Equity Indexes Wrap: Semiconductor Sell-Off Continues; Entertainment Stocks Ride Oscar Buzz Higher

March 11, 2024 04:12 PM EDT

The Dow

UnitedHealth Group (UNH) rose 2.7% as the stock continued to rebound from a sell-off late last month amid a cyberattack that disrupted claim and payment processing across the country.

Disney (DIS) rose 1.8% as the entertainment giant hit back at activist investor Nelson Peltz, asking shareholders to reject his efforts to secure two seats on the company’s board.

Boeing (BA) shares fell 3.1% amid reports the Department of Justice had opened a criminal investigation of the Alaska Airlines flight that lost part of its fuselage in January.

Merck (MRK) slid 0.6% after analysts at Société Générale downgraded the stock to sell, citing the impending expiration of its Keytruda patent.

The S&P 500

Entertainment companies advanced a day after the Oscars. Paramount Global (PARA) advanced 6.3%, while Comcast (CMCSA) gained 2.3% after its subsidiary Universal Pictures’ biopic “Oppenheimer” took home the top prize. 

Warner Bros. Discovery (WBD) gained 3.9% after its film “Barbie” gained plenty of attention, if few awards, on Hollywood’s biggest night.

EQT (EQT) fell 7.8% after offering to buy former unit Equitrans Midstream (ETRN) in a $5.5 billion deal. 

Applied Materials (AMAT) fell 2.1% as it was swept up in a chip sell-off despite the company raising its quarterly dividend by 25%. 

Nvidia (NVDA) slipped 2%, extending Friday’s declines as three authors sued the company, alleging the use of their books as AI training materials infringed their copyright.

The Nasdaq 100

Moderna (MRNA) rose 8.7% after it stated its intention to launch a clinical trial of an experimental skin cancer vaccine in conjunction with Merck’s Keytruda.

Xcel Energy (XEL) advanced 3.7% after Citi analysts upgraded the stock to buy, citing their belief the sell-off sparked by concerns about the company’s liability for Texas wildfires is overdone. 

PDD Holdings (PDD) rose 1.4% after getting an upgrade from analysts at Jefferies.

Semiconductor and AI-related stocks continued to drop, extending Friday’s sell-off. Meta (META) lost 4.4%, while Advanced Micro Devices (AMD) slid 4.3%, and ASML Holding (ASML) fell 3.2%.

Moderna Leads S&P 500 as It Undertakes Skin Cancer Vaccine Trial With Merck

March 11, 2024 03:08 PM EDT

Moderna (MRNA) was the best-performing stock in the S&P 500 on Monday after the vaccine maker launched a clinical trial of its experimental skin cancer vaccine used in tandem with Merck’s (MRK) Keytruda. 

The trial is expected to begin next month and last until April 2029, according to information posted on a government website. 

The trial is a continuation of Moderna and Merck’s ongoing collaboration on skin cancer treatments and vaccines. In December, the companies said a personalized vaccine developed by Moderna, when taken with Keytruda, reduced patients’ risk of skin cancer recurring by 49% compared with Keytruda alone. 

Moderna shares were up more than 10% in late trading Monday, putting them up 14% this year. Still, the stock has lost more than 75% of its value since peaking in the summer of 2021 amid the rollout of its Covid-19 vaccine, the biotech’s only commercial product. 

Merck shares were off about 1% after analysts at Société Générale downgraded the stock to sell, citing the impending expiration of its Keytruda patent.  

Duolingo Stock Advances After JPMorgan Initiates Coverage With ‘Overweight’ Rating

March 11, 2024 02:19 PM EDT

Shares of education technology company Duolingo Inc. (DUOL) gained Monday as JPMorgan initiated coverage of the provider of language-learning products with an “overweight” rating. The investment bank also set a price target on the stock at $270, about 26% above Friday’s closing price.

Analysts Bryan Smilek and Doug Anmuth pointed to Duolingo’s “freemium” business strategy, saying it helps boost subscriber penetration.

They noted that their “bull thesis” about the company was based on several factors, including strong user growth “driven by product optimizations, gamification/socialization, & social-first marketing strategy.” They also predicted the number of paid subscribers would double to 12.3 million by 2026, arguing that demand will jump for non-native speakers learning English.

Duolingo shares, which rose more than 4% to $222.74 Monday afternoon, hit an all-time high in December but stumbled this year before bouncing back near the end of last month. They’re up about 90% in the past year.

–Bill McColl

What To Expect From Oracle’s Earnings Report Monday

March 11, 2024 01:45 PM EDT

Oracle (ORCL) is set to announce its third-quarter earnings for the 2024 fiscal year after the closing bell on Monday, March 11, which will show how the company’s cloud revenue is faring and could offer insight into its data center expansion to meet demand amid the artificial intelligence (AI) boom.

Analysts project Oracle’s revenue to come in at $13.28 billion for the third quarter of fiscal 2024, up from the previous quarter and year-ago period, according to estimates compiled by Visible Alpha.

Adjusted net income is expected to be $3.87 billion, an increase from $3.38 billion in the fiscal third quarter of 2023, while diluted earnings per share (EPS) are projected at $1.37, compared to $1.22 in the same period a year earlier.

When Oracle reported results for the previous quarter in December, shares fell after the company missed cloud growth expectations. Analysts project revenue for Oracle’s cloud segment at $5.06 billion, which would be a 23% jump from the same period the previous year.

–Naomi Buchanan

Boeing Stock Falls Following Reports of DOJ Investigation, LATAM Flight Injuries

March 11, 2024 12:58 PM EDT

Boeing (BA) shares fell Monday following reports of injuries from a “technical problem” on a LATAM flight involving a Boeing aircraft and a Department of Justice (DOJ) investigation into a Jan. 5 Alaska Airlines (ALK) flight where a door panel came loose from a plane.

The Justice Department has begun interviewing pilots and flight attendants who were on the plane and has taken steps to contact passengers, according to a report by The Wall Street Journal.

Separately, a LATAM Airlines flight arriving in Auckland, New Zealand, on Monday reportedly experienced a “technical event” that caused a “strong movement.” The Boeing 787-9 Dreamliner landed safely, but an estimated 50 passengers and crew were treated for injuries by first responders at the airport.

Boeing shares were 2.9% lower at $192.83 early Monday afternoon. They’ve lost about 26% of their value since the start of 2024 amid concerns about ongoing investigations and other issues.

–Aaron McDade

EQT Buys Equitrans Midstream To Expand Its Natural Gas Operations

March 11, 2024 12:26 PM EDT

EQT Corp. (EQT) was the worst-performing stock in the S&P 500 midday Monday after the natural gas producer announced it was buying midstream infrastructure provider Equitrans Midstream Corp. (ETRN) for approximately $5.5 billion.

EQT explained that the deal gives Equitrans investors 0.3504 share of EQT stock for every share of Equitrans they own. It added that this equaled an implied value of $12.50 per share based on the volume-weighted average of Equitrans stock for 30 days ending on Friday. Equitrans shares closed then at $11.15, while EQT shares finished at $37.52.

EQT said the merger creates “America’s first large-scale, integrated natural gas producer.” The combined company is expected to be valued at more than $35 billion.

Shares of Equitrans Midstream pared early gains and were up 2.4% as of 12:20 p.m. ET Monday, but were still trading near their best levels in more than two years. EQT shares were down 8.2% to $34.45 and have lost more than 10% so far in 2024.

–Bill McColl

Choice Hotels Ends $7.8 Billion Takeover Bid for Wyndham

March 11, 2024 11:49 AM EDT

Choice Hotels International (CHH) has ended its roughly $7.8 billion takeover bid for competitor Wyndham Hotels & Resorts (WH), as it accused Wyndham’s board of a “refusal to constructively and substantively engage on terms.”

The acquisition attempt began nearly a year ago, and Choice’s attempts to buy Wyndham transformed over time from an acquisition offer to a takeover attempt in December. Choice said it generated some support among Wyndham’s shareholders, but has determined that there is no “path towards a transaction” available at this time.

For now, Choice said it will refocus on its own operations, and also announced that its board has authorized an increase in its stock buyback program by 5 million shares, which would be worth about $632 million at Choice’s current price.

Choice Hotels shares were up 4.3% at $126.64 late Monday morning, while Wyndham shares were up 1.2% to $76.94.

–Aaron McDade

Reddit Plans To Raise Up To $748 Million in IPO

March 11, 2024 11:15 AM EDT

Reddit aims to raise up to $748 million in its upcoming initial public offering (IPO), according to a filing with the Securities and Exchange Commission (SEC) Monday.

The social media company said it plans to sell 22 million shares for $31 to $34 each, with 1,760,000 shares, or 8% of shares offered, reserved for its users and moderators.

Reddit previously announced its user share program is set to come in six phased priority tiers, with each eligible participant assigned a tier “based on that participant’s contributions to Reddit” measured by Redditors’ karma, the metric of a user’s community contributions to the platform.

The company had filed for its IPO to trade on the New York Stock Exchange (NYSE) under the symbol “RDDT” at the end of February.

–Naomi Buchanan

Bitcoin Extends Bull Run, Climbing to Record High Above $72K

March 11, 2024 10:29 AM EDT

Bitcoin (BTCUSD) climbed to a record high of more than $72,000 on Monday morning, extending a major rally over the last month as money has rushed into bitcoin ETFs ahead of a much-anticipated halving event. 

Bitcoin and other cryptocurrencies got a boost Monday from the U.K. Financial Conduct Authority after the regulator said it would not object to exchanges listing crypto-backed exchange-traded notes (ETNs). 

The move comes after the U.S. Securities and Exchange Commission in January approved the listing of several spot bitcoin exchange-traded funds (ETFs), a major milestone for the cryptocurrency and its backers within mainstream finance. That decision and Monday’s notice by the U.K. have aided the crypto community’s claims of legitimacy and lowered the bar to investing in cryptocurrencies. 

Since the SEC’s decision in January, money has poured into the new ETFs. BlackRock’s iShares Bitcoin Trust (IBIT) exceeded $10 billion in assets under management last week. It reached the milestone in a record two months, boosted by both billions of dollars of inflows and the soaring price of Bitcoin.

Bitcoin has gained nearly 50% in the last month alone. The gains have been driven by interest in ETFs and anticipation of an upcoming halving, which is expected to take place next month and will reduce the reward for mining Bitcoin to 3.125 BTC. 

Bitcoin’s gains on Monday morning also buoyed the stocks of crypto-related companies such as major U.S. exchange Coinbase (COIN), which gained 3%.

Shares of MicroStrategy (MSTR), the software company led by Bitcoin bull Michael Taylor, surged more than 9% to a record high after Saylor said the company had purchased 12,000 bitcoins at an average price of $68,477. The addition brings MicroStrategy’s total holdings to about 205,000 bitcoins, valued at more than $14.8 billion.

Stocks Making the Biggest Moves Premarket

March 11, 2024 09:25 AM EDT

Gains:

• MicroStrategy Inc. (MSTR): Shares of the software company, which has sizable Bitcoin holdings, surged more than 9% after its CEO Michael Saylor said the company had acquired another 12,000 bitcoins, bringing its total holdings to 205,000 coins worth nearly $15 billion.
• Equitrans Midstream Corp. (ETRN): Shares rose more than 5% after EQT (EQT) offered to buy the company for about $5.5 billion. EQT shares were down more than 5% in premarket trading.
• Linde Plc (LIN): Shares of the gas company rose more than 2% after it was added to the Nasdaq 100 index effective March 18. 

Losses:

• Wyndham Hotels & Resorts Inc. (WH): Shares fell 5% after Choice Hotels (CHH) walked away from its efforts to acquire the hotel operator. Choice shares jumped more than 6%.
• Boeing Co. (BA): Shares of the plane manufacturer fell more than 2% after the Justice Department opened a criminal investigation into this year’s Alaska Airlines incident.
• Nvidia Corp. (NVDA): Shares of the semiconductor maker fell more than 1%, extending Friday’s 5% slide, as three authors sued the company for copyright infringement related to the use of their work as training materials for its AI platform.

Stock Futures Fall To Start the Week

March 11, 2024 08:44 AM EDT

Futures contracts connected to the Dow Jones Industrial Average were down 0.4% in premarket trading on Monday.

S&P 500 futures were about 0.5% lower.

Nasdaq 100 futures were down 0.6% about an hour before markets opened.

Fuente