Wall Street's three major stock indexes on Thursday registered record closing highs for the second day in a row after the Federal Reserve reassured investors about the prospects for rate cuts this year while chip stocks rallied after Micron Technology's upbeat forecast.
Market Snapshot
The Dow Jones Industrial Average rose 269.24 points, or 0.68% , to 39,781.37, the S&P 500 gained 16.91 points, or 0.32%, to 5,241.53 and the Nasdaq Composite gained 32.43 points, or 0.20%, to 16,401.84.
Market Movers
Reddit shares jumped 48% in their debut on Thursday in the first initial public offering for a major social media company since Pinterest
hit the market in 2019. The 19-year-old website that hosts millions of online forums priced its IPO on Wednesday at $34 a share, the top of the expected range. Reddit and selling shareholders raised about $750 million from the offering, with the company collecting about $519 million.
Apple fell 4.1% after the Department of Justice sued the tech giant, alleging the company has a monopoly over the mobile phone market. In a statement, Apple said the lawsuit “threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
Micron Technology surged 14% after the chip maker reported a surprise fiscal second-quarter profit. Micron earned 71 cents a share in the period, a swing from a year-earlier loss of $2.12. Adjusted earnings of 42 cents a share smashed analysts’ estimates that called for a loss of 25 cents.
The company’s forecasts for third-quarter adjusted earnings and revenue also were well above estimates. Micron expects revenue of $6.6 billion at the midpoint in the third quarter, higher than estimates of $5.98 billion. Shares of fellow memory-chip maker Western Digital jumped 5%.
Reddit, the popular news aggregation social media site, opened for trading Thursday at $47 a share, well above the initial public offering of $34. The stock closed around $50.44.
Astera Labs was up 3.4% on Thursday after shares of the company, which makes semiconductor-based connectivity products that are used to build cloud and AI infrastructure, soared 72% in their trading debut on Wednesday and closed at $62.03, well above the initial public offering price of $36.
Guess, the clothing, footwear, and accessories maker, rose 21% after posting better-than-expected fourth-quarter earnings and saying it expects fiscal 2025 revenue to increase in the range of 11.5% and 13.5%.
Five Below shares tumbled 15% after the discount retailer issued a fiscal-year forecast for earnings and sales below Wall Street’s expectations. Fourth-quarter earnings also missed estimates, with Five Below saying that “shrink,” the industry term that encompasses merchandise theft and damage, taking a greater-than-anticipated bite out of its profit.
Accenture reported fiscal second-quarter earnings that beat analysts’ estimates but issued a forecast for the fiscal year that missed. Shares of the professional services company declined 9.3%.
Broadcom rose 5.6% to $1,348 after shares of the semiconductor company were upgraded to Outperform from Market Perform at TD Cowen and the price target was raised to $1,500 from $1,400. The analysts said Broadcom’s artificial-intelligence event on Wednesday left them feeling quite optimistic about the stock.
U.S.-listed shares of Li Auto tumbled 7.5% after the Chinese electric-vehicle maker said it expects vehicle deliveries in the first quarter of between 76,000 and 78,000, down from its prior forecast of between 100,000 and 103,000 vehicles. In a statement, Li Auto said it was reducing its forecast “due to lower-than-expected order intake.”
Darden Restaurants fell 6.5% after the owner of Olive Garden and LongHorn Steakhouse trimmed its fiscal-year revenue outlook.
Shares of Chewy fell 10% after the online pet products retailer reported fourth-quarter net earnings of 7 cents a share, better than analysts’ forecasts that called for a loss of 4 cents, and a sales jump of 4.2% to $2.83 billion, which also beat estimates. Chewy, however, said it expects a year of “modest growth” for the pet markets industry.
Market News
Yellen would welcome US legislation to aid cannabis banking access
U.S. Treasury Secretary Janet Yellen said on Thursday she would welcome legislation that would rectify the conflict between federal and state laws on the sale and use of marijuana that is preventing cannabis firms from accessing the banking system.
Asked at a U.S. House of Representatives Appropriations subcommittee hearing about the issue, which forces cannabis businesses to hold large amounts of cash, Yellen said: "I think it's a real problem and it would be desirable to have legislation that alleviated this problem."
Microsoft pays Inflection $650 mln in licensing deal while poaching top talents, source says
Microsoft has agreed to pay AI startup Inflection about $650 million in cash in an unusual deal that would allow Microsoft to use Inflection's models and hire most of the startup's staff including its co-founders, a person familiar with the matter told Reuters on Thursday.
The high-profile AI startup's models will be available on Microsoft's Azure cloud service, the source said. Inflection is using the licensing fee to pay Greylock, Dragoneer and some other investors, the source added, saying the investors will get a return of 1.5 times what they invested.
