The S&P 500 (^GSPC) continued its record-breaking rally as focus turned to the day's earnings streams for insight into the health of America's businesses and economy.
The S&P 500 rose nearly 0.3% to hit a new closing high of 4,864.61. The Nasdaq Composite (^IXIC) also rose sharply on Tuesday, rising 0.4%, while the Dow Jones Industrial Average (^DJI) fell about 0.2% after the blue-chip index fell for the first time on Monday broke the 38,000 mark.
After a technology-driven rally pushed the market to new record highs, gains in other sectors were the main market drivers on Tuesday.
An earnings disappointment weighed on the Dow as 3M (MMM) fell more than 10% on Tuesday after the company's 2024 earnings outlook fell short of Wall Street's expectations.
Consumer staples (XLP) and communications services (XLC) were the biggest gainers in the S&P 500, with consumer staples gaining more than 1% as investors digested quarterly results from Procter & Gamble (PG) and Verizon (VZ), among others.
Read more: What the Fed's pause on rate hikes means for bank accounts, CDs, loans and credit cards
Elsewhere on the earnings front, an optimistic 2024 earnings forecast from United Airlines (UAL) helped push shares of the company up 5% on Tuesday. Shares of other airlines, including Delta (DAL) and American Airlines (AAL), rose after the forecast, even as United warned of a setback from grounding its Boeing 737 Max 9 planes.
Netflix (NFLX) is also in focus as the streaming giant reports earnings after the close. The company on Tuesday announced a deal with TKO Group's WWE (TKO) that will bring WWE's flagship program, Raw, to the streaming service beginning in January 2025. TKO shares rose nearly 15% on the news.
Live9 updates
Tue, Jan 23, 2024 at 9:03 p.m. GMTThe S&P 500 reaches a new high
The S&P 500 (^GSPC) continued its record-breaking rally as focus turned to the day's earnings streams for insight into the health of America's businesses and economy.
The S&P 500 rose nearly 0.3% to hit a new closing high of 4,864.61. The Nasdaq Composite (^IXIC) also rose sharply on Tuesday, rising 0.4%, while the Dow Jones Industrial Average (^DJI) fell about 0.2% after the blue-chip index fell for the first time on Monday broke the 38,000 mark.
- Tue, Jan 23, 2024 at 8:16 p.m. GMT
Can you smell what the board is cooking?
News early Tuesday that Netflix (NFLX) and the TKO Group (TKO), which owns WWE, would be working together to bring Raw to the streaming service grabbed most of the headlines and sent TKO's shares up more than 20% 16% increase.
But in another release out this morning, TKO changed its board and added one of the era's biggest stars to its directorial ranks.
Dwayne “The Rock” Johnson has joined TKO’s board of directors, effective today, in an agreement that also gives Johnson ownership of the “The Rock” brand name.
“I am very motivated to help continue to grow our TKO, WWE and UFC businesses globally as the world's leading sports and entertainment companies,” Johnson said in a press release, “while proudly representing so many phenomenal athletes and artists, who show up every day.” Day in which they work hard with their own hands to make their dreams come true and present them to our audience. I was there, I’m still there, and this is for them.”
In an SEC filing, TKO also announced that The Rock will receive $30 million in company stock as part of his licensing agreement with Johnson.
TKO also announced that Brad Keywell, co-founder of Groupon, will join the board.
- Tue, Jan 23, 2024 at 6:45 p.m. GMT
Not all stocks are expensive as stocks are at market highs
Major stock indexes are at market highs, and many Wall Street strategists have pointed out that the S&P 500 (^GSPC), trading at more than 21 times forward earnings, represents a historically high valuation for the stock market .
But a new analysis from the UBS team on Tuesday shows that not everything is currently too expensive.
Strategist Patrick Palfrey highlighted that 77% of S&P 500 companies are trading at a discount to their January 2022 levels (the previous market high). 55% of these companies currently have a lower price-to-earnings ratio than the previous market high.
While one could see this as a buying opportunity if stocks don't return to 2021 levels, there is an important caveat. An analysis last Friday by Bespoke Investment Group showed that Microsoft (MSFT) and Nvidia (NVDA) accounted for 75% of the S&P 500's gains this year.
Both stocks are trading near all-time highs and are valued higher than they were in January 2021.
As of January 19, NVIDIA $NVDA and Microsoft $MSFT accounted for about 75% of the S&P 500's gain this year, while the 20 largest stocks in the index accounted for 110% of the index's upward movement. The remaining approximately 480 stocks had a slowing effect. pic.twitter.com/b8EvAIWfhj
— Bespoke (@bespokeinvest) January 22, 2024
- Tue, Jan 23, 2024 at 5:53 p.m. GMT
Staples and Communications Services lead market action
After a tech rally pushed the market to new record highs, gains in other sectors are the key market drivers on Tuesday.
Consumer staples (XLP) and communications services (XLC) were the biggest gainers in the S&P 500 (^GSPC), rising more than 0.5% in afternoon trading as investors digested quarterly results from Procter & Gamble (PG) and Verizon (VZ). . , among others.
Broadly speaking, the Dow Jones Industrial Average (^DJI) fell about 0.5% after the blue-chip index broke 38,000 for the first time on Monday. The S&P 500 and the tech-heavy Nasdaq Composite (^IXIC) both slipped just below zero.
- Tue, Jan 23, 2024 at 5:33 p.m. GMT
DR Horton weighs on homebuilder stocks amid jitters over rising interest rates and stimulus
Homebuilder stocks have been among the highlights of the market rally, but Tuesday's news shows the sector remains sensitive to interest rates and their impact on the housing market.
Shares of DR Horton (DHI) fell 9% midday Tuesday after the homebuilder reported weaker-than-expected quarterly orders and reported first-quarter earnings per share that fell short of analyst estimates. Investor reaction also pushed the SPDR S&P Homebuilders ETF (XHB) down as much as 3%.
Both XHB and DR Horton closed at record highs on Monday.
Specifically, DR Horton said in his call with analysts that he would be cautious about making changes to his concessions strategy – which consists of mortgage rate buybacks that squeeze margins but make homes more affordable for buyers – if mortgage rates continue to fall.
“The use of these interest rate purchases is not new to us over the last 12 months,” CEO Paul Romanowski said on Tuesday. “We have been using this incentive for more than 24 months. So I believe that on a future basis we will remain competitive, not only in the new home market, but especially in the resale market, and have the opportunity to achieve a lower monthly amount.” Paying the same costs as a home is advantageous. Therefore, we have no plans to stop using it in the near future, even if prices decrease.”
This comment differs from that made by KB Home (KBH) earlier this month, which pointed to a decline in incentives for the first quarter of this year.
Mortgage rates fell to a seven-month low of 6.6% last week, down from 6.66% a year ago and September's 7%.
However, longer-term interest rates, which are factored into mortgage rates, have risen recently as investors become less optimistic about the Federal Reserve's rate cuts beginning in March.
And despite weaker pressure from DR Horton, new construction has been a key source of housing inventory growth as supply in the resale market collapsed to its lowest level in decades last year. In response, homebuilders across the country have rolled out juicer incentives to stimulate buyer interest and mitigate the sticker shock of higher interest rates and home prices.
Tue, January 23, 2024 at 4:45 p.m. GMTOil futures fluctuate as Libya resumes production, cold temperatures impact US production
Oil futures fluctuated on Tuesday after Libya restarted production at its largest oil field, while freezing temperatures across North Dakota continued to hit production.
West Texas Intermediate (CL=F) fell as much as 1% before recovering to trade around $75 a barrel by midday. Brent futures (BZ=F) also fell but pared losses to climb above $80 a barrel after rising nearly 2% in the previous session.
Libya's oil production has returned to 1.2 million barrels a day after a three-week pause due to protests.
Meanwhile, a cold snap in the U.S. recently halted production of nearly 200,000 barrels per day of crude oil in North Dakota.
“However, unless we see an escalation of tensions in the Red Sea that actually leads to a decline in oil sales, the upside for crude oil prices appears to be limited,” Dennis Kissler, senior vice president at BOK Financial, said on Tuesday.
Read more here.
- Tue, January 23, 2024 at 4:00 p.m. GMT
Netflix is hosting WWE's Raw as part of a live sports entertainment push
Netflix (NFLX) and TKO Group Holdings' WWE (TKO) announced a new partnership early Tuesday that will bring WWE's flagship program Raw to the streaming service starting in January 2025.
The 10-year deal marks Netflix's first major entry into the world of live sports entertainment, while Raw leaves linear television for the first time since its launch 31 years ago. The show currently airs on NBCUniversal's USA Network and attracts 17.5 million unique viewers annually, according to the companies.
Although the financial details of the deal were not disclosed, multiple reports stated that the deal is worth more than $5 billion.
Shares of TKO, which also serves as parent company of UFC, rose more than 20% in early trading. Netflix shares were flat at the open after rising about 2% in premarket trading.
Steve Cahall, an analyst at Wells Fargo, described the move as a “logical next step” in a reaction note to customers.
“It contributes to NFLX’s ability to continue to seek growth beyond paid sharing as new content = more ads and/or more subscribers,” he said. “We believe NFLX’s primary focus is on increasing advertising scale, as the company needs reach and frequency to secure a spot at the top with U.S. ad buyers.”
Still, the analyst noted that WWE isn't quite the same as major sports rights, as the financial gap between the two companies is about $500 million annually. “The inevitable question is when NFLX will move into live sports, but we think that will be years away,” he said.
The news comes as a TKO also announced Added Dwayne “The Rock” Johnson to its board. Netflix, meanwhile, is expected to report its quarterly results after the bell on Tuesday.
Read more here.
- Tue, Jan 23, 2024 at 3:33 p.m. GMT
Stocks on the rise after earnings
Earnings dominated market action on Tuesday morning as results from several companies disappointed Wall Street analysts and pushed the Dow Jones Industrial Average (^DJI) lower.
3M Company (3M) slumped nearly 10% on Tuesday as the company's 2024 profit outlook fell short of Wall Street expectations.
General Electric (GE) beat earnings expectations for the previous quarter, but shares fell about 2% in morning trading after its current-quarter earnings outlook came in lower than analysts had predicted.
Johnson & Johnson (JNJ) shares fell more than 2% as the company noted that it is “in progress” to reach a settlement with 43 state attorneys general to resolve claims regarding J&J's marketing of its talc product. The Wall Street Journal has reported that J&J will pay $700 million to settle the investigation.
Verizon (VZ) had a different earnings performance, with shares rising nearly 5% in morning trading. The wireless carrier recorded 449,000 new postpaid phone additions, well above Wall Street estimates of 232,000 new additions.
- Tue, Jan 23, 2024 at 2:32 p.m. GMT
Stocks open mixed
U.S. stocks paused in a record-breaking rally as focus turned to the day's earnings streams for insight into the health of America's businesses and economy.
The Dow Jones Industrial Average (^DJI) fell about 0.1% after the blue-chip index broke 38,000 for the first time on Monday. The S&P 500 (^GSPC) remained 0.1% near a record close, while the tech-heavy Nasdaq Composite (^IXIC) also rose sharply.
Key Dow stocks 3M and Johnson & Johnson weighed on the main average as stocks fell following quarterly earnings reports.
Tue, Jan 23, 2024 at 9:03 p.m. GMT
Tue, Jan 23, 2024 at 8:16 p.m. GMT
Tue, Jan 23, 2024 at 5:33 p.m. GMT
Tue, January 23, 2024 at 4:45 p.m. GMT
Tue, January 23, 2024 at 4:00 p.m. GMTClick here for a detailed analysis of the latest stock market news and events affecting stock prices.
Read the latest financial and business news from Yahoo Finance