U.S. stocks closed slightly higher on Wednesday, as fresh inflation data reinforced investor hopes that the Federal Reserve is done raising interest rates, while retail stocks were boosted by an upbeat forecast from Target.
Market Snapshot
The Dow Jones Industrial Average rose 163.51 points, or 0.47%, to 34,991.21, the S&P 500 rose 7.18 points, or 0.16%, to 4,502.88 and the Nasdaq Composite rose 9.45 points, or 0.07%, to 14,103.84.
Market Movers
Cisco Systems cut its full-year revenue and profit forecasts on Wednesday in a sign that demand for its networking equipment was slowing, sending the company's shares down 11% after market.
Cybersecurity firm $Palo Alto Networks(PANW)$ Inc. tumbled after missing Wall Street estimates for billings in its fiscal first quarter and lowering its estimates for the full year. Investors were concerned after Fortinet Inc. gave a disappointing outlook for revenue earlier this month, thinking the fallout would bleed into Palo Alto. Fortinet, CrowdStrike Holdings Inc. and $Zscaler Inc.(ZS)$ all fell after Palo Alto reported earnings.
Target (TGT) reported third-quarter adjusted earnings of $2.10 a share, beating analysts’ estimates of $1.47, and shares of the retailer jumped 18%. Same-store sales fell 4.9% in the quarter but that was less than analysts’ forecasts.
VF Corp. (VFC) rose 14% to $17.77 after J.P. Morgan upgraded the stock to Neutral from Underweight and the price target on shares of the parent company of Vans and The North Face was raised to $19 from $15.
Warren Buffett’s Berkshire Hathaway (BRK.B) eliminated its stakes in General Motors (GM), Johnson & Johnson (JNJ), and Procter & Gamble (PG) in the third quarter, and reduced its stake in Amazon.com (AMZN) by 5%. Berkshire bought 9.7 million shares of Sirius XM (SIRI) during the quarter. Shares of broadcasting company Sirius rose 6.1%. The changes to the Berkshire portfolio were disclosed in a 13F filing posted to the Securities and Exchange Commission’s website late Tuesday.
TJX Cos. ( TJX ) closed down 3.3% after the off-price retailer reported better-than-expected third-quarter earnings but issued a profit forecast for the fourth quarter that fell short of expectations.
U.S.-listed shares of JD.com (JD) rose 7% after the Chinese e-commerce company reported third-quarter earnings and revenue that beat analysts’ estimates.
Chegg (CHGG) rose 18% after the educational software and services company announced a $150 million accelerated share repurchase with Morgan Stanley Bank N.A.
Walt Disney (DIS) closed up 3.2% on a report that activist investment firm ValueAct Capital has built a “significant” stake in the entertainment company.
XPeng (XPEV), the Chinese electric-vehicle maker, reported a third-quarter loss that was wider than a year earlier and revenue that came up short of estimates. The company said it expects fourth-quarter deliveries of 59,500 to 63,500 units, better than consensus, and revenue to increase 86.1% to 99.3% from a year earlier. American depositary receipts of XPeng were up 2.3%.
Goodyear Tire & Rubber (GT) was up 2.8% after the company said it was exploring strategic alternatives for its chemical business, the Dunlop brand, and its off-the-road equipment tire business.
Nvidia (NVDA) closed higher Tuesday, rising 2.1%, to record its tenth straight gain, matching a record set back on Dec. 27, 2016. It snapped that streak on Wednesday when shares of the graphics-chip maker closed down 1.6%.
Advance Auto Parts (AAP) fell 4.7% after the auto parts retailer posted a third-quarter loss of 82 cents a share versus Wall Street forecasts for profit of $1.44. The company also said it was initiating separate sale processes for its Worldpac business and its Canada operations and said it launched a cost-cutting plan of $150 million.
Market News
SpaceX Weighs Spinning Off Starlink Via IPO as Soon as 2024
SpaceX is discussing an initial public offering for its fast-growing Starlink satellite business as soon as late 2024, people with knowledge of the matter said, in a bid to capitalize on robust demand for communications via space.
To get ready, SpaceX has been moving the satellite unit’s assets to a wholly owned subsidiary that would ultimately be spun off in the IPO, said one of the people, who asked not to be identified because the conversations are private.
SEC Defers Decisions on Spot Bitcoin ETF, Grayscale Ether Futures Filings
The US Securities and Exchange Commission yet again has deferred making a decision on whether to approve the first US exchange-traded fund that invests directly in Bitcoin, despite speculation building that approval is just around the corner.
The primary US securities regulator deferred on a filing from Hashdex to convert its existing Bitcoin futures ETF into a spot fund, according to a document posted on its website Wednesday.
Microsoft Unveils Its First Custom-Designed AI, Cloud Chips
$Microsoft Corp.(MSFT)$ unveiled its first homegrown artificial intelligence chip and cloud-computing processor in an attempt to take more control of its technology and ramp up its offerings in the increasingly competitive market for AI computing. The company also announced new software that lets clients design their own AI assistants.
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