Stocks fluctuate after key data with Micron falling

US stocks were little changed on Thursday after chipmaker Micron’s (MU) forecast dampened tech rally hopes as investors weighed new economic data ahead of the Federal Reserve’s key inflation reading.

The S&P 500 (^GSPC) embraced the flat line after rising on Wednesday to close near a new all-time high. The Dow Jones Industrial Average (^DJI) rose 0.2%, while the Nasdaq Composite (^IXIC) rose slightly.

Shares are struggling in the wake of Micron’s current-quarter sales forecast, which met expectations but failed to please investors looking for stellar outperformance from AI-related companies.

The bullish trend around artificial intelligence has helped lift the S&P 500 to a 15% gain this year. But concerns are growing that the rally could be in jeopardy if the group of technology companies driving most of these gains stops beating already high expectations.

Shares of memory maker Micron fell more than 4% in early trading. Nvidia (NVDA) stock fell more than 1%, reviving fears of a return to the sell-off that rocked markets last week.

Investors were weighing a new batch of economic data ahead of Friday’s PCE inflation reading that will influence the Federal Reserve’s thinking on the timing of interest rate cuts.

The initial weekly jobless claims reading came in at 233,000, down 6,000 from the previous week. according to Ministry of Labor data. The printing came in below the consensus forecast of 235,000. But recurring unemployment claims rose to their highest levels since late 2021, suggesting that the unemployed are taking longer to find a job.

Real GDP growth at an annual rate of 1.4% in the first quarter of 2024 Third estimate The Bureau of Economic Development released US economic growth data on Thursday morning. The reading was slightly higher than the previous estimate of 1.3%.

Inflation could also loom large in the first debate between President Joe Biden and former President Donald Trump on Thursday night.

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On the institutional front, shares of Levi Strauss (LEVI) fell by more than 15% following its failure to achieve revenue in the second quarter of the year for the jeans company. Investors will look to Nike’s (NKE) quarterly results after the bell for more evidence of consumer resilience.

He lives5 updates

  • Pending home sales decline in May

    Rising home prices and higher mortgages keep potential buyers away from the housing market.

    Pending home sales — a forward-looking indicator of home sales based on contracts being signed — fell 2.1% in May from the previous month, according to data from the National Association of Realtors. Data released on Thursday showed that it fell year-on-year by 6.6%.

    The Midwest and South region reported a decline in contract signings in May compared to the previous month. The Northeast and West regions recorded gains. All regions across the country recorded losses in activity on an annual basis.

    “The market is in an interesting phase with rising inventory and falling demand,” Lawrence Yun, chief economist at NAR, said in a statement. “Supply and demand movements point to a decline in home price appreciation in the coming months. More inventory in the economy that creates jobs is bound to lead to increased home buying, especially when mortgage rates decline.

    Mortgage rates are at their lowest average in three months, but that is still not enough to attract buyers. About 95% of mortgage borrowers have interest rates below current market rates, and about 80% have interest rates that are less than 2 percentage points below market rates, according to Goldman Sachs data.

    Looking ahead, Yoon expects “moderately lower mortgage rates, higher home sales, and stable home prices.”

  • Walgreens declines 24% with lower guidance due to ‘challenging’ pharmacy trends and consumer weakness

    Walgreens stock fell 24% to its lowest level since 1997 after the drugstore chain cut its earnings guidance for fiscal 2024, citing “challenging pharmacy industry trends and a worse-than-expected U.S. consumer environment.”

    “Our customers have become increasingly selective and price-sensitive in their purchases,” Tim Wentworth, CEO of Walgreens Boots Alliance, said during the company’s earnings call Thursday morning.

    Management indicated that 25% of the company’s stores are not currently contributing to the long-term strategy, and that “changes are imminent.”

    Walgreens said it plans to close a “significant portion” of its underperforming stores over the next three years.

    It expects adjusted earnings per share for the year to be between $2.80 and $2.95, down from its previous forecast of $3.20 to $3.35.

  • Netflix and Meta are helping push the Nasdaq into the green

    Telecom stocks boosted the Nasdaq Composite Index (^IXIC) into positive territory with a 0.3% rise shortly after the market opened on Thursday.

    Netflix (NFLX) and Meta (META) both advanced more than 1%, helping lift a tech-heavy gauge that had dipped just below the flat line.

    The S&P 500 (^GSPC) rose 0.2% while the Dow Jones Industrial Average (^DJI) was little changed.

    Meanwhile, shares of chip giant Nvidia (NVDA) fell slightly after Micron (MU) sales forecasts failed to galvanize investors about the artificial intelligence craze that has fueled the broader market rally this year.

  • Stocks swing at open as investors weigh economic data, Micron puts cap on tech rally

    Stocks opened slightly lower on Thursday as investors weighed economic data released before the bell.

    The S&P 500 (^GSPC) was little changed, while the Dow Jones Industrial Average (^DJI) fell 0.1%. The Nasdaq Composite (^IXIC) fell just below the flat line.

    Real GDP growth at an annual rate of 1.4% in the first quarter of 2024 Third estimate It was issued by the Office of Economic Development Thursday morning. The reading was slightly higher than the previous reading of 1.3% but still showed the slowest growth since 2022.

    The initial weekly unemployment claims reading came in at 233,000, a decrease of 6,000 from the previous week. according to Ministry of Labor data.

    On the corporate front, chipmaker Micron (MU)’s current-quarter sales forecast met expectations but failed to please investors looking for a stellar outperformance from AI-related companies. The stock fell about 4% in early trading. AI chip giant Nvidia (NVDA) also fell about 1% at the open.

  • Why does Levi’s neighborhood bother me?

    Levi’s ( LEVI ) shares were down 15% in the pre-market after earnings.

    I think it’s worth it for two reasons.

    First, sales in China fell by 10% from the previous year. I recently spoke with a large number of people who recently visited China. One theme is that Chinese consumers are feeling the gloomy side and are not spending as much as in years past. This mood is impacting demand for Levi’s jeans, Starbucks (SBUX) coffee, and — according to General Mills’ (GIS) earnings call yesterday — Häagen-Dazs ice cream.

    It is difficult to see the turning point in China.

    The same goes for Levi’s wholesale business, or the business that sells to department stores. Sales were down 4% from a year earlier. The company’s comment suggests that wholesale demand may not last until 2025.

    I plan to raise some of my concerns with Levi CFO Harmit Singh today at 10:30 AM ET on Yahoo Finance. Discipline!

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