Dow Jones Today: Big Tech, Chip Stocks Boost Nasdaq While The Dow Lags
U.S. Stocks mostly gained Monday, with Big Tech and chipmakers leading equities in a rebound even as Treasury yields rose.
The Nasdaq had its best day in three weeks, rising 1.6%, while the S&P 500 climbed 0.7%. The Dow Jones Industrial Average lagged, slipping about 0.1%.
All three major indexes are down so far this month. The Dow has lost 3%, the S&P 500 has slipped 4.8% and the Nasdaq has dropped 7.4%. Stocks have been under pressure from rising bond yields and a rocky Covid recovery in China.
Chinese stocks slumped again Monday after banks cut a key interest rate less than economists had expected, highlighting the country's need to promote growth and maintain stability. European stocks rose in the morning before losing ground and closing close to flat. Bond yields resumed their climb higher, with the 10-year note rising 8 basis points to 4.34%.
This week we'll get quarterly earnings reports from market darling Nvidia (NVDA) Wednesday afternoon, as well as more results from retailers, including Lowe's (LOW) on Tuesday and Dollar Tree (DLTR) on Thursday. Other big names reporting this week include Baidu Inc. (BIDU), Snowflake Inc. (SNOW), Autodesk (ADSK), and Intuit Inc. (INTU).
Dow's Rally Can't Overcome Early Morning Losses 1 hr 6 min agoThe Dow Jones Industrial Average rallied to recover some of the morning's losses, but it wasn't enough to end the session in the green. The Dow started the week down 0.1%, or 36 points, after being down more than 250 points midday.
Tech stocks dominated the Dow, despite Treasury yields moving higher. Salesforce (CRM) shares jumped 2% while Microsoft (MSFT) gained nearly 1.7%. Intel (INTC) rose 1.2%, Apple (AAPL) gained 0.8%, and Cisco Systems (CSCO) rose 0.7%. IBM (IBM) added 0.6%.
Johnson & Johnson (JNJ) shares plunged 3% after it said its offer to exchange J&J shares for shares of its recently spun-off consumer health products unit Kenvue (KVUE) was oversubscribed. Johnson & Johnson will only exchange 24% of the J&J shares that were tendered and will retain a 9.5% stake in Kenvue.
Nike (NKE) fell 1.9% ahead of Foot Locker's (FL) earnings report on Wednesday after analysts warned that the show retailer would likely reveal soft sales of Nike footwear.
Goldman Sachs (GS) fell 1% after reports it may be looking to sell its $29 billion investment advisory business, as the investment bank continues to step back from the "Main Street" consumer market. It is already in the process of selling its GreenSky fintech unit and, in July, offloaded $1 billion of personal loans from its consumer banking brand Marcus.
-Terry Lane
Permian Resources to Acquire Earthstone Energy 1 hr 48 min agoShares of Earthstone Energy Inc. (ESTE) gained almost 17% after Permian Resources (PR), an oil and gas company, offered to buy the firm for $4.5 billion in an all-stock transaction.
As part of the transaction, each share of Earthstone common stock will be exchanged for 1.446 shares of Permian Resources common stock.
"We believe the acquisition of Earthstone represents a compelling value proposition for our shareholders and strengthens our position as a premier Delaware Basin independent E&P," said Permian co-CEO Will Hickley.
Permian Resources shares gained more than 3% Monday.
Crypto Keeps Sliding After Last Week's 2 hr 44 min agoCryptocurrencies continued to lose ground Monday, with Bitcoin hovering around $26,000 after trading yesterday around $26,300. Ethereum was down a bit over 1% from yesterday at $1,665. Ripple sank 4% from yesterday to 52 cents.
Bitcoin is down about 10% in the last five days after plummeting Thursday afternoon amid a massive liquidation of leveraged long positions. It was the cryptocurrency's worst week since the cryptocurrency exchange FTX collapsed in November.
Midday Market Movers 3 hr 35 min agoNovavax Inc. (NVAX): Shares of the biotech company gained 16% after a Biden administration official said Sunday the White House would urge all U.S. Residents to receive Covid-19 booster shots as new subvariants spread ahead of flu season. Shares of other Covid-19 vaccine makers Moderna (MRNA) and BioNTech SE (BNTX) advanced 9% and 6%, respectively.
Nvidia Corp. (NVDA): Shares rose 6% after HSBC, KeyBanc, and BMO Capital Markets all raised their price targets for the chipmaker ahead of its quarterly earnings report Wednesday. Nvidia stock jumped 24% the day after its last earnings report in May when it said sales for the most recent quarter would total $11 billion, 50% more than analysts had forecast.
Tesla Inc. (TSLA): Shares of the electric vehicle maker gained 6%, rebounding from a month-long sell-off during which the stock lost more than a quarter of its value.
Goldman Sachs Group (GS): Shares of the investment bank fell more than 1% after reports it was considering selling its investment advisory business as it retreats from its push into consumer banking.
Johnson & Johnson (JNJ): Shares fell 2% after the company announced it would be able to convert just 24% of the J&J shares investors opted to exchange for an equivalent stake in Kenvue (KVUE), its recently spun-off consumer healthcare unit. Kenvue stock gained over 1%.
Napco Shares Tumble After Disclosing Accounting Errors in Earnings Reports 4 hr 15 min agoShares of security firm Napco (NSSC) lost more than 40% of their value in Monday trading after the company said accounting errors would require the restatement of its last three quarters of earnings.
"The company has determined that a material weakness existed in the company's internal controls over financial reporting," Napco management said in a news release Friday.
Napco said it was revising its net sales lower in the first, second, and third quarters of fiscal 2023 by a total of $9.5 million. Monday's slump in the company's stock price means that it is now down 17% year-to-date.
-Kevin George
DuPont Agrees to Sell $1.8 Billion Resins Unit to Jordan Co. 4 hr 35 min agoMaterials manufacturer DuPont de Nemours Inc. (DD) has agreed to sell its 80.1% controlling stake in Delrin to private equity firm The Jordan Company in a deal valued at $1.8 billion.
In addition to the cash proceeds of approximately $1.25 billion, DuPont, as part of its strategy to refocus its business, will also receive a note receivable of $350 million and hold a 19.9% non-controlling equity interest in Delrin following the deal's closing.
"Today's announcement largely completes our planned exit of the former M&M segment, advancing our position as a premier multi-industrial company," said Ed Breen, DuPont Executive Chairman and Chief Executive Officer, in a statement.
-Kathleen Marshall
Broadcom's $69 Billion Acquisition of VMware Approved by UK Regulators 5 hr 33 min agoU.K. Regulators gave the green light for Broadcom's (AVGO) $69 billion purchase of VMware (VMW) on Monday, sending shares of both companies higher in early trading.
The U.K.'s Competition and Markets Authority (CMA) on Monday cleared Broadcom's $69 billion acquisition of Palo Alto, CA-based cloud computing company VMware, concluding a two-phase investigation that began in March. An independent panel of regulators ruled that the merger would not stifle competition in the supply of server hardware components in the U.K.
The deal, first announced in May of last year and initially valued at $61 billion, cleared one of its biggest regulatory hurdles this week. Regulators in the European Union (EU), Australia, Canada, Brazil, Israel, South Africa, and Taiwan have already cleared the deal, with the U.S. And China now the last remaining hurdles.
-Mack Wilowski
Marsh to Acquire Australian Company in $448 Million Deal 6 hr 22 min agoU.S. Insurance broker Marsh, a unit of Marsh & McLennan (MMC), announced Sunday that it would acquire Australia's Honan Insurance Group, including the 80% holding of majority shareholder TA Associates (TA), a leading global private equity firm.
The deal could be worth up to $448.70 million once finalized.
"The addition of Honan's highly complementary capabilities, particularly in corporate risk and strata insurance, will enable Marsh to deepen the specialist expertise we provide to clients across Australia and New Zealand, and support them in managing the risks they now face," Nick Harris, Marsh's CEO of Pacific said in a statement.
-Kathleen Marshall
Cybersecurity Stocks Get a Boost from Palo Alto Networks 7 hr 9 min agoShares of cybersecurity firms are rising across the board Monday after Palo Alto Networks (PANW) reported better-than-expected results for its fiscal fourth quarter ended July 31.
Revenue grew 26% year-over-year to $2 billion while adjusted net income nearly doubled to $482.5 million, or $1.44 a share. The company forecast full-year billings of between $10.9 and $11 billion, above Wall Street's estimate of $10.8 billion.
Palo Alto Networks stock jumped 15% Monday morning along with other cybersecurity stocks ZScaler Inc. (ZS), up 6%, and Crowdstrike Holdings (CRWD), up 5%.
The First Trust NASDAQ Cybersecurity ETF (CIBR) gained more than 2% but remained 6% below its highest point this year.
Meta's Threads to Hit the Web 7 hr 33 min agoShares of Meta Platforms (META) gained 1% early Monday after reports that the company's Twitter competitor, Threads, would be getting a web version, possibly as early as the first half of this week.
Currently, the mobile-geared platform is only available through an app.
Threads became the fastest app to reach 100 million downloads when it launched in early July. User engagement has since fallen off a cliff, dropping more than 80% by the end of July.
Stocks Making the Biggest Moves Premarket 8 hr 27 min agoGainers:
Losers:
Here's what investors need to know to start their day:
-Terry Lane
Stock Futures Show Equities Staging a Recovery 9 hr 17 min agoFutures contracts tied to the Dow Jones Industrial Average gained 0.4% in early trading Monday.
S&P 500 futures were up 0.5%.
Nasdaq 100 futures contracts gained 0.7%.
Tech's Broken Promises: Streaming Is Now Just As Expensive And Confusing As Cable. Ubers Cost As Much As Taxis. And The Cloud Is No Longer Cheap.
Jim Carrey in a scene from the film 'The Cable Guy', 1996. Columbia Pictures/Getty Images
The tech industry has been on a quest for profitability lately.
To get there, some tech companies have been raising prices.
The result: Supposedly revolutionary services are looking a lot like what came before.
Sooner or later, everything old is new again.
We may be at this point in tech, where supposedly revolutionary products are becoming eerily similar to the previous offerings they were supposed to beat.
Take video streaming. In search of better profitability, Netflix, Disney, and other providers have been raising prices. The various bundles are now as annoyingly confusing as cable, and cost basically the same. Somehow, we're also paying to watch ads. How did that happen?
Amazon Prime Video costs $9 a month and there are no ads. Oh, except when Thursday Night Football is on. Then there are loads of ads. And Amazon is discussing an ad-supported version of the Prime Video service, according to The Wall Street Journal. That won't be free, I can assure you.
Paramount+ with Showtime costs $12 a month and the live TV part has commercials and a few other shows include "brief promotional interruptions," according to the company. Translation: ads.
Streaming was supposed to be better and cheaper. I'm not sure that's the case anymore. This NFL season, like previous years, I will record games on OTA linear TV using a TiVo box from about 2014. I'll watch hours of action every weekend for free and I'll watch no ads. Streaming can't match that.
You can still stream without ads, but the cost of this is getting so high, and the bundling is so complex, that it's getting as bad as cable — the technology that streaming was supposed to radically improve upon.
The Financial Times recently reported that a basket of the top US streaming services will cost $87 this fall, compared with $73 a year ago. The average cable TV package costs $83 a month, it noted.
A 3-mile Uber ride that cost $51.69A similar shift is happening in ride-hailing. Uber has been on a quest to become profitable, and it achieved that, based on one measure, in the most-recent quarter. Lyft is desperately trying to keep up. How are they doing this? Raising prices is one way.
Wired's editor at large, Steven Levy, recently took a 2.95-mile Uber ride from downtown New York City to the West Side to meet Uber CEO Dara Khosrowshahi. When asked to estimate the cost of the ride, Khosrowshahi put it at $20. That turned out to be less than half the actual price of $51.69, including a tip for the driver.
"Oh my God. Wow," the CEO said upon learning the cost.
I recently took a Lyft from Seattle-Tacoma International airport to a home in the city. It cost $66.69 with driver tip. As a test, I ordered a taxi for the return journey. Exact same distance, and the cab was stuck in traffic longer. The cost was $70 with a tip. So basically the same.
And the cab can be ordered with an app now that shows its location, just like Uber and Lyft. So what's the revolutionary benefit here? The original vision was car sharing where anyone could pick anyone else up. Those disruptive benefits have steadily ebbed away through regulation, disputes with drivers over pay, and the recent push for profitability.
Cloud promises are being brokenFinally, there's the cloud, which promised cheaper and more secure computing for companies. There are massive benefits from flexibility here: You can switch your rented computing power on and off quickly depending on your needs. That's a real advance.
The other main benefits — price and security — are looking shakier lately.
Salesforce, the leading provider of cloud marketing software, is increasing prices this month. The cost of the Microsoft 365 cloud productivity suite is rising, too, along with some Slack and Adobe cloud offerings, according to CIO magazine.
AWS is going to start charging customers for an IPv4 address, a crucial internet protocol. Even before this decision, AWS costs had become a major issue in corporate board rooms.
As a fast-growing startup, Snap bought into the cloud and decided not to build it's own infrastructure. In the roughly five years since going public, the company has spent about $3 billion on cloud services from Google and AWS. These costs have been the second-biggest expense at Snap, behind employees.
"While cloud clearly delivers on its promise early on in a company's journey, the pressure it puts on margins can start to outweigh the benefits, as a company scales and growth slows," VC firm Andreessen Horowitz wrote in a blog. "There is a growing awareness of the long-term cost implications of cloud."
Some companies, such as Dropbox, have even repatriated most of their IT workloads from the public cloud, saving millions of dollars, the VC firm noted.
What about security? Last month, Google, the third-largest cloud provider, started a pilot program where thousands of its employees are limited to using work computers that are not connected to the internet, according to CNBC.
The reason: Google is trying to reduce the risk of cyberattacks. If staff have computers disconnected from the internet, hackers can't compromise these devices and gain access to sensitive user data and software code, CNBC reported.
So, cloud services connected to the internet are great for everyone, except Google? Not a great cloud sales pitch.
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PayPal Approached Top Tech Execs In Search For New CEO
In PayPal's search for a new chief executive, the financial-tech company approached Uber CEO Dara Khosrowshahi and Nextdoor CEO Sarah Friar, according to people familiar with the matter.
Khosrowshahi wasn't interested, according to a person familiar with his thinking.
The company announced in February that Dan Schulman would be retiring from PayPal after nine years at the helm. No successor was named at the time. "I'm at a point in my life where I want to devote more time to my passions outside the workplace," Schulman said in a statement then.
