Markets
Stocks Fall After Strong Jobs Report; Jump in Treasury Yields
Stock indexes close: Strong jobs report weighs on commodities, consumers and construction companies
June 7, 2024, 4:13 pm EDT
The Dow Jones
3M (MMM) rose 2.7% after being upgraded from “neutral” to “buy” by Bank of America.
Litter (AAPL) added 1.2% before its Worldwide Developer Conference on Monday when it is expected to reveal several new AI capabilities.
Consumer stocks weighed on the index, including Walmart (WMT), down 1.9%, and McDonald’s (DCM), drop of 1.8%.
The S&P 500
Air and Chemical Products (DPA) rose 3.6% after the company signed an agreement with TotalEnergies (TTE) to supply green hydrogen to the French oil and gas company.
The financial sector outperformed on Friday. Capital One (COF) rose 2.6%, while Discover Financial (DFS) gained 1.8% and JPMorgan Chase (JPM) advanced 1.6%.
Eli Lilly (LLY) gained 1.5% after FDA researchers expressed no concerns about the company’s experimental Alzheimer’s drug, donanemab. A special panel will meet next week to advise on approval of the drug.
Newmont gold miner (NOR) fell 5% as Treasury yields rose and gold prices fell after Friday’s jobs report. Freeport-McMoRan (FCX), another major mining company, fell 3.8% as copper prices fell.
Homebuilders declined as Friday’s jobs report threatened to keep mortgage interest rates high longer than anticipated. Pulte Group (PHM) fell 2.5% and DR Horton (DHI) fell 2.4%.
Nvidia (NVDA) fell 0.1% before its 10-for-1 stock splitwhich will come into force before markets open on Monday.
Nasdaq 100
Cybersecurity stocks rose across the board on Friday. CrowdStrike Holdings (CRWD) gained 2.5%, while Palo Alto Networks (PANW) advanced 2% and ZScaler (ZS) rose 1.2%.
Biogen (BIIB) fell 2.8% following the FDA’s review of Eli Lilly’s donanemab, which would compete directly with Biogen’s Leqembi if approved.
Chip stocks fell as rising Treasury yields weighed on growth stocks. ASML Participation (ASML) fell 2.3% and Qualcomm (QCOM) fell 1.4%.
What could Friday’s stock split do for Nvidia?
June 7, 2024, 3:09 pm EDT
Nvidia (NVDA) shares were little changed on Friday ahead of a 10-for-1 split set to take effect after the close.
Nvidia shares were trading at $1,208 with about an hour left in the session. If the stock closed at that price, the stock would open at a price of about $120.80 and investors would have ten times as much stock on Monday morning.
After a stock split, some investors may find the stock price more affordable and decide to buy, increasing demand and, in turn, leading to an increase in share price. For example, when Amazon (AMZN) executed a 20-for-1 stock split in 2022, shares rose on the days following the division.
A stock split can also signal to the market that the company’s share price has increased enough to justify the change and investors may believe that this growth will continue in the future.
“Historically, stock splits have been bullish for companies that implement them, gaining 25% a year later versus 12% for the broad index,” according to Bank of America research.
The split could also increase Nvidia’s chances of joining an index like the Dow Jones Industrial Average (DJIA)since price-weighted indices like the Dow tend to avoid adding high-priced stocks because movements in their prices can have a disproportionate impact on the index.
Vail Resorts Shares Fall as Snowfall Low Impact on Q3 Earnings
June 7, 2024, 2:17 pm EDT
Vail Resorts Shares (MTN) fell on Friday, a day after the ski resort operator reported worse-than-expected results and lowered its guidance as a lack of snow reduced demand.
The company reported third quarter fiscal 2024 earnings per share (EPS) of $9.54, with revenue increasing 3.6% year over year to $1.28 billion. Both fell short of analyst estimates compiled by Visible Alpha.
Chief Executive Officer (CEO) Kirsten Lynch said Vail faced “unfavorable conditions at our North American resorts for much of the 2023/2024 North American ski season.” She noted that year-over-year snowfall totals were about 28% lower for the entire winter season at the company’s western North American resorts.
Vail now sees full-year net income attributable to the company in a range of $224 million to $256 million, down from its previous forecast of $270 million to $325 million.
Vail Resorts shares traded down 11.3% on Friday afternoon, near the lowest point since the start of the COVID-19 pandemic in 2020.
GameStop Slides Further During Roaring Kitty Live Stream
June 7, 2024, 1:12 pm EDT
GameStop stock trading (GME) was interrupted several times on Friday afternoon as meme stock influencer Keith Gill hosted his first live broadcast in more than three years, fueling wild swings in the video game retailer’s share price.
Gill, who goes by Roaring Kitty online, began streaming around 12:25 p.m. and quickly amassed an audience of more than 600,000 viewers as he discussed in vague terms his confidence in GameStop and its CEO Ryan Cohen.
GameStop shares fell Friday morning after the company unexpectedly reported its quarterly earnings days before its scheduled release. GameStop’s revenue and profits fell short of Wall Street expectations. Stocks fell further during Gill’s live broadcast in erratic trading, start and stop.
Friday’s losses wiped more than $235 million from Gill’s position, which he first revealed on Sunday at 12:58 p.m. Still, Gill’s portfolio showed an unrealized gain of more than $146 million.
GameStop shares were down more than 38% as of 1:10 p.m. ET, but are still up 57% this year.
Docusign Revenue, Future Billing Raise Concerns, Stock Drops
June 7, 2024, 12:10 pm EDT
Document (DOCU) shares fell on Friday, a day after the document-signing software-only provider slightly exceeded revenue estimates and its billing guidance has raised concerns about growth.
The company reported the first quarter of fiscal 2025 adjusted earnings per share (EPS) of $0.82, with revenue increasing 7.3% year over year to $709.6 million.
Revenue increased 5.2% to US$709.5 million. For the current quarter, Docusign forecasts revenue in the range of US$715.0 million to US$725.0 million, and between US$2.98 billion and US$3.03 billion for fiscal year 2025.
CFO Blake Grayson said the company anticipates the second quarter will have the lowest year-over-year booking growth rate in fiscal 2025, “particularly given comparisons to last year’s strong on-time renewal performance and timing impacts of various customer contracts.”
Docusign also announced that the board approved a $1 billion increase in company value share buyback program.
Docusign shares are down 5% and have lost 13% of their value this year.
GameStop Slips After Unexpectedly Reporting Earnings, Issuing More Shares
June 7, 2024, 11:27 am EDT
GameStop (GME) unexpectedly announced his fiscal 2024 first quarter report before the bell on Friday, with results falling short of analysts’ expectations, contributing to the stock’s recent volatility.
The company reported quarterly net sales of $882 million, down from $1.24 billion in the same period a year ago and below analyst expectations of $900 million, according to consensus estimates compiled by Visible Alpha.
Net losses were $32.3 million, or 11 cents per share, down from last year’s $50.5 million, or 17 cents per share, but slightly larger than analyst projections.
GameStop also said in a Securities and Exchange Commission (SEC) order would sell up to an additional 75 million shares, on top of the 45 million shares it recently sold for more than $900 million.
The unexpected gains came hours before meme stock influencer Keith Gill first Live broadcast in three years, scheduled for noon ET Friday. Gill, known as “Roaring Kitty” on YouTube and “DeepF—ingValue” on Reddit, was a top player in 2020 and 2021 meme stock craze. Gill recently began posting again after a hiatus of about three years, sending GameStop shares soaring and contributing to the stock’s volatility.
GameStop shares, which closed 47.5% higher on Thursday, have fallen more than 28%. However, they have more than doubled this year.
Stocks making the biggest moves in early trading
June 7, 2024, 10:10 am EDT
Earnings:
Lyft (LIFT): Shares rose 6%, continuing Thursday’s gains after the ride-sharing company gave an optimistic long-term prospects on your first day for investors.
Robinhood Markets (HOOD): Shares extended their gains and rose 1.2% after the online trading platform announced its acquisition of Bitstampa European cryptocurrency exchange, on Thursday.
Losses:
Document (DOCU): Shares fell 8% even with the electronic signature and document management company released financial and financial results that surpassed analysts’ forecasts.
GameStop (GME): Shares, which were halted twice this morning, fell 6% after the video game retailer unexpectedly reported results and announced plans to sell more shares for the second time in less than a month. The launch took place just hours before a Live stream on YouTube that meme stock influencer Keith Gill is scheduled for noon ET on Friday.
Nvidia (NVDA): Shares of the AI star fell 1.3% ahead of the chip designer’s 10-for-1 stock split after market closewith division-adjusted trading beginning on Monday.
Stock Futures Drop
June 7, 2024, 8:53 am EDT
Dow futures fell 0.3% in premarket trading Friday.
S&P futures fell 0.4%.
Nasdaq futures fell 0.3%.