U.S. stocks ended lower on Tuesday, with the Nasdaq showing the largest declines as chipmaker Nvidia stumbled ahead of its highly awaited earnings report, while gains in Walmart kept losses on the Dow Industrials in check.
Market Snapshot
The S&P 500 lost 30.06 points, or 0.60%, to end at 4,975.51 points, while the Nasdaq Composite lost 144.87 points, or 0.92%, to 15,630.78. The Dow Jones Industrial Average fell 64.19 points, or 0.17%, to 38,56.80.
Market Movers
Nvidia (NVDA) - Nvidia‘s highly anticipated fourth-quarter earnings report is scheduled for after the close of trading on Wednesday. Sales are expected to more than triple from the prior year to greater than $20 billion, getting a boost from Nvidia’s dominance in supplying the chips used to train artificial-intelligence systems. The stock was down 4.4% to $694.52 on Tuesday. The shares have risen 225% over the past year.
Discover Financial (DFS), Capital One (COF) - Discover Financial rose 12.6% to $124.42 after it reached a deal to be acquired by Capital One Financial for more than $35 billion. Under terms of the all-stock deal, Discover shareholders will receive 1.0192 Capital One shares for each Discover share, representing a premium of about 27% to Discover’s closing price on Friday of $110.49. The transaction will create the largest U.S. credit card company by loan volume. Capital One shares rose 0.1%.
Discover was the best-performing stock in the S&P 500 on Tuesday, while Expeditors International of Washington was the worst, falling 6.9%.
Walmart (WMT), Vizio (VZIO) - Walmart, the world’s largest retailer, reported fourth-quarter adjusted earnings of $1.80 a share, beating expectations of $1.64. Sales rose to $173.4 billion, which topped projections of $170.9 billion. The company agreed to buy Vizio Holding in a deal valued at $2.3 billion. Walmart shares rose 3.2%. Vizio jumped 16.3%.
Home Depot (HD) - Shares of Home Depot were flat after the home-improvement retailer reported fourth-quarter U.S. same-store sales fell 4%, wider than analysts’ expectations for a decline of 3.6%. Home Depot said it expects fiscal-year sales to rise 1% and same-store sales to fall 1%, missing estimates on both counts.
Super Micro Computer (SMCI) - Super Micro Computer was down 2% to $787.57. The stock has risen 756% over the last 12 months, driven by investor excitement for the future of artificial intelligence. On Tuesday, analysts at Rosenblatt raised their price target on Super Micro Computer to $1,300 from $700 while maintaining a Buy rating.
Barclays (BCS) - U.S.-listed shares of Barclays rose 12.1% after the British lender said it plans to return at least £10 billion ($12.6 billion) to shareholders between 2024 and 2026 through dividends and stock buybacks and would undergo a three-year reorganization.
Market News
Amazon to Replace Walgreens in Dow Industrial Average on February 26
Amazon will replace Walgreens Boots Alliance in the Dow Jones Industrial Average, S&P Dow Jones Indices, which manages the price-weighted measurement of 30 stocks, said on Tuesday. Amazon shares moved up 1% in extended trading, and Walgreens stock moved 3% lower.
The move will result in more exposure to the online retailer for investors who bet on the average, which is far smaller than the S&P 500 index.
The change goes into effect prior to market open on Feb. 26.