Wall Street stumbled to a close Thursday, ending nearly flat after an earlier rally ran out of steam late in the session as investors continued to parse the Federal Reserve's hawkish outlook.
Benchmark U.S. Treasury yields hit their highest level since May, crude prices dipped and gold advanced as investors grew accustomed to the reality that the central bank will take a slower, more measured approach to policy easing in the coming year.
Market Snapshot
The Dow Jones Industrial Average rose 15.37 points, or 0.04%, to 42,342.24, the S&P 500 fell 5.08 points, or 0.09%, to 5,867.08 and the Nasdaq Composite fell 19.93 points, or 0.10%, to 19,372.77.
Market Movers
Micron Technology reported fiscal first-quarter adjusted earnings that beat analysts' estimates but a weak outlook for the company's current second quarter sent the stock down 16%. The largest U.S. maker of memory chips said it expects fiscal second-quarter adjusted earnings of between $1.33 and $1.53 a share on revenue between $7.7 billion and $8.1 billion. Analysts had been expecting adjusted earnings of $1.91 a share on revenue of $8.94 billion. "While consumer-oriented markets are weaker in the near term, we anticipate a return to growth in the second half of our fiscal year," said Chief Executive Sanjay Mehrotra. Fellow chip maker Western Digital fell 6.2%; it was downgraded to Hold from Buy by analysts at Benchmark.
Tesla fell 0.9% after the stock tumbled 8% on Wednesday following the Fed's projections of fewer rate cuts next year. Even with the decline, coming into Thursday the stock remained up 75% since Election Day on Nov. 5, and up 76% for the year.
Shares of Lennar fell 5.2% after the home builder posted fiscal fourth-quarter earnings and revenue that fell from a year earlier, with c0-CEO Stuart Miller citing higher mortgage rates. "Even while demand remained strong, and the chronic supply shortage continued to drive the market, our results were driven by affordability limitations from higher interest rates," Miller said. Deliveries in the period declined 7% to 22,206 homes, and new orders fell 3% to 16,895 homes.
Quantum Computing was down 41%, a day after shares of the integrated photonics and quantum-optics technology surged 53%, boosting the stock's gain for the year to more than 2,700%. Earlier this week, Quantum Computing said it received a contract with NASA that would help support the agency's "advanced imaging and data processing demands." D-Wave Quantum plummeted 29%.
Palantir Technologies rose 3.8% to $74.25 after the software company extended a partnership with the U.S. Army under a contract worth up to nearly $619 million over four years. The new agreement, Palantir said, "will operationalize data across the entire Department of the Army." Separately, UBS initiated coverage of the stock with a Neutral rating and price target of $80.
Accenture rose 7%. The professional services company reported fiscal first-quarter earnings that were better than expected and boosted its fiscal-year revenue outlook. During Accenture's earnings call, CEO Julie Spellman Sweet stressed that generative artificial intelligence was a strong driver of growth in the quarter.
CarMax shares rose 3.4% after the used-car retailer reported third-quarter earnings that beat Wall Street estimates.
Lamb Weston was down 20% after the potato supplier to restaurants reported a surprise fiscal second-quarter loss, reduced its fiscal-year sales outlook, and said CEO Thomas Werner would be stepping down. Werner will be replaced by Michael Smith, the company's chief operating officer. Lamb Weston has been pressured by activist shareholder Jana Partners to pursue a sale.
Darden Restaurants jumped 15% after the restaurant operator raised its fiscal-year sales guidance. The company said it expects sales of $12.1 billion, higher than its previous outlook of between $11.8 billion and $11.9 billion. In its fiscal second quarter, Darden topped earnings and sales expectations. Same-restaurant sales at LongHorn Steakhouse rose 7.5% in the quarter.
Vertex Pharmaceuticals slumped 11% after the company's new non-opioid pain pill performed no better than a placebo in patients with chronic nerve pain. Vertex, however, told investors it still was moving the drug into a costly late-stage trial.
Worthington Steel declined 14% after fiscal second-quarter revenue fell 9% to $739 million from $808 million a year earlier. The metals processor said the revenue decrease was driven primarily by lower volumes and direct selling prices.
Shares of shipping giant FedEx soared late Thursday after its earnings report delivered what investors wanted -- a spinout of a division. The company said Thursday evening that it would separate its freight business, leaving two publicly traded companies -- as investors had hoped. FedEx stock jumped 8.6% to $299.71 in after-hours trading.
Nike's results beat modest estimates on Thursday and its shares jumped briefly, but the company soon dashed investor hopes and sent shares lower when a top executive predicted revenues would fall by double digits in the third quarter. Shares of the footwear and apparel company were up 0.73% in after hours trading.
Market News
Dealmakers eye $4 trillion-plus M&A haul in 2025 on Trump boost
Bankers expect global deal volumes to surpass $4 trillion next year, the highest in four years, buoyed by U.S. President-elect Donald Trump's promise of less regulation, lower corporate taxes and a broadly pro-business stance.
The total value of mergers and acquisitions (M&A) rose 15% from last year to total $3.45 trillion as of Dec. 19 this year, according to Dealogic data, recovering from a decade-low of about $3 trillion during the same period last year.
U.S. Steel forecasts fourth-quarter surprise loss, shares fall
United States Steel on Thursday forecast a surprise loss for the fourth quarter, sending its shares down nearly 5% in aftermarket trading.
The company expects an adjusted loss of between 29 cents and 25 cents for the quarter, compared with analysts' average estimate of a profit of 16 cents, according to data compiled by LSEG.
U.S. Steel projected its fourth-quarter adjusted core profit to be about $150 million, which is below its prior forecast of $225 million to $275 million.
