
U.S. Department of Labor. “Weekly Unemployment Claims for Insurance.”
U.S. Securities and Exchange Commission. “Form 8-K – JetBlue Airways Corporation.”
AMD. “AMD Showcases Growing Momentum for AI Solutions Powered by AMD Technology From Data Centers to Personal Computers.”
Microsoft Corporation. “Using a systems approach to chips, Microsoft aims to customize everything ‘from silicon to services’ to meet demand for AI.”
Wedbush. “MI300 Launches into an AI-Accelerated Market.”
Chewy Inc. “Letter to Shareholders – Q2 Fiscal Year 2023.”
Chewy Inc. “Letter to Shareholders – Q3 Fiscal Year 2023.”
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