Markets News, Oct. 4, 2024: Stocks Surge After Strong Jobs Report; Dow Closes at Record High

Biggest S&P 500 Movers on Friday

October 04, 2024 05:34 PM EDT

Advancers

• Shares of lithium producers moved higher following reports that British-Australian mining giant Rio Tinto (RIO) might be considering an acquisition in the lithium industry. Rio Tinto is reportedly looking to expand its lithium operations, even as prices for the metal have been pressured by soft electric vehicle (EV) demand. Shares of Albemarle (ALB), the world’s largest lithium producer, surged 8.2% on Friday, marking the top performance in the S&P 500.
• United Airlines (UAL) shares gained 6.5% following reports that low-cost rival Spirit Airlines (SAVE) is considering a bankruptcy filing in the wake of its failed merger with JetBlue Airways (JBLU). Spirit is also said to be exploring options to restructure its balance sheet as it faces billions of dollars in debt. Spirit shares plummeted 24.6% on Friday, while JetBlue shares soared 14.2%.
• Deckers Outdoor (DECK) shares added 6.4% on the day. The parent company of the Ugg, Hoka, and Teva footwear brands is a relatively fresh addition to the S&P 500, having joined the benchmark index in March. More recently, Deckers Outdoor completed a six-for-one stock split in September. Following the split, Baird analysts highlighted Deckers stock for its “best-in-class growth.”

Decliners

• Extra Space Storage (EXR) shares dropped 3.9%, the biggest loss of any S&P 500 stock on Friday. The downtick for the self-storage real estate investment trust (REIT) came after regulatory filings revealed CEO Joseph D. Margolis sold around $1.34 million worth of shares in the company. Investors often consider significant sales by company insiders as a potential warning signal.
• Shares of credit reporting agency Equifax (EFX) sank 3.4%. Earlier this week, UBS initiated coverage on Equifax stock with a “buy” rating, asserting that the company could be positioned to benefit from an expected normalization in the mortgage market. However, there could be less certainty around a mortgage recovery after today’s jobs report, which raised questions about the likely pace of interest-rate cuts by the Federal Reserve.
• Concerns about Fed rate cuts and the trajectory of mortgage rates weighed on companies in the homebuilding industry. Shares of homebuilder D.R. Horton (DHI) fell 2.9%, while shares of peers Lennar (LEN) and PulteGroup (PHM) were down 2.5%.

Michael Bromberg

Major Indexes Inch Into Positive Territory for the Week

October 04, 2024 04:32 PM EDT

After a rocky week, a late-session surge pushed the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite into positive territory for the week, but just barely.

ExxonMobil Hits Record High Despite Q3 Profit Warning

October 04, 2024 03:17 PM EDT

Shares of ExxonMobil (XOM) hit a record high Friday, riding the coattails of the surge in crude oil prices amid concerns about tensions in the Middle East.

The latest gains came even as the oil major warned that lower oil prices and refining margins in the third quarter would have have a negative impact on results for the period compared to the previous quarter.

The energy giant wrote in a regulatory filing that a change in crude prices would cause a $600 million to $1 billion reduction in upstream profit for the third quarter. It expects a similar financial effect by a change in industry margins for energy products.

ExxonMobil made a profit of $9.2 billion in the second quarter. It posted $9.1 billion in earnings in the third quarter of 2023.

ExxonMobil shares were up 1.6% at $124.58 in recent trading, after hitting an all-time high of $125.19 earlier in the session.

–Bill McColl

S&P Back to Near Unchanged for the Week

October 04, 2024 01:47 PM EDT

The S&P 500 is just a few points away from where it started the week, after a bumpy few days to start trading this month.

The index was up 0.5% at 5,729 recently, about 10 points away from being in positive territory for the week and not far from its all-time intraday high of 5,767.

Meta Price Levels to Watch as Stock Hits Record High

October 04, 2024 12:37 PM EDT

Meta Platforms (META) shares hit a new record high Friday as investor optimism about the tech giant’s AI opportunities runs high.

Meta shares were up 0.4% at around $585 in midday trading Friday. The stock has gained 65% so far in 2024, handily outpacing the S&P 500’s return of around 20% over the same period.

The relative strength index confirms bullish price momentum in the stock, but also warns of overbought conditions, opening the door to short-term profit taking.

Investors should monitor key retracement levels around $535 and $480, while also monitoring chart-based bullish price targets at $700 and $790.

Read the full technical analysis piece here.

–Timothy Smith

Rivian Tumbles as EV Maker Slashes Production Outlook

October 04, 2024 11:35 AM EDT

Rivian Automotive (RIVN) shares sank Friday as the electric vehicle maker missed third-quarter delivery estimates and slashed its full-year production outlook because of difficulties in getting a part.

Rivian said it built 13,157 EVs in the quarter, and delivered 10,018. Analysts surveyed by Visible Alpha were looking for 12,08O deliveries. The company’s latest news extended a recent slide in a stock that has fallen from levels seen this summer following an investment from Volkswagen.

The company cut its 2024 production estimate because of a supply shortage of a component used to build its R1S SUV and RCV commercial van. It added that the issue began in the third quarter, and “has become more acute in recent weeks and continues.”

Rivian now anticipates it will manufacture 47,000 to 49,000 EVs this year, down from its previous forecast of 57,000.

Rivian shares were down 7% in recent trading and have lost more than half their value since the start of the year.

–Bill McColl

Frontier, JetBlue Soar on Report of Spirit Bankruptcy Talks

October 04, 2024 11:03 AM EDT

Shares of Frontier Group Holdings (ULCC) and JetBlue Airways (JBLU) took off Friday on a report that discount airline rival Spirit Airlines (SAVE) is considering a bankruptcy filing. Spirit shares plunged 25% soon after markets opened.

The Wall Street Journal reported that Spirit is in discussions with bondholders and other creditors about possible terms for a Chapter 11 filing, although it noted such a filing would not be imminent. The paper said that Spirit is also looking at restructuring its balance sheet through an out-of-court deal, although the focus was on the bankruptcy negotiations.

Spirit has faced losses and falling revenue on tougher competition from both low-cost rivals and bigger airlines. It failed in its $6.6 billion plan to merge with Frontier in 2022. Following that, Spirit agreed to a takeover by JetBlue, only to see that fall through this year as regulators challenged it over antitrust concerns.

Frontier shares were up 21% in recent trading, while JetBlue gained 17%.

–Bill McColl

Treasury Yields Rise, Rate Cut Expectations Fall

October 04, 2024 09:50 AM EDT

Treasury yields jumped and the market’s expectations for interest rate cuts plummeted on Friday morning after the surprisingly strong jobs report dispelled some fears that the Federal Reserve needs to come to the rescue of a weakening labor market.

Market participants slashed their rate cut forecasts in the wake of the report. The odds of the Fed cutting rates by 50 basis points, or half a percentage point, at its next meeting in November slumped from 30% to about 5%, according to federal funds futures trading data. Market participants are now pricing in less than a 30% chance that the Fed will cut its benchmark rate by a total of 75 basis points by year’s end, which compares with the 56% odds that were priced in yesterday.

The readjusted expectations aligned Wall Street’s view with that of Fed officials, who in their quarterly economic projections forecast making modest rate cuts at each of its two remaining meetings this year.

Treasury yields soared in the wake of the report, with the 10-year yield jumping about 10 basis points to 3.95%, its highest level since mid-August. The yield on the 2-year Treasury, which is heavily influenced by the market’s expectations for the Fed’s benchmark interest rate, leapt 15 basis points to 3.87%, a one month high.

–Colin Laidley

Major Index Stock Futures Higher Ahead of Jobs Data

October 04, 2024 07:57 AM EDT

Futures tied to the Dow Jones Industrial Average were up 0.1%.

S&P 500 futures were up 0.3%.

Nasdaq 100 futures were up 0.4%.