U.S. stocks ended sharply higher on Tuesday, with the S&P 500 registering a record high close as Oracle shares surged and consumer price data failed to dampen investors' hopes of interest rate cuts in the coming months.
Market Snapshot
The Dow Jones Industrial Average rose 235.74 points, or 0.61%, to 39,005.4. The S&P 500 gained 57.3 points, or 1.12%, at 5,175.24 and the Nasdaq Composite added 246.36 points, or 1.54%, at 16,265.64.
Market Movers
Nvidia (NVDA) - Nvidia rose 7.2%. The strong market for the company’s graphics-processing units was emphasized in Oracle’s earnings report. Oracle recently signed a new cloud-computing infrastructure deal with Nvidia and said it plans to boost capital spending in the next fiscal year, suggesting sustained demand for AI chips.
Oracle (ORCL) - Oracle reported fiscal third-quarter adjusted earnings of $1.41 a share as revenue rose 7% to $13.28 billion. Analysts had been expecting the enterprise software company to post a profit in the period of $1.38 a share on revenue of $13.3 billion. The company’s cloud infrastructure business rose 49% to $1.8 billion. CEO Safra Catz said large new cloud infrastructure contracts signed during the quarter “drove Oracle’s total remaining performance obligations up 29% to over $80 billion—an all-time record.” Oracle said it expects cloud revenue to rise as much as 24% in the fourth quarter. Oracle shares jumped 11.8%.
Southwest Airlines (LUV) - Southwest Airlines sank 14.9% after the carrier said it expects revenue per available seat mile in the first quarter at flat to up 2% from a year earlier, compared with previous expectations for growth of 2.5% to 4.5%. Southwest cited soft leisure travel trends. The company also said it was re-evaluating fiscal-year guidance because of lower expected deliveries of Boeing aircraft. Boeing was down 4.3% as details emerged regarding the Federal Aviation Administration’s six-week audit of the aerospace giant.
American Airlines (AAL) - American Airlines fell 4.7% after saying it expects an adjusted loss in the first quarter at the “low end” of its previous estimate for a loss of 15 cents to 35 cents a share because of higher fuel prices. Analysts had been expecting a loss of 22 cents.
3M (MMM) - 3M rose 5% after announcing that William Brown, the former chief executive of defense giant L3Harris Technologies, will succeed the industrial company’s current CEO Michael Roman on May 1. Roman will continue as executive chairman of 3M’s board.
Acadia Pharmaceuticals (ACAD) - Acadia Pharmaceuticals fell 17.2% after the company’s drug pimavanserin for the treatment of negative symptoms of schizophrenia didn’t demonstrate a statistically significant improvement over a placebo. “We will continue to analyze these data with our scientific advisors, but we do not intend to conduct any further clinical trials with pimavanserin,” said Acadia CEO Steve Davis.
Archer Daniels Midland (ADM) - Shares of Archer Daniels Midland rose 3.9% after the agricultural company said it expects fiscal-year adjusted earnings of $5.25 to $6.25 a share versus analysts’ estimates of $5.41, and its board authorized an additional $2 billion to its share buyback program. The company’s fourth-quarter earnings missed forecasts.
On Holding (ONON) - On Holding fell 8.9% after the Swiss footwear and apparel maker issued a sales forecast for the fiscal year that missed Wall Street estimates. The company said it expects sales of $2.57 billion, below analysts’ expectations of $2.64 billion. On Holding said “negative foreign exchange impacts are expected to be more pronounced” in the first half of the year.
Asana (ASAN) - Asana, the work management software company, reported a fiscal fourth-quarter loss of 4 cents a share, narrower than analysts’ expectations. Asana said it expects an adjusted loss in the first quarter of 8 cents to 9 cents a share, in line with estimates, and revenue of $168 million to $169 million, up 10% to 11% from a year earlier. The stock fell 12.7%.
New York Community Bancorp (NYCB) - New York Community Bancorp rose 5.9% after the regional lender said it was planning a reverse stock split after completing a deal that provided it with a $1.05 billion capital infusion from an investor group led by former Treasury Secretary Steven Mnuchin.
Kohl’s (KSS) - Kohl’s reported fourth-quarter earnings that beat analysts’ estimates but sales that missed. The shares fell 6.7%. The department-store company also announced a partnership with Babies “R” Us.
Advance Auto Parts (AAP) - Advance Auto Parts said it appointed three new directors to its board and reached cooperation agreements with activist investors Third Point and Saddle Point Management. Third Point has a stake in the auto parts retailer, The Wall Street Journal reported Monday. Dan Loeb’s Third Point approached Advance Auto Parts earlier this year with the primary goal of adding directors with experience in the industry to its board, the Journal said, citing people familiar with the matter. The stock was up 3.6%. It has declined 36% over the past 12 months.
Market News
US Core Inflation Tops Forecasts Again, Reinforcing Fed Caution
Underlying US inflation topped forecasts for a second month in February as prices jumped for used cars, air travel and clothes, reinforcing the Federal Reserve’s cautious approach to cutting interest rates.
The so-called core consumer price index, which excludes food and energy costs, increased 0.4% from January, according to government data out Tuesday. From a year ago, it advanced 3.8%.
Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.4% from January and 3.2% from a year ago, boosted by gasoline prices, Bureau of Labor Statistics figures showed.