Stock market today: Stocks waver after key data as Micron slides


US stocks wobbled on Thursday after chipmaker Micron’s (MU) outlook put a dent in tech-rally hopes, as investors assessed fresh economic data ahead of an inflation reading key to Federal Reserve policy.

The S&P 500 (^GSPC) was little changed after rising Wednesday to close not far short of a new all-time high. The Dow Jones Industrial Average (^DJI) hovered around the flatline, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.1%.

Stocks are struggling in the wake of Micron’s sales forecast for the current quarter, which met expectations but failed to satisfy investors looking for stellar outperformance from AI-linked companies.

Bullishness around AI has helped lift the benchmark S&P 500 to a 15% gain this year. But concerns are growing that the rally could be at risk if the handful of tech companies driving most of those gains stop topping already lofty expectations.

Memory maker Micron’s shares slid more than 4% in early trading. Nvidia (NVDA) was down about 1%, reviving worries of a return to the sell-off that rattled markets last week.

Investors were weighing a new batch of economic data ahead of the PCE inflation print on Friday that will influence the Fed’s thinking on timing of interest-rate cuts.

A reading on initial weekly jobless claims came in at 233,000, a decrease of 6,000 from the previous week, according to Department of Labor data. The print came in below a consensus expectation of 235,000. But recurring jobless claims rose to their highest since late 2021, suggesting it’s taking longer for unemployed people to find a job.

Real gross domestic product (GDP) increased at an annual rate of 1.4% in the first quarter of 2024, according to the third estimate by the Bureau of Economic Development released on Thursday morning. The print was slightly higher than the prior estimate of 1.3%.

Inflation could also loom large in the first debate between President Joe Biden and former President Donald Trump on Thursday night.

On the corporate front, Levi Strauss (LEVI) shares sank over 15% in the wake of a second-quarter revenue miss for the jeans seller. Investors will look to Nike’s (NKE) quarterly results after the bell for more clues to consumer resilience.

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    Pending home sales fall in May

    High home prices and elevated mortgages are keeping prospective buyers away from the housing market.

    Pending home sales — a forward-looking indicator of home sales based on contract signings — fell 2.1% in May from the month prior, according to National Association of Realtors data. Year-over-year, they were down 6.6%, the data released Thursday showed.

    The Midwest and South posted a drop in contract signings in May from the month before. The Northeast and West recorded gains. All regions across the country registered losses in activity on an annual basis.

    “The market is at an interesting point with rising inventory and lower demand,” NAR chief economist Lawrence Yun said in a statement. “Supply and demand movements suggest easing home price appreciation in upcoming months. Inevitably, more inventory in a job-creating economy will lead to greater home buying, especially when mortgage rates descend.”

    Mortgage rates are sitting at their lowest average in three months, but that’s still not enough to lure buyers. About 95% of mortgage borrowers have interest rates below current market rates, and almost 80% have rates more than 2 percentage points below market rates, per Goldman Sachs data.

    Looking ahead, Yun expects “moderately lower mortgage rates, higher home sales and stabilizing home prices.”

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    Walgreens tanks 24% on lower guidance due to “challenging” pharmacy trends, weak consumer

    Walgreens stock plunged 24% to touch its lowest level since 1997 after the drugstore chain lowered its fiscal 2024 earnings guidance, citing “challenging pharmacy industry trends and a worse-than-expected US consumer environment”

    “Our customers have become increasingly selective and price-sensitive in their purchases,” said Walgreens Boots Alliance CEO Tim Wentworth during the company’s earnings call on Thursday morning.

    Management indicated 25% of the company’s stores are not currently contributing to the long-term strategy and “changes are imminent.”

    Walgreens said it plans to close a “significant portion” of its underperforming stores over the next three years.

    It expects adjusted earnings per share for the year to come in between $2.80 and $2.95, down from its prior forecast of $3.20 to $3.35.

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    Netflix, Meta help lift Nasdaq into green territory

    Communication stocks boosted the Nasdaq Composite (^IXIC) into positive territory with a rise of 0.3% shortly after the market open on Thursday.

    Netflix (NFLX) and Meta (META) both advanced more than 1%, helping lift the tech-heavy gauge that had dipped just below the flatline.

    The S&P 500 (^GSPC) rose 0.2%, while the Dow Jones Industrial Average (^DJI) was little changed.

    Meanwhile, chip giant Nvidia’s (NVDA) shares were fractionally lower after Micron’s (MU) sales forecast failed to enthuse investors on the AI craze that has fueled the broader market rally this year.

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    Stocks waver at open as investors weigh economic data, Micron puts lid on tech rally

    Stocks opened slightly lower on Thursday as investors assessed economic data released before the bell.

    The S&P 500 (^GSPC) was little changed, while the Dow Jones Industrial Average (^DJI) slipped 0.1%. The tech-heavy Nasdaq Composite (^IXIC) fell to just below the flatline.

    Real gross domestic product (GDP) increased at an annual rate of 1.4% in the first quarter of 2024, according to the third estimate by the Bureau of Economic Development released on Thursday morning. The print was slightly higher than the prior reading of 1.3%, but still showed the slowest growth since 2022.

    A reading on initial weekly jobless claims came in at 233,000, a decrease of 6,000 from the previous week, according to Department of Labor data.

    On the corporate front, Chipmaker Micron’s (MU) sales forecast for the current quarter met expectations but failed to satisfy investors looking for stellar outperformance from AI-linked companies. The stock fell about 4% in early trading. AI chip giant Nvidia (NVDA) also slipped almost 1% at the open.

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    Why the Levi’s quarter bothers me

    Levi’s (LEVI) shares are getting slammed by 15% in the pre-market following earnings.

    And I think it’s deserved for two reasons.

    First, China sales tanked 10% from the prior year. I have been chatting to a good number of folks of late who have recently visited China. One theme is that Chinese consumers are feeling on the gloomy side and not spending like in years past. That mood is impacting demand for Levi’s jeans, Starbucks (SBUX) coffee and — according to General Mills’ (GIS) earnings call yesterday — Haagen Dazs ice cream.

    It’s hard to see the inflection point in China.

    Same goes for the Levi’s wholesale business, or the business that sells into department stores. Sales fell 4% from the prior year. The company’s commentary suggests wholesale demand may not inflect until 2025.

    I plan to put some of my concerns to Levi’s CFO Harmit Singh today at 10:30 a.m. ET on Yahoo Finance. Tune in!



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