Markets News, April 26, 2024: S&P 500, Nasdaq Snap Losing Streaks; Alphabet Soars Past $2T - Investopedia

Stock Indexes Wrap: Alphabet, Microsoft Spur AI Rally; Intel and Oil Giants Slide

April 26, 2024 04:14 PM EDT

The Dow

Amazon (AMZN) surged 3.4%, boosted by earnings reports from AI hyperscaler peers Alphabet and Microsoft. 

Microsoft (MSFT) gained 1.8% after topping earnings estimates and reporting strong demand for its cloud services. 

Chevron (CVX) ticked up 0.3% after reporting first-quarter profit declined about as much as analysts were expecting. 

Intel (INTC) tumbled 9.2% after forecasting current-quarter revenue below Wall Street's expectations. Analysts at Bank of America and Goldman Sachs lowered their price targets on the stock, citing its relatively limited share of the AI market. 

The S&P 500

RedMed (RMD) led the index higher, climbing 18.9% after topping quarterly earnings estimates. 

Alphabet (GOOGL) soared 10.2% to close with a market cap of more than $2 trillion for the first time. It and Microsoft's earnings reports lifted shares of AI hardware suppliers Super Micro Computer (SMCI), up 8.9%, and Nvidia (NVDA), up 6.2%. 

DexCom (DXCM) tumbled 9.9% despite beating earnings estimates; it raised the lower end of its full-year sales guidance, but the midpoint remained below analysts' estimates.

AbbVie (ABBV) slid 4.6% after warning sales of its blockbuster drug Humira would fall 32% in the current quarter as it loses market share to new generic alternatives.

Phillips 66 (PSX) dropped 3.6% after it reported that a nearly 50% decline in refining margins crimped its quarterly profit. 

ExxonMobil (XOM) shed 2.9% after reporting a larger-than-expected drop in first-quarter profit. 

Paramount (PARA) shares fell 2.2% amid reports its board was considering removing CEO Bob Bakish as it engages in merger talks. 

The Nasdaq 100

The AI rally sparked by Alphabet and Microsoft earnings lifted plenty of semiconductor stocks. Broadcom (AVGO) rose 3.8%, Micron (MU) gained 2.9%, and Advanced Micro Devices (AMD) climbed 2.4%. 

Atlassian (TEAM) tumbled 9.6% after it said its longtime co-CEO would be leaving the company. 

Tesla (TSLA) slid 1.1% after federal regulators said they were investigating its recall of 2 million cars in December to resolve self-driving safety issues.

ResMed Leads Among S&P 500 Gainers

April 26, 2024 03:32 PM EDT

ResMed (RMD) was the best-performing stock in the S&P 500 Friday after the medical device maker reported better-than-anticipated sales and earnings in its fiscal third quarter. 

The company reported net income of $300 million, or $2.04 per share, a 29% increase from the same period last year. Revenue increased 7% to $1.2 billion, driven primarily by growth in its American and software businesses. Revenue and profit both exceeded analysts' forecasts.

Gross margins widened to 57.9% from 55.3% in the year-ago quarter due to lower freight and manufacturing costs.

ResMed shares were up more than 18% with about half an hour left in Friday's session. They have gained about 26% so far this year.

Snap Stock Soars After Strong Advertising Sales Drive Q1 Results and Outlook

April 26, 2024 02:56 PM EDT

Snap (SNAP) shares jumped 26% Friday after the Snapchat owner released quarterly financial results above analysts' estimates and guided better-than-expected current-quarter earnings and revenue amid robust advertising sales and user growth.

In the March quarter, the Generation Z-focused company posted adjusted earnings of 3 cents per share, whereas analysts had expected a loss of a nickel per share. Revenue of $1.19 billion, which primarily comes from advertising, swelled 21% from the year-ago period and topped forecasts of $1.12 billion.

On the user activity front, Snap reported a 10% jump in its daily active users from a year earlier, taking the count to 422 million. Moreover, it expects that number to increase to 431 million by the end of the current quarter, above the 430 million consensus view.

Looking ahead to the June quarter, the company projects revenue of between $1.225 billion and $1.255 billion, with the midpoint of that band coming in above the $1.22 billion Street estimate. It sees adjusted earnings in the period ranging from $15 million and $45 million, which compares to analyst expectations of $15.5 million.

Despite Friday's gains, Snap shares have lost about 15% of their value this year.

-Timothy Smith

Phillips 66's Refining Margins Sink, Dragging Down Profits

April 26, 2024 02:15 PM EDT

Phillips 66 (PSX) shares dropped in intraday trading Friday after the energy producer's quarterly profit fell as refining margins thinned.

The company reported first-quarter net earnings slumped 61.9% to $748 million, with adjusted earnings of $822 million, or $1.90 per share, short of estimates. Revenue rose 3.8% to $36.44 billion, ahead of forecasts.

Phillips 66 noted that its realized refining margins dropped to $10.91 per barrel, nearly half of what they were a year earlier. Market capture, which measures refining profit to industry standards, fell to 69% from 93%.

Shares of Phillips 66 hit an all-time high earlier this month, and even with today's 3.5% decline are up about 14% year-to-date.

-Bill McColl

Inflation Higher, Stocks Higher. What Gives?

April 26, 2024 01:23 PM EDT

This week's economic data did little to revive hopes of imminent rate cuts—inflation remained stubbornly high in the first three months of the year—and yet stocks were mostly in the green Friday and the S&P 500 was squarely on track to snap a three-week losing streak. Why? 

Disappointing quarterly results have sunk a few stocks this week but, for the most part, companies have been reporting resilient earnings. At the end of last week, with 14% of the S&P 500 having reported, the index was reporting earnings growth for the third consecutive quarter. Plus, the percentage of companies beating earnings estimates and the magnitude of those beats were both above their 10-year averages. 

And huge earnings beats from the likes of Alphabet (GOOGL) and Microsoft (MSFT) this week have even improved the outlook. 

"Given the elevated levels of inflation…the market is going to need to get over hopes for Fed rate cuts," wrote Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, in a note on Friday.

"We're still optimistic on the market, however, as we believe that rate cuts aren't necessary for the bull market to continue. Instead, continued economic expansion and growth in corporate profits…are what will propel stock prices to new highs," he wrote.  

Though the path higher, like inflation's path lower, will be a bumpy one, he warned. "Just be aware that volatility around the election, geopolitical events and even future inflation data is likely."

Intel Stock Slides as Weak Guidance Outweighs Earnings Beat

April 26, 2024 12:31 PM EDT

Intel (INTC) stock sank Friday as weaker-than-anticipated revenue guidance for the second quarter overshadowed the chipmaker's topping revenue and earnings estimates for the first three months of the year.

The company reported a loss of $437 million, or 9 cents per diluted share, in the first quarter, an 86% smaller loss than in the year-ago quarter and better than analyst estimates of a $454.86 million, or 13 cent-per-share, loss.

Adjusted earnings, which don't include items such as share-based compensation and restructuring charges, came in at $759 million, or 18 cents per diluted share, also better than estimates.

But the company forecast Q2 revenue would come in between $12.5 billion and $13.5 billion, with the higher end of that guidance falling short of the $13.79 billion consensus among analysts surveyed by Visible Alpha.

Intel shares were down more than 9% Friday afternoon, bringing their year-to-date losses to almost 37%.

-Mrinalini Krishna

ExxonMobil Stock Slips as Profit Falls Short of Estimates

April 26, 2024 11:32 AM EDT

Shares of ExxonMobil (XOM) slipped in early trading Friday as the oil and gas giant reported larger year-over-year profit declines than analysts were expecting.

ExxonMobil reported net income $3 billion lower than the first quarter of 2023, falling to $8.22 billion, or $2.06 per share, from the $11.43 billion and $2.79 per share the company reported last year. Analysts expected the decline to be smaller, projecting income of $8.77 billion, or $2.20 per share.

However, the total revenue it reported of $83.08 billion was above analyst estimates of $82.11 billion thanks to increased production from some of Exxon's investments like its operations in Guyana.

Despite oil prices remaining high, Exxon and Chevron (CVX) were both projected to post less productive quarters thanks to lower natural gas prices and slim margins on refined products. Chevron also reported earnings Friday, coming closer to analyst projections.

Exxon shares were down 3.6% late in the morning on Friday. The stock has gained 17% so far this year.

-Aaron McDade

Microsoft Stock Jumps On Earnings Beat Driven By Cloud Segment

April 26, 2024 10:59 AM EDT

Microsoft (MSFT) shares rose Friday after the company reported better-than-expected third-quarter earnings driven by its cloud business.

The company's revenue for the third quarter of fiscal 2024 was $61.9 billion, above analyst expectations and a 17% increase from the year-ago period. That growth came from a 23% year-over-year increase in Microsoft's cloud revenue to $35.1 billion.

Net income and diluted earnings per share (EPS) were also above analysts' estimates and grew 20% from a year earlier.

Microsoft shares were up more than 3% at $411.43 Friday morning, bringing the stock's year-to-date gain to nearly 10%.

-Naomi Buchanan

Alphabet Reclaims Spot in $2 Trillion Club

April 26, 2024 10:29 AM EDT

Alphabet shares soared on Friday morning, launching the company into the tiny group of companies worth more than $2 trillion. 

It's not the first time the company's achieved the milestone. Alphabet became only the third U.S. company, after Apple (AAPL) and Microsoft (MSFT), to cross the $2 trillion mark during intraday trading on November 8, 2021. However, it couldn't hold on to the day's gains, ultimately closing below the threshold. 

After closing Thursday with a market cap of about $1.95 trillion, the stock needs to rise 2.5% on Friday to close above $2 trillion for the first time. With Friday's 10% surge, Alphabet's market value stood at more than $2.14 trillion, giving it a substantial buffer. 

Google Parent Alphabet Jumps on Earnings Beat, First-Ever Dividend

April 26, 2024 10:03 AM EDT

Google parent Alphabet (GOOGL) saw its shares jump over 10% Friday morning after the tech giant reported first-quarter results well above analysts' expectations, as well as plans to distribute its first-ever dividend.

Alphabet reported revenue rose 15% year-over-year to $80.54 billion, above analyst estimates compiled by Visible Alpha of $78.8 billion. Alphabet's profit of $23.66 billion, for diluted earnings per share of $1.89, beat estimates of $18.95 billion, or $1.51 per share.

For the first time in the company's history, Alphabet's board announced the approval of a dividend program, with a dividend of 20 cents per share to be paid on June 17 to shareholders of record as of market close June 10.

A massive stock buyback program was also announced, with the company's board approving $70 billion to repurchase shares.

After falling close to 2% in Thursday session, Alphabet shares skyrocketed 10% Friday to $171, pushing the company's market cap above $2 trillion.

-Aaron McDade

Stocks Making the Biggest Moves Premarket

April 26, 2024 09:20 AM EDT

Gains:

• Snap (SNAP): Shares of the social media company surged 25% after it reported a return to double-digit revenue growth in the first quarter. 
• Alphabet (GOOGL): Shares of the tech giant jumped 11% after it announced its first dividend, authorized a $70 billion buyback program, and reported blowout first-quarter earnings. 
• Microsoft (MSFT): Shares climbed more than 3% after the company reported better-than-expected quarterly results, with cloud revenue increasing more than 20% from the prior year.
  

Losses:

• Intel (INTC): Shares of the chipmaker tumbled 8% after its current-quarter revenue guidance fell short of Wall Street's expectations, overshadowing better-than-anticipated earnings. 
• Atlassian (TEAM): Shares of the enterprise software maker fell more than 7% after the company said longtime co-CEO Scott Farquhar would step down. 
• ExxonMobil (XOM): Shares of the oil giant slid 2% after reporting profit declined more than analysts were expecting in the first quarter, with lower natural gas prices and slimmer refinery margins. 

Stock Futures Climb Ahead of Inflation Data

April 26, 2024 08:26 AM EDT

Futures contracts connected to the Dow Jones Industrial Average were up 0.2% in premarket trading on Friday.

S&P 500 futures were 0.8% higher.

Nasdaq 100 futures rose 1% about an hour before markets opened.