The S&P 500 (^GSPC) continued its record-breaking run, with investors focusing on the day’s earnings for insights into corporate America and the economy.
The S&P 500 increased by about 0.3% to a new closing high of 4,864.61. The Nasdaq Composite (^IXIC) rose 0.4% on Tuesday, while the Dow Jones Industrial Average (^DJI) dipped 0.2% after the blue-chip index surpassed 38,000 for the first time Monday.
Following a tech-driven rally that propelled the market to fresh record highs, earnings in other industries were the primary market movers on Tuesday.
An earnings letdown dragged on the Dow, with 3M (MMM) falling more than 10% on Tuesday after the company’s 2024 profit forecast fell short of Wall Street’s expectations.
Consumer Staples (XLP) and Communications Services (XLC) were the S&P 500’s top gainers, with staples up more than 1% as investors analysed quarterly results from Procter & Gamble (PG) and Verizon (VZ), among others.
On the profits front, United Airlines’ (UAL) bullish 2024 profit prediction helped boost its shares by 5% on Tuesday. Other carriers’ shares surged on the forecast, including Delta (DAL) and American carriers (AAL), despite United warning of an impact from the grounded Boeing 737 Max 9 jets.
Netflix (NFLX) is also in the spotlight, as the streaming behemoth reports results after the bell. The firm announced on Tuesday a contract with TKO Group’s WWE (TKO) to offer Raw, WWE’s flagship programme, to the streaming service in January 2025. TKO stock increased by roughly 15% on the announcement.
The announcement early Tuesday that Netflix (NFLX) and TKO Group (TKO), which owns WWE, will collaborate to deliver Raw to the streaming service dominated the headlines and propelled TKO shares up more than 16%.
However, another announcement this morning saw TKO reorganise its board and add one of the biggest names of this era to its director roster.
Dwayne “The Rock” Johnson has joined TKO’s board of directors, starting today, in an agreement that also secures Johnson ownership of the trademarked moniker “The Rock.”
Wall Street experts have noted that the S&P 500 (^GSPC) is trading at a historically high value of more than 21 times anticipated earnings.
However, a fresh study from the UBS team published on Tuesday demonstrates that not everything is now overly pricey.
According to strategist Patrick Palfrey, 77% of S&P 500 businesses are trading below their January 2022 highs. Of those firms, 55% now have a lower price-to-earnings ratio than they had at the previous market peak.
Following a tech rally that brought the market to fresh record highs, earnings in other industries will be the primary market movers Tuesday.
Consumer Staples (XLP) and Communications Services (XLC) were the top gainers in the S&P 500 (^GSPC), up more than 0.5% in afternoon trade. Investors reviewed quarterly results from Proctor & Gamble (PG), Verizon (VZ), among others.
The Dow Jones Industrial Average (DJI) fell around 0.5% after breaking above 38,000 for the first time on Monday. The S&P 500 and tech-heavy Nasdaq Composite (^IXIC) both fell slightly below the flatline.
Homebuilder stocks have been one of the brightest spots in the market’s recovery, but fresh data released on Tuesday shows the industry remains vulnerable to interest rates and their impact on housing.
D.R. Horton (DHI) shares fell 9% in noon trading Tuesday after the homebuilder disclosed lower-than-expected quarterly orders and first-quarter profits per share that fell short of analyst expectations. Investor response also drove down the SPDR S&P Homebuilders ETF (XHB) by much as 3%.