U.S. stocks closed higher on Tuesday following positive earnings from top-tier companies and as investors were focused on quarterly results from Magnificent Seven and other megacap growth stocks.
Tesla kicked off the earnings cycle for technology heavyweights after markets closed on Tuesday, announcing the launch of new electric vehicle models and quarterly revenue that missed analyst estimates. Its shares jumped over 13% in extended hours trading.
Market Snapshot
The Dow Jones Industrial Average rose 263.71 points, or 0.69%, to 38,503.69, the S&P 500 rose 59.95 points, or 1.20%, to 5,070.55 and the Nasdaq Composite rose 245.33 points, or 1.59%, to 15,696.64.
Market Movers
General Motors topped Wall Street’s first-quarter sales and earnings estimates, and the auto maker raised full-year financial guidance while maintaining its commitment to more battery-electric vehicle sales. The stock jumped 4.4%.
GE Aerospace reported first-quarter earnings of 82 cents a share; analysts were expecting 65 cents. The period included results from GE Vernova, which was spun off on April 2. The company raised its 2024 operating profit outlook to $6.2 billion to $6.6 billion from prior guidance of $6 billion to $6.5 billion. Shares were up 8.3%.
Texas Instruments Inc. gave a bullish revenue forecast for the current quarter, indicating that a slump in demand for industrial and automotive components may be easing. Texas Instruments shares rose more than 7% in extended trading following the announcement.
Visa Inc. reported a quarterly profit that beat Wall Street predictions as US credit-card spending climbed. Shares of San Francisco-based Visa rose 2.15% to $280.01 in extended trading in New York.
United Parcel Service reported first-quarter adjusted earnings of $1.43 a share, topping analysts’ estimates of $1.28. Revenue of $21.7 billion missed expectations of $21.8 billion. Shipping volume fell 3.2% in the U.S. The shipping giant reaffirmed its 2024 revenue estimate of $92 billion to $94.5 billion. The stock was rising 2.4%.
Spotify Technology swung to a profit in the first quarter and shares of the audio streaming giant jumped 11%. Monthly active users rose 19% in the first quarter to 615 million, 3 million below expectations.
JetBlue Airways declined 19%. The carrier reported a narrower-than-expected first-quarter loss but said revenue in the second quarter would fall between 6.5% and 10.5% year over year, wider than the 3.7% drop estimated by analysts.
PepsiCo posted first-quarter adjusted earnings of $1.61 a share, higher than Wall Street estimates of $1.52. Shares of the beverages and snacks maker, however, were down 2.9%.
Xerox tumbled 10% after the copier maker posted a first-quarter loss of 94 cents a share, a reversal from year-earlier profit of 43 cents. On an adjusted basis, earnings were 6 cents a share, below analysts’ estimates of 35 cents.
Danaher was up 7.2% after the life-sciences company easily beat quarterly earnings and sales estimates. For its second quarter, Danaher expects adjusted core revenue will decline by mid-single digits year over year; for the full year, it expects revenue down by low-single digits.
Nucor posted first-quarter earnings that fell from a year earlier and the steel maker said it expects second-quarter profit to fall on a sequential basis because of decreased earnings from its steel mills segment. The stock fell 8.9%.
Cleveland-Cliffs was down 11% after reporting first-quarter adjusted earnings of 18 cents a share on revenue of $5.2 billion. Wall Street expected earnings of 22 cents a share on sales of $5.3 billion. “Our first-quarter results were highlighted by the resiliency of automotive production in the United States, which helped to offset a temporary buyers strike from service centers in January and February,” said CEO and President Lourenco Goncalves. Cleveland-Cliffs also said its board authorized a new stock buyback program up to $1.5 billion.
Market News
Tesla Could Start Selling Optimus Robots By the End of Next Year
Tesla's humanoid robot is still in the lab, but it may be ready to sell as soon as the end of next year, chief executive Elon Musk said on Tuesday.
Several companies have been betting on humanoid robots to meet potential labor shortages and perform repetitive tasks that could be dangerous or tedious in industries such as logistics, warehousing, retail and manufacturing.
Musk told investors on a conference call that he guessed the Tesla robot, called Optimus, would be able to perform tasks in the factory by the end of this year.
Apple's Q1 Smartphone Shipments in China Tumble 19%
Apple's smartphone shipments in China tumbled 19% in the first quarter of the year, the worst performance since 2020, as the iPhone maker took a hit from Huawei's new product launches in the premium segment, market data showed.
Apple's share in the world's biggest smartphone market fell to 15.7% in the first quarter from 19.7% a year earlier. That put it almost level with Huawei, which saw sales jump 70%, according to research firm Counterpoint.
IBM nearing deal for cloud software provider HashiCorp
International Business Machines is nearing a deal to buy cloud software provider HashiCorp , according to a person familiar with the matter.
Hashicorp's stock surged 18.74%, giving it a market value of $5.82 billion, after the Wall Street Journal first reported the talks.
Under CEO Arvind Krishna, IBM has focused on acquisitions to build out its cloud offerings. The boom in generative artificial intelligence has increased the attractiveness of cloud software as it helps process vast amounts of data.
