Markets News, April 19, 2024: Tech Sell-Off Hands Nvidia Worst Day in 4 Years; Nasdaq, S&P 500 Fall for 6th Day (2024)

Stock Indexes Wrap: Nvidia, Chip Stocks Tumble as Financials, Staples Advance

April 19, 2024 04:16 PM EDT

The Dow

American Express (AXP) jumped 6.2% after reporting better-than-expected first-quarter earnings and net interest income. Peers in the financial sector also rose, including JPMorgan Chase (JPM), up 2.5%, and Travelers Companies (TRV), up 1.7%.

Procter & Gamble (PG) ticked up 0.5% after topping Wall Street's estimates with its first-quarter earnings.

The Dow’s price-weighting insulated it from the effects of a tech sell-off that sank some of its largest components. Amazon (AMZN) fell 2.6%, Microsoft (MSFT) shed 1.3%, and Apple (AAPL) lost 1.2%.

The S&P 500

Paramount Global (PARA) shares jumped 13.4% amid reports Sony Pictures was in talks with Apollo Global Management to make a joint takeover bid for the entertainment company.

Fifth Third Bancorp (FITB) rose 5.9% after reporting its earnings fell less than analysts expected in the first quarter.

Super Micro Computer (SMCI) tumbled 23.1% after it skipped previewing its first-quarter earnings, something it's done in seven of the last eight quarters, raising concerns about slowing growth.

Nvidia (NVDA) led a semiconductor sell-off, falling 10% to notch its lowest close since February and its worst single day since March 2020.

Jabil (JBL) fell 8.4% after the company said it had placed CEO Kenneth Wilson on paid administrative leave amid an internal investigation of corporate policies.

SLB (SLB) slipped 2.2% after reporting a decline in North American revenue in the first quarter.

Tesla (TLSA) fell 1.9% after the company recalled nearly 4,000 Cybertrucks to repair faulty accelerator pedals.

Intuitive Surgical (ISRG) got caught up in the sell-off despite beating earnings estimates. The stock slid 1.7%.

The Nasdaq 100

Utilities stocks rose, extending a recent string of winning sessions. Exelon (EXC) rose 2.4% while American Electric Power (AEP) and Excel Energy (XEL) rose 2% and 1.8%, respectively.

Netflix (NFLX) slumped 9.1% after issuing disappointing current-quarter revenue guidance.

Advanced Micro Devices (AMD) followed Nvidia lower, falling 5.4%. Micron (MU) and Broadcom (AVGO) lost 4.6% and 4.3%, respectively.

Meta (META) slipped 4.1% amid the tech sell-off.

Super Micro Stock Tumbles as Skipped Earnings Preview Stokes Growth Concerns

April 19, 2024 03:09 PM EDT

The recent slide in the stock price of Super Micro Computer (SMCI) accelerated Friday as the artificial intelligence (AI) darling spooked investors by not preannouncing its March quarter results.

The AI hardware maker, also known as Supermicro, has released a preliminary financial report in seven of the last eight quarters, usually providing estimates ahead of its previous outlook. However, on Friday the company simply announced that it will report third-quarter fiscal 2024 results on April 30.

Shares plunged more than 22% on Friday to trade at $717, their lowest since early February. Still, thanks to its meteoric rise earlier in the year, the stock was up more than 150% so far this year.

-Bill McColl

Nvidia Loses $2 Trillion Market Cap

April 19, 2024 02:26 PM EDT

Nvidia’s market cap fell below $2 trillion on Friday afternoon amid a tech sell-off that hit semiconductor stocks particularly hard.

The AI chip leader’s shares fell as much as 7.3% to trade below $800, the $2 trillion threshold for Nvidia, which has 2.5 billion outstanding shares.Though, even with Friday's losses, the company still stood as the third-most valuable company in the U.S., ahead of both Alphabet (GOOGL) and Amazon (AMZN).

Nvidia’s market cap first topped $2 trillion on February 23, just 270 days after it surpassed $1 trillion. Shares continued to climb into late March when they topped out at $950, giving the company a market value of nearly $2.4 trillion.

Nvidia and other tech stocks have wavered this month as strong economic data and a slew of hotter-than-expected inflation reports have forced markets and policymakers to lower their expectations for the interest rate cuts this year.

Nvidia was followed lower by semiconductor peers Advanced Micro Devices (AMD) and Micron (MU), both of which were down more than 4% Friday afternoon.

How Soap Likely Made Tesla Recall Almost 4,000 Cybertrucks

April 19, 2024 01:52 PM EDT

Tesla (TSLA) has ordered a voluntary recall of almost 4,000 Cybertrucks after the National Highway Traffic Safety Administration (NHTSA) found an issue with the vehicle's accelerator pedal.

“When high force is applied to the pad on the accelerator pedal, the pad may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal," the NHTSA said. It noted that if that happens, “the performance and operation of the pedal will be affected, which may increase the risk of a collision.”

Regulators explained that the pads likely came loose as soap, used as a lubricant in the vehicle assembly process, prevented them from remaining stuck to the pedal.

A total of 3,878 Cybertrucks are involved in the recall, including all that were manufactured between November 13 and April 4.

Tesla shares were down about 0.6% at $149.1 Friday afternoon. They have lost about 40% of their value this year.

-Bill McColl

Bitcoin Miners Climb Ahead of Halving

April 19, 2024 12:53 PM EDT

Shares of Bitcoin miners rose on Friday ahead of a hotly anticipated halving.

Marathon Digital (MARA), Cleanspark (CLSK), and Riot Platforms (RIOT), three of the largest publicly traded miners, were all up about 8% early Friday afternoon.

The upcoming halving will, as the name suggests, cut the reward for mining bitcoin in half. That may not be as bad for miners as it sounds. Halving, because it slows the rate at which new bitcoin is minted, has the potential to boost prices. It has also historically increased adoption of bitcoin. Both outcomes would benefit miners, helping to offset the halving’s downside.

There are also several ways miners can make up for the lost revenue. Miners can charge higher transaction fees, which up to now have represented a sliver of their overall revenue. Some miners are also exploring “energy harvesting,” which would involve generating their own electricity and selling the byproducts.

Paramount Jumps as Sony, Apollo Reportedly Consider a Joint Bid for the Media Giant

April 19, 2024 12:09 PM EDT

Paramount Global (PARA) shares soared close to 8% in early trading Friday afterThe New York Timesreported that Sony Group’s (SONY) studio division was in talks with Apollo Global Management about joining a bid for the media giant.

The two companies have not submitted an official bid, according to the report, as Paramount is still in exclusive merger conversations with Skydance Media.

The potential deal with Skydance has received significant investor pushback, while Paramount had initially rejected Apollo’s initial offer to buy the company for more than $26 billion, including debt, amid questions about the investment firm's financing.

Shares of Paramount were up 8.3% to $11.88 midday Friday. Even with Friday's gains, they've lost close to 20% of their value since the start of 2024.

-Fatima Attarwala

American Express Posts Earnings Beat, Affirms 2024 Growth Projections

April 19, 2024 11:08 AM EDT

American Express (AXP) shares rose on Friday after the credit card provider reported first-quarter revenue and profit that came in above analyst expectations, and affirmed its full-year growth guidance for 2024.

American Express reported revenue of $15.8 billion, just above consensus analyst estimates compiled by Visible Alpha of $15.76 billion. Net income of $2.44 billion and diluted earnings per share (EPS) of $3.33 were well above estimates of $2.17 billion and $2.96 per share, respectively.

Unlike several of its peers in the finance industry that reported lower net interest income than expected in recent earnings reports, American Express posted $3.77 billion of profit in the metric, ahead of expectations of $3.66 billion.

American Express affirmed its full-year guidance for fiscal 2024, projecting year-over-year revenue growth of 9% to 11% and EPS of $12.65 to $13.15.

American Express shares initially fell 2% in premarket trading following the earnings report's release before reversing course, and were up about 4% at $226 Friday morning. The stock has gained about 20% so far this year.

-Aaron McDade

Why Netflix's Blockbuster Q1 Earnings, Subscriber Growth Failed To Power Its Stock

April 19, 2024 10:21 AM EDT

Netflix (NFLX) reported better-than-expected revenue and earnings for the first quarter as its subscriber growth surged. And yet it was one of the worst-performing stocks in the S&P 500 Friday morning as markets focused on its revenue guidance.

The streaming company's subscribers grew 16% year-over-year to 269.6 million, adding 9.33 million new paying customers in the three months ending March. After a lull in 2022, Netflix has seen its subscriber base growth even after implementing a password crackdown.

Netflix posted net income of $2.33 billion or $5.28 per diluted share. Revenue grew 14.8% to $9.37 billion, much higher than analyst expectations.

The company forecast revenue would grow 16% to $9.49 billion in the second quarter, just shy of the $9.5 billion forecast by analysts polled by Visible Alpha.

Netflix also projected its income would decline from the first quarter. Net Income is expected to come in at $2.06 billion, down from the $2.33 billion reported in the first quarter, whileearnings per share (EPS)is expected to fall to $4.68 from $5.28.

Netflix shares were down more than 6% at $572.61 Friday morning. Though, after surging on its fourth-quarter earnings report, the stock is still up more than 17% so far this year.

-Mrinalini Krishna and Naomi Buchanan

Stocks Making the Biggest Moves Premarket

April 19, 2024 09:27 AM EDT

Gains:

• Paramount Global (PARA): Shares of the entertainment company rose more than 7% amid reports Sony and asset manager Apollo Global Management were considering making a joint bid to acquire the company.
• Coinbase Global (COIN): Shares of the cryptocurrency exchange rose more than 3% as bitcoin surged ahead of the hotly anticipated halving, which is expected to take place this afternoon.
• Shopify (SHOP): Shares of the e-commerce company climbed more than 3% after Morgan Stanley analysts upgraded the stock to overweight, citing its attractive valuation.
  

Losses:

• Netflix (NFLX): Shares of the streaming giant were down about 6% after its revenue forecast fell short of Wall Street estimates.
• Taiwan Semiconductor Manufacturing Co. (TSM): Shares of the chipmaking giant were down about 2%, extending losses yesterday following a disappointing forecast for the global semiconductor industry.
• Tesla (TSLA): Shares of the electric vehicle maker fell more than 1% after it recalled nearly 4,000 cybertrucks to repair faulty accelerator pedals.

Stock Futures Slightly Higher as Oil Prices Moderate

April 19, 2024 08:55 AM EDT

Futures contracts connected to the Dow Jones Industrial Average recovered after plummeting overnight following Israel's attack on Iran. Dow futures traded less than 0.1% higher about an hour before markets opened.

S&P 500 futures were up 0.1%.

Nasdaq 100 futures were flat.