The stock market rally suffered a sharp loss Tuesday but quickly rebounded, with the S&P 500 and Nasdaq composite hitting record highs. The Dow Jones fell modestly, but pared losses. Nvidia and chipmakers led the advance, while some software names struggled. CrowdStrike rose strongly on earnings in a wild week. Tesla was a big loser amid multiple headlines. Novo Nordisk soared on new obesity trial data. Treasury yields fell even as Fed chief Jerome Powell continued to stress that he's in no rush to cut rates. A mixed jobs report likely doesn't change that. Bitcoin kept surging.
Stock Market At Record High
The Nasdaq composite and S&P 500 hit all-time highs Thursday, quickly rebounding from a Tuesday tumble. The Russell 2000 hit a 23-month high. The Dow Jones declined, but came off its worst levels. Chip stocks continued to surge, but a number of non-tech sectors shined. Treasury yields retreated.
Powell Sees No Reason To Rush Cuts
Fed chief Jerome Powell had few surprises in his congressional testimony, continuing to make the case that there's no reason to rush rate cuts. Economic data during the week didn't do much to change that, but may have eased fears that the Fed will scale back rate-cut plans even further at the March 20 meeting. Nonfarm payrolls rose by 275,000 in February, above forecasts, but sharp downside revisions from the prior two months more than offset that. The hiring trend remains solid though. However, the jobless rate unexpectedly popped to two-year-high of 3.9% due to a surprisingly weak household employment survey. Hourly average earnings rose just 0.1%, with the annual gain cooling to 4.3%. Earlier, the ISM services index fell slightly, still pointing to modest growth.
Bitcoin Hits Record High
Bitcoin topped $70,000 briefly on Friday extending a massive run over the past few weeks. Ethereum ran up to its best levels since December 2021. Coinbase skyrocketed yet again amid growing optimism for the cryptocurrency exchange's trading volume, BlackRock filed with the SEC to add bitcoin exposure to its $17.83 billion Global Allocation Fund, including its iShares Bitcoin Trust ETF. Meanwhile, Marathon Digital fell more than 11% for the week. The bitcoin miner on Tuesday reported it produced 833 bitcoin in February, up 22% from the prior year but down 23% from January. Marathon faces maintenance issues at two of its major facilities.
Novo Nordisk Soars On Obesity Pill
Novo Nordisk said its weight-loss pill, amycretin, lost more than 13% of their body weight over 12 weeks in a phase one trial. The results were better than Novo's own injectable weight-loss drug, Wegovy, which stoked about 6% weight loss over the same time period. Novo shares soared to a record high. But on Friday, the FDA said it would hold an advisory committee meeting to discuss the benefits and risks of Eli Lilly's Alzheimer's drug, donanemab. That will delays the FDA's decision on whether to approve donanemab, which was expected this quarter. Eli Lilly edged lower.
CrowdStrike Earnings Double
CrowdStrike reported fourth-quarter earnings surged 102% with revenue up 33% to $845.3 million both beating. Annual recurring revenue swelled 34% to $3.44 billion. For the new fiscal 2025, the cybersecurity giant guided slightly higher at the midpoint. CrowdStrike also announced it will buy cloud-computing security firm Flow Security. Shares initially soared on earnings, then slashed gains before rebounding for a strong week.
Broadcom Gets AI, Data Center Lift
Chipmaker and infrastructure software provider Broadcom handily beat expectations for its fiscal first quarter ended Feb. 4. But it but kept its sales guidance for the full year unchanged, disappointing investors. Adjusted EPS rose 6%. Sales jumped 34% to $11.96 billion, thanks to its recent VMware acquisition. Broadcom cited strong sales of AI chips and data center networking gear for its outperformance. Meanwhile, chipmaker Marvell Technology delivered in-line results for its fiscal fourth quarter but guided well below estimates for the current period.
Youth Apparel
Abercrombie & Fitch guided high after beating lofty expectations for the holiday quarter. The teen-friendly apparel retailer posted EPS of $2.97, a 267% increase. Revenue grew 21% to $1.453 billion. Higher average selling prices plus lower freight and raw material costs boosted profit. Abercrombie guided fiscal 2024 sales growth of 4%-6%, above views. Abercrombie, once known for its perfumed stores and shirtless models, has adopted more refined styles to appeal to more age groups. The retail stock retreated after earnings but has soared 350% in the past year. American Eagle also beat expectations thanks to strong demand and lower markdowns and input costs. The denim retailer announced a new strategy to boost profitable growth over the next three years. It's also leaning into new categories, such as its Offline activewear brand, which launched in 2020. Shares surged Thursday morning but reversed lower. Gap holiday earnings beat expectations as its largest banner, Old Navy, returned to growth for the first time in more than a year. The retailer reported EPS of 49 cents vs. 23 cents expected and a 75-cent loss a year earlier. Revenue rose about 1% to $4.3 billion. Shares jumped.
Off-Price Retailers
Ross Stores reported a 39% EPS gain while revenue rose 15.5% to $6 billion, the fifth third straight quarter of faster top- and bottom-line growth. But full-year earnings guidance disappointed, with the "Dress for Less" retailer citing macroeconomic certainty. Shares fell modestly from record highs. Burlington Stores also beat on the top and bottom lines as sales rose and inventories fell. Shares jumped to a 52-week high.
Target Jumps On Earnings
The discounter's earnings per share swelled 58%, easily beating views. Revenue rose 1.7% to $31.9 billion, slightly beating. reversing two quarters of declines. Target guided Q1 EPS below views and fiscal 2025 slightly below consensus. Target also announced a paid membership program that will launch in April, competing with Amazon and Walmart. Target Circle 360 will include perks like unlimited free same-day delivery for orders over $35 in as little as one hour, free two-day shipping, and other benefits, CNBC reported. Target will continue to offer its free Target Circle loyalty program. Target stock jumped to a 52-week high.
Tesla Tumbles On News
Tesla stock suffered sharp weekly losses, hitting a fresh 10-month low. China insurance registrations, along with ongoing Model 3 production woes in the U.S., suggest that the EV giant's first-quarter deliveries will come in well below current consensus. Tesla Berlin has shut production again after arsonists targeted its power supply. That may not hurt sales much given high Model Y inventories in Europe. Morgan Stanley's Adam Jonas slashed earnings estimates, saying Tesla could "potentially" lose mone this year. Jonas cut his Tesla price target to 320, down from 345, Tuesday but maintained an overweight rating on the shares.
Palantir Jumps On TITAN win
Palantir Technologies won a new, $178 million U.S. Army contract for project TITAN, a battlefield system using artificial intelligence. The Tactical Intelligence Targeting Access Node battlefield system will aggregate data from space and terrestrial sensors for long-range precision targeting and other battlefield planning. Shares of the data analytics software maker jumped.
In Brief
Nordstrom topped Q4 views with a 30% EPS jump and 2.3% sales rise to $4.42 billion, but the upscale department store tumbled on weak guidance for the current year.
Couchbase reported a smaller-than-expected Q4 loss with a 20% revenue rise to $50.1 million also topping. The cloud database platform guided up on Q1 and fiscal 2025 revenue. Shares rose.
GitLab topped Q4 EPS estimates easily with revenue up 33% to $136.8 million. But the software development firm guided low for the current fiscal 2025. Shares plunged.
AeroVironment reported fiscal third-quarter EPS jumped 91% with sales increasing 39% to $186.6 million, both easily beating. The drone maker soared.
Nio narrowed losses but they were still wider than expected. Revenue rose 2% and beat estimates. The China EV maker gave a better-than-feared Q1 delivery outlook, suggesting a meaningful rebound in March. Notably, premium-oriented Nio said its new mass-market brand will debut in the second quarter, potentially stoking the China price war further. Nio stock hit a multiyear low, but pared losses.
Rivian Automotive revealed three new vehicles Thursday, including the compact R2 SUV as well as the R3 and high-performance R3X hatchbacks. All will use a new platform and should qualify for the $7,500 Inflation Reduction Act (IRA) tax credit. Rivian also said it's pausing construction of a $5 billion factory in Georgia and will openg an R2 production line at its existing Illinois plant, with production starting in early 2026. Rivian shares soared.
MongoDB reported a 51% EPS gain while revenue climbed 27% to $458 million, both beating fiscal Q4 views. But the database software guided for Q1 sales of $438 million, at the midpoint, well below views. MongoDB stock tumbled.
Sea Limited lost 19 cents per share with sales up 5% to $3.62 billion. Analysts expected a loss of 20 cents on revenue of $3.57 billion. The Singapore-based internet services firm also gave a positive outlook for e-commerce sales via its Shopee platform in 2024. Shares soared.
Box jumped after the file-sharing company reported better-than-expected quarterly earnings. Adjusted EPS climbed 13.5%. Sales climbed 3% to $263 million, in line. Box also announced it would integrate Microsoft Azure's OpenAI Service into its Box AI product for enterprises.
Samsara reported Q4 adjusted EPS of 4 cents, vs. a 2-cent loss a year earlier, just beating views. Revenue rose 48% to $276.3 million, solidly beating. For the current quarter ending in April, Samsara guided revenue slightly above consensus at the midpoint. Samsara, which provides sensors and cloud-based software to manage vehicle fleets and industrial operations, soared Friday.
