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Stock market today: S&P 500 hits fresh record with 5,000 in mark in sight

US stocks rose on Wednesday as investors digested a fresh inflow of quarterly earnings, with the debate over timing of interest rate cuts still rumbling in the background.

The Dow Jones Industrial Average (^DJI) rose 0.4%, or about 150 points, while the S&P 500 (^GSPC) popped more than 0.8%. The Nasdaq Composite (^IXIC) was up nearly 1%. The S&P 500 closed at 4,995, a new record high, and is now nearing 5,000 for the first time ever.

The market took stock of performance this earnings season, with about two-thirds of S&P 500 company reports now in. Results have on average beaten Wall Street expectations, but some areas of weakness have emerged.

In Wednesday's morning trade, Alibaba (BABA) shares retreated more than 5% after the Chinese online retailer posted a revenue miss but said it will boost share buybacks by $25 billion. Meanwhile, shares of Snap (SNAP) tumbled more than 34% after the social media company's profit forecast for the current quarter came in worse than expected.

After the closing bell Disney (DIS) announced it would boost its cash dividend by 50% as the company reported fiscal first quarter earnings that beat expectations while streaming losses narrowed. Shares rose more than 6% in post-market trade.

Meanwhile on Wednesday, Fed officials continued to tout that interest rates aren't likely to come down in March. Boston Fed President Susan Collins said that rate cuts could come "later this year," but first the central bank needs to see more evidence of inflation cooling.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

Also top of mind for investors on Wednesday, growing troubles at New York Community Bancorp (NYCB) have stoked worries about regional banks and the health of the real estate sector. Moody's has downgraded the lender's credit rating to junk, and several brokerages have cut their price target amid warnings about governance risk. NYCB shares recovered slightly, rising 7% on Wednesday after sliding more than 22% on Tuesday.

LIVE COVERAGE IS OVER13 updates
  • Disney boosts cash dividend, earnings beat estimates

    Disney (DIS) stock rose more than 5% in after-hours trading after the company reported fourth quarter earnings that topped Wall Street's estimates and boosted its cash dividend.

    Yahoo Finance's Alexandra Canal reports:

    Disney (DIS) announced it would boost its cash dividend by 50% on Wednesday as the company reported fiscal first quarter earnings that beat expectations while streaming losses narrowed.

    Disney reported adjusted earnings of $1.22 a share — a significant beat compared to the $0.99 analysts polled by Bloomberg had expected. The company also guided to full-year fiscal 2024 earnings of $4.60 a share, an increase of at least 20% versus 2023.

    Revenue came in at $23.5 billion, a slight miss compared to the $23.8 billion expected.

    "We are on track to meet or exceed our $7.5 billion annualized savings target by the end of fiscal 2024, while we continue to look for further efficiency opportunities," the company said in the release.

    The company announced a cash dividend of $0.45 a share, an increase of 50% versus the last dividend paid in January. The dividend will be payable on July 25 to shareholders of record at the close of business on July 8.

    The board also approved a new share repurchase program, targeting $3 billion in purchases in fiscal 2024.

  • S&P hits new record high on Wednesday

    US stocks rose on Wednesday as investors digested a fresh inflow of quarterly earnings, with the debate over timing of interest rate cuts still rumbling in the background.

    The Dow Jones Industrial Average (^DJI) rose 0.4%, or about 150 points, while the S&P 500 (^GSPC) popped more than 0.8%. The Nasdaq Composite (^IXIC) was up nearly 1%. The S&P 500 closed at 4,995, a new record high, and is now nearing 5,000 for the first time ever.

  • New sports streaming partnership hits against Big Tech, rights fees inflation

    The new "joint venture" sports streaming partnership between Disney's ESPN (DIS), Warner Bros. Discovery (WBD), and Fox (FOXA) could have serious implications on the entire sports ecosystem.

    In other words, future deals could be a lot cheaper while Wall Street watchers say the partnership tilts the power away from Big Tech as prices skyrocket across multiple professional and collegiate leagues.

    The deal, announced late Tuesday, will bring together the three companies' respective slates of sports networks. Collectively, the new service encompasses about 55% of US sports rights, according to Citi Research.

    Tech giants like Amazon (AMZN), Apple (AAPL), and YouTube (GOOG, GOOGL) have been more aggressive when it comes to streaming deals over the past several years — especially for sports.

    "We see this move as defensive vs Big Tech angling into future rights as media will now have both production and distribution," Wells Fargo analyst Steve Cahall wrote in reaction to the news.

    Amazon, which recently debuted the first Black Friday NFL game, agreed to spend $1 billion annually for its 11-year NFL Thursday Night Football deal, while Google's YouTube coughed up a reported $2.5 billion to acquire the sought-after rights to NFL Sunday Ticket.

    Apple, meanwhile, announced a 10-year, $2.5 billion agreement with Major League Soccer (MLS) in late 2022. It's also rumored to be bidding on Formula One and NBA rights.

    Those deals, funded by the deep pockets of Big Tech, have inflated the overall costs of sports with the NBA aiming to fetch a whopping $75 billion rights package, up from its current $24 billion deal with ESPN and WBD's TNT. The current deal expires at the end of the 2024/25 season.

    Seventy five billion dollars "is a big number," Mark Boidman, partner and global head of media at Solomon Partners, told Yahoo Finance Live on Wednesday. "The cost [of sports] continues to go up and so you bring these companies together, it takes the competitive tension out of the mix."

    Currently, it's assumed Disney, Fox, and Warner Bros. Discovery will continue to bid on sports rights independently; however, media watchers have begun to weigh the possibility of the three companies bidding for rights as a single entity.

    MoffettNathanson analyst Michael Nathanson added a possible combo bid "could change the shape and leverage of future sports rights negotiations."

    "If this joint venture evolves over time into a different form and eventually bids as a combined entity for sports rights, that would clearly limit the number of +1 bidders critical to maintaining the inflation in future negotiations that the entire sports ecosystem is built around," he wrote in a note to clients on Tuesday.

    Disney will report its fiscal first-quarter earnings after the bell on Wednesday. It's widely expected management will address the new partnership on the earnings call.

    Read more here.

  • One chart shows that if the market leaders stop performing the S&P 500 can still keep rising

    The S&P 500 (^GSPC) is creeping near 5,000 for the first time ever. And once again, the stocks leading the major average higher are the biggest members of the benchmark average.

    This can be seen in recent market action with Nvidia (NVDA) and Meta (META) both up double digits in the last five trading sessions alone.

    This has become a sticking point among strategists on Wall Street. Some believe the concentration of pushing stocks higher could be a risk to the market rally.

    BMO Capital Markets chief investment strategist Brian Belski disagrees.

    "While some investors may be concerned that the market is likely to struggle without these stocks leading the way, our analysis shows that the S&P 500 has performed just fine following peaks in relative performance of the 10 largest stocks," Belski wrote in a note to clients on Tuesday.

    A chart from Belski shows that on average the S&P 500 rises 14.3% in the year following a peak in contribution from the top 10 stocks in the benchmark average. The only time the S&P 500 delivered a negative return in the next year was 2001 amid the fallout from the tech bubble.

  • Trending tickers on Wednesday afternoon

    Snap (SNAP) led the Yahoo Finance trending tickers page on Thursday afternoon. Shares slumped more than 35% after the company's profit guidance for the current quarter came in lower than Wall Street hoped and analysts believe investor patience in a turnaround story is "thinning."

    Roblox (RBLX) stock popped more than 10% after the gaming company's net bookings hit $1.13 billion, reaching above $1 billion for the first time.

    Shares of CrowdStrike (CRWD) and Palo Alto Networks (PANW) rose more than 5% after another member of the cybersecurity sector announced better-than-expected earnings. Fortinet (FTNT) reported quarterly results on Tuesday night that showed earnings per share of $0.51 in the prior quarter, above analyst estimates for $0.43. Shares of Fortinet were up marginally on the news.

    Enphase Energy (ENPH) stock rose nearly 20% after the company said it expects demand for its products to pick up by the end of the second quarter.

  • Consumer discretionary leads market rally

    After an earnings beat from Chipotle sent shares in the fast-casual restaurant up more than 8% in intraday trading, the Consumer Discretionary Sector (XLY) is leading the market action on Wednesday.

    The sector is up more than 1%, followed by Technology (XLK), which is up about 1%. All 11 sectors were either near flat or in the green at 1 p.m. ET.

    Source: Yahoo Finance
    Source: Yahoo Finance
  • Raymond James downgrades homebuilder MDC amid merger bid

    Denver-based homebuilder MDC (MDC) has been hit with a stock downgrade by Raymond James following the announcement of its acquisition by the largest Japanese homebuilder, Sekisui House.

    The deal would double Sekisui's presence in the US to 16 states, making it the fifth-largest homebuilder, according to Reuters.

    Raymond James analyst Buck Horne lowered his rating on MDC stock to Market Perform from Outperform, while withdrawing his old target price of $55.00 a share.

    Horne said in a note that he is particularly concerned with the stock’s valuation following Sekisui House’s announced intent to acquire MDC in an all-cash transaction with an equity value of $4.9 billion.

    MDC shareholders would receive $63.00 per share in cash, which represents a 19% premium to MDC's closing stock price pre-announcement of $53.09, and a 15% premium to Horne's prior target price of $55.00 per share.

    “We currently find shares of MDC trading at $62.33/share, representing a 1% discount to the acquisition price,” Horne wrote in a note to clients Wednesday morning.

    “Though another competing bid is always possible, the inclusion of a $147 million termination fee suggests to us a low likelihood of another unsolicited bid emerging," Horne added.

    News of the deal has sparked other deal chatter in the industry. D.R. Horton’s (DHI) CEO Paul Romanowski said on the company's recent quarterly earnings call that the builder continually looks at acquisitions and that "we're more interested in the smaller tuck-in builders that may add to our market share in an existing market.”

    The MDC deal has already received unanimous approval from the boards of both companies and is likely to get shareholder approval as well. The acquisition is expected to close in the first half of this year.

  • Another Fed official says rate cuts likely 'later this year'

    A week after Jerome Powell said a Federal Reserve interest rate cut in March isn't the base case, multiple Fed officials have publicly echoed a similar tone.

    Yahoo Finance's Jennifer Schonberger reports:

    Boston Fed President Susan Collins said she needs to see more evidence inflation is coming back to the Fed’s 2% target before lowering interest rates, but that those cuts could come "later this year."

    "I will need to see more evidence before considering adjusting the policy stance," Collins said in a speech in Boston. Collins is a non-voting member of the Fed's Federal Open Market Committee, which decides whether rates go up or down.

    "That said, as we gain more confidence in the economy achieving the committee’s goals ... I believe it will likely become appropriate to begin easing policy restraint later this year."

    Collins is the latest policymaker to pump the brakes on Wall Street expectations for an aggressive pace of cuts in 2024.

    Investors began the year predicting six cuts starting in March and Fed officials have been pushing back on those expectations for the last month.

    That includes Fed Chair Jay Powell, who said in a press conference last week that a March cut is "probably not the most likely case or what we'd call the base case." He also made the same point in an interview on the TV program "60 Minutes" that aired Sunday night.

    The language the Boston Fed president used Wednesday to describe when cuts could happen was similar to the words used Tuesday by Cleveland Fed President Loretta Mester, who also said the central bank could lower interest rates "later this year" while warning it would be a "mistake" to cut too soon.

    Another Fed official, Adriana Kugler, did not provide any additional hints Wednesday when delivering her first speech since being confirmed as a governor on the Federal Reserve Board.

    But Kugler did say at some point "the continued cooling of inflation and labor markets may make it appropriate to reduce the target range for the federal funds rate."

    Though she added that if progress on inflation stalls, it may be appropriate to hold the target range steady at its current level for longer.

  • Sports streaming platform including Disney, Fox, and Warner Bros. Discovery to cost $40 per month: CNBC

    The new sports streaming platform announced on Tuesday night that will combine coverage from Disney's ESPN (DIS), Warner Bros. Discovery (WBD), and Fox (FOXA) will be priced at or above $40 per month, per a CNBC report.

    CNBC reported the number citing sources and also added that the three companies have identified an executive to lead the new venture. The executive, per CNBC, will be announced a later date.

    The new channel will include coverage of all four major sports leagues in the US: the NFL, MLB, NBA, and NHL.

  • Ford stock rises after Q4 earnings beat

    Ford stock (F) stock rose more than 2% in morning trade after the legacy automaker reported fourth quarter results after the bell.

    Yahoo Finance's Pras Subramanian:

    The automaker reported fourth quarter sales that easily topped expectations and projected a full-year profit outlook that beat estimates, though the company still sees more losses for its EV unit.

    The results come after GM (GM) reported strong earnings and profit guidance last week that indicated strength in the overall US auto sector.

    Ford reported top-line revenue of $46 billion vs. $40.35 billion estimated by Bloomberg, which is $2 billion more than a year ago despite the lingering effects of the United Auto Workers (UAW) strike in early Q4.

    In terms of profitability, Ford reported adjusted earnings per share of $0.29 vs. $0.13 estimated, on adjusted EBIT (earnings before interest and taxes) of $1.1 billion, vs. the $988.2 million expected.

    For the year, Ford notched $10.3 billion adjusted EBIT, at the higher end of its full-year 2023 adjusted EBIT outlook of $10 billion to $10.5 billion (which includes $1.7 billion in strike-related lost profits). Ford reinstated its 2023 profit outlook following the ratification of its labor deal with the UAW.

    As for its 2024 full-year outlook, Ford projected adjusted EBIT of $10 billion to $12 billion —below Ford's pre-UAW strike 2023 profit outlook of $11 billion to $12 billion, but higher than estimates of $9.24 billion. Ford rival GM issued 2024 profit guidance that matched its initial pre-UAW strike outlook for 2023.

    "The guidance presumes flat to modestly higher full-year US industry volume, with overall lower vehicle pricing," the company said in a statement.

    Ford also declared a first quarter regular dividend of $0.15 per share and a supplemental dividend of $0.18 per share.

    Ford CFO John Lawler said in a statement that Ford will improve capital efficiency by selectively reducing investments and "raising the bar" on expected returns for new initiatives.

    “The objective is to improve total adjusted return on invested capital from about 14% in 2023 to 20% over the next couple of years,” Lawler said. “Simply ‘good’ isn’t good enough, and investments are going to projects that have credible plans to deliver their targeted returns.”

  • Snap stock tanks after another earnings flop

    Snap (SNAP) stock tanked on Wednesday, sinking more than 30% as investors digested another disappointing quarterly earnings report.

    The Snapchat parent company posted quarterly revenue of $1.36 billion, below street estimates for $1.38 billion. The company has now missed revenue estimates on six of the last eight reports. And now it says it expects to lose more money in the current quarter than Wall Street expected too.

    The company is projecting an adjusted EBITDA loss in a range of $55 million to $95 million, a wider loss than the $32.7 million Wall Street expected.

    Snap says that the loss will come alongside a higher revenue growth rate than seen last quarter as the company continues on its "investment plans."

    For investors, the key question will be if those plans help Snap complete its turnaround story. Given the company's expected EBITDA guidance coming in significantly lower than expectations, RBC Capital Markets analyst Brad Erickson believes investors may be tired of waiting for the turnaround.

    "Investors' patience for underwriting growth-oriented investments seems poised to continue thinning," Erickson wrote in a note to clients.

    Investors bet heavily on the Snap turnaround story this past year, with shares up more than 60% over the past six months. But when quarterly reports came, the story didn't change much. The stock tumbled in reaction to each of the last seven earnings reports as investors struggled to see how a company whose shares were once more than $80 a share could create a solid growth pitch again.

    MoffettNathanson senior research analyst Michael Nathanson said that the market was "once again fooling itself that this time would be different" as Snap shares soared over the past several months. He added that the Snap story has often felt like investors are only a quarter away from seeing change "every quarter."

    "Truth is, with the ramping competition in AI-enabled product solutions at major, larger companies, it is hard to see how Snap’s competitive position and financial profile gets materially better," Nathanson wrote in a note to clients on Wednesday.

  • Stocks pop at the open

    US stocks rose on Wednesday as investors digested a fresh inflow of quarterly earnings, with the debate over the timing of interest rate cuts still rumbling in the background.

    The Dow Jones Industrial Average (^DJI) rose 0.3%, while the S&P 500 (^GSPC) popped almost 0.5%. The Nasdaq Composite (^IXIC) was up more than 0.5%.

  • NYCB seeks to reassure investors in late night press release

    At 11:46 p.m. ET on Tuesday, New York Community Bank (NYCB) published a release seeking to reassure investors that the 60% plunge in its stock price and a downgrade to some of its credit ratings from Moody's on Tuesday overstated the challenges facing the bank.

    Shares of the lender were up as much as 15% in premarket trade.

    "We took decisive actions to fortify our balance sheet and strengthen our risk management processes during the fourth quarter," NYCB CEO Thomas Cangemi said in the statement. "Our actions are an investment in enhancing a risk management framework commensurate with the size and complexity of our bank and providing a solid foundation going forward. Despite the Moody's ratings downgrade, our deposit ratings from Moody's, Fitch and DBRS remain investment grade. The Moody's downgrade is not expected to have a material impact on our contractual arrangements."

    As Yahoo Finance's David Hollerith outlined early Wednesday, the challenges at NYCB in part echo last year's regional bank crisis, which saw the firm take on some assets of failed lender Signature Bank.

    This, in turn, bumped NYCB up a tier in terms of its asset base, subjecting it to additional oversight and liquidity requirements.

    The departure of two key executives has also heightened scrutiny on the bank.

    And after Fed Chair Jerome Powell told "60 Minutes" this weekend that pressures in the commercial real estate market could lead to additional bank closures, the action in the stock market suggests investors see NYCB as being particularly at risk.

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