Markets News, May 3, 2024: Stocks End Higher After Benign Jobs Data; Major Indexes Post 2nd Straight Week of Gains

S&P 500 Movers Today

May 03, 2024 06:19 PM EDT

GAINS

Amgen led the S&P 500 higher, gaining 11.8% amid optimism about its experimental weight-loss drug MariTide and strong earnings.

GE Vernova, (GEV), the energy company that completed its separation last month from the General Electric conglomerate, added 8.1%.

Enphase Energy (ENPH) shares gained 7.7%, reversing a portion of the losses posted last week after the solar technology firm reported soft quarterly results and issued underwhelming guidance.

Live Nation Entertainment (LYV) shares advanced 7.2% after the event promotion and ticketing firm posted better-than-expected first-quarter revenue.

LOSSES

Expedia Group (EXPE) shares posted the heaviest losses among S&P 500 stocks, plunging 15.3% after the travel booking provider lowered its full-year guidance.

Fortinet (FTNT) topped first-quarter revenue and earnings estimates, but the cybersecurity firm’s billings dropped from the year-ago period and fell short of forecasts. That sent shares of the company tumbling 9.7%.

Paramount Global (PARA) shares fell 7.0% amid reports that exclusive merger talks with production company Skydance Media have stalled.

Trimble (TRMB) shares dropped 7.0% after the provider of GPS software and analytics issued lower-than-expected sales and profit guidance for the current quarter.

–Michael Bromberg

Why Investors Cheered April’s Hiring Slowdown

May 03, 2024 03:53 PM EDT

News that employers added fewer jobs than expected in April sent stocks sharply higher amid investor optimism that a long-awaited cooling of the economy could be on the horizon and prompt the Federal Reserve to cut interest rates.

Friday’s report marked the first time in four months the job data undershot expectations, and it indicates the Federal Reserve’s campaign of interest rate hikes, intended to combat inflation, is dragging on the economy. 

While the 175,000 number of jobs added was far lower than analysts expected, the number wasn’t especially low by historical standards, which means investors could rest easy with data that wasn’t too hot or too cold.

Economists have long anticipated a downshift in the economy, but it has been slow to arrive partly because consumers have accelerated spending despite high prices and interest rates pressuring household budgets. 

The labor market slowdown worsens the outlook for job seekers but could boost financial markets and provide respite for consumers because of its implications for inflation and interest rates. Slower hiring and wage growth could take upward pressure off price increases, and encourage Fed officials to lower the fed funds rate.

–Diccon Hyatt

Apple’s Blockbuster Buyback Program

May 03, 2024 02:34 PM EDT

Apple inc. (AAPL)’s $110 billion stock buyback announcement is the largest stock buyback program in recent history, beating its own record set in 2018.

Such is Apple’s dominance in terms of share repurchases that no other U.S. company has broken into the top five, and it ties with Chevron (CVX) for the sixth spot, according to data compiled by Birinyi Associates.

Share repurchases for tech rivals don’t even compare. Meta Platforms’ (META) highest is $50 billion from earlier this year, while Google-parent Alphabet’s (GOOGL) peaks at $70 billion announced last week. Microsoft’s (MSFT) $60 billion share buyback announced in 2021 was its largest.

–Mrnalini Krisna

What To Know Ahead of Berkshire Meeting Saturday

May 03, 2024 01:32 PM EDT

Warren Buffett, the legendary Oracle of Omaha, will take the stage to answer questions at Berkshire Hathaway’s (BRK.A, BRK.B) annual meeting tomorrow soon after the company reports its first-quarter earnings.

It’s the first such event since the death of Buffett’s long-time business partner Charlie Munger, which will put Vice Chairmen Greg Abel and Ajit Jain in the spotlight, with investors looking for details about succession planning and ways the company may be preparing for life after its two most successful leaders.

In light of Munger’s passing and Buffett’s own age of 93, investors will seek more details about Berkshire’s succession plans at the annual meeting.

And it’s not only about the next person in the corner office. Buffett and Munger were known not just for their business savvy but their partnership. With a company as broad, diversified, and decentralized as Berkshire, it will be interesting to see how the next generation of leaders will live up to the legacy of that camaraderie.

Investors will also be on the lookout for any indications about how Buffett is thinking about Berkshire’s investments. One of the biggest questions has been the mystery stock that the company acquired sometime late last year but has requested the U.S. Securities and Exchange Commission (SEC) for permission to keep confidential.

Investopedia will be live blogging from tomorrow’s event in Omaha.

Analysts Highlight Potential Growth Catalysts for Apple

May 03, 2024 10:55 AM EDT

Apple shares were up more than 6% in mid-morning trading after reporting second-quarter results above expectations and announcing a $110 billion share buyback program, in what Citi analysts called a “relief rally.”

CFRA analysts noted that they “believe these results appear to change the narrative on the AAPL story, as China is holding up better than expected and there are a host of upcoming events/catalysts on the horizon that could improve investor sentiment and drive consensus estimates higher.”

J.P. Morgan analysts noted that Apple’s results and guidance show “resilient iPhone revenues on a year-over-year basis” which is “combining with the expectations of an upgrade cycle-led tailwind in iPads (helped by the launch event next week).”

Analysts also highlighted Apple’s AI announcement as a major catalyst. CEO Time Cook indicated that Apple is “bullish” on its opportunities around generative AI. 

Wedbush analysts said that the earnings report was “the drumroll moment as Apple is set to unveil its long awaited AI strategy to its golden installed base and developer community at WWDC in June, which begins an AI driven supercycle starting with iPhone 16 this Fall.”

–Naomi Buchanan

Amgen Stock Surges on Weight-Loss Drug Update

May 03, 2024 09:50 AM EDT

Amgen (AMGN) shares soared in early trading Friday after the biopharmaceutical giant posted quarterly earnings that came in ahead of Wall Street expectations and provided a positive update about trials of its injectable weight-loss drug MariTide.

The stock was up 12.5% at $313.06 about 15 minutes after the opening bell, accounting for a significant portion of the Dow’s early gains.

The company announced it would give up pursuit of an oral weight-loss pill AMG786, instead focusing its resources on the development of its highly anticipated injectable MariTide. CEO Robert Bradway told analysts on the company’s earnings call that the drugmaker had completed interim analysis of the phase two study and were very encouraged with the results so far.

The company said it expects more complete data from MariTide’s phase two studies toward the end of the year, adding that plans for a comprehensive phase three program remain on schedule. If approved, Amgen aims to offer MariTide via a convenient, auto-injector device at a monthly or less frequent intervals.

MariTide could compete with highly successful weight-loss drugs Ozempic, Wegovy, and Zepbound manufactured by pharmaceutical giants Novo Nordisk (NVO) and Eli Lilly (LLY) in a market some analysts see reaching $100 billion by 2030.

Investors should keep an eye on the $330 level, an area where the stock may encounter overhead resistance from its all-time high (ATH) set in early February. A convincing breakout above this closely-watched level would likely see the stock’s longer-term uptrend continue.

–Timothy Smith

Stock Futures Rise Ahead of Jobs Report

May 03, 2024 08:28 AM EDT

Futures contracts connected to the Dow Jones Industrial Average were up 0.7% in premarket trading Friday.

S&P 500 futures were up 0.4%.

Nasdaq 100 futures were up 0.6% minutes ahead of the jobs data.