Stocks closed the day higher on Monday as investors prepared for a host of corporate earnings this week. Wall Street also braced for heightened geopolitical tensions as the US attempted to advance efforts to contain the Israel-Hamas conflict.
The Dow Jones Industrial Average (^DJI) increased 0.9%, or more than 300 points, while the the tech-heavy Nasdaq Composite (^IXIC) led the day's gains, up 1.2%. The S&P 500 (^GSPC) gained more than 1%.
Earnings season picks up steam this week, with reports from Goldman Sachs (GS) and Bank of America (BAC) due Tuesday after upbeat results from their Wall Street peers. Updates from Tesla (TSLA) and Netflix (NFLX) kick off tech earnings on Wednesday, likely to be scrutinized for clues to the sector's resilience amid higher-for-longer interest rates.
Alongside JPMorgan's results on Friday, CEO Jamie Dimon said this may be "the most dangerous time the world has seen in decades," a warning that is still resonating days later.
Investors remain focused on the Middle East crisis — and right now on whether the US and its allies can stop the clash from drawing in other countries, especially Iran. A full-blown regional conflict could send oil prices surging well above $100 a barrel, risking a global recession, some analysts believe.
But prices for gold and bonds fell, attracting those seeking safe havens. The 10-year Treasury yield (^TNX) rose to 4.69%, recouping some of its losses from last week.
Q3 earnings off to "solid" start
The predictions for an end to the earnings recession have passed their first test.
After 32 S&P 500 companies have reported earnings, companies in the index are beating Wall Street's expectations by an average of 9% on earnings per share, according to Bank of America Research's equity strategy team. In aggregate, after two quarters of declines, EPS for S&P 500 companies is up 1% compared to the same quarter last year, forecasting early signs the corporate America earnings recession may be over.
In a research note Monday, RBC Capital's head of US equity strategy Lori Calvasina described the start of earnings season as "solid" despite the "macro headwinds."
Despite challenges such as sticky inflation and a higher for longer stance from the Federal Reserve, RBC has raised its S&P 500 EPS forecast. RBC sees recent macro movements driving higher S&P 500 earnings up to $223 (from $220) in 2023 and $232 (from $229) in 2024.
"The changes are driven by shifts in forecasts for the macro variables that we use in our model to forecast revenues, margins, and other inputs, and we have not made any other significant changes to our basic assumptions or methodology," Calvasina.
Energy lags amid Israel conflict
As stocks gained across the board on Monday, energy lagged with crude oil futures (CL=F) dropping more than 1% to trade below $87 a barrel. Brent crude futures (BZ=F) were down about 1.5% to trade about $90 a barrel.
The moves follow a volatile week in oil prices amid escalating fears that the latest conflict in Israel could disrupt supply, especially from Iran.
Stocks trending in afternoon trading
Here are some of the stocks and cryptocurrencies leading Yahoo Finance’s trending tickers page in afternoon trading on Monday:
Bitcoin (BTC-USD): The cryptocurrency rose 5% on Monday to trade near $28,000 as investors await the Securities and Exchanges Commission’s decision regarding the first-ever spot Bitcoin ETF.
Pfizer Inc. (PFE): Shares rose 3% on Monday after the drugmaker cut its sales forecast for its COVID-19 vaccine, citing lower demand. However, Wall Street analysts believe cost cuts and new drug launches could still drive growth, prompting the upswing in the stock. The news had the opposite effect on pharma companies with greater exposure to vaccine production. Moderna (MRNA) and BioNTech (BNTX), Pfizer's COVID vaccine partner, both fell by more than 6%.
Snap (SNAP): Snap surged 12% after a leaked internal memo showed the company has lofty goals for 2024. According to the Verge, citing the internal memo, Snap is expected to have more than 475 million daily active users (DAUs) next year, above Wall Street estimates. Advertising revenue expectations also came in higher at 20%
No bad blood here! Taylor Swift's concert film delivers big numbers
Industry estimates have come in slightly lower, hovering at just above $93 million, which would still be the second-best domestic opening weekend for the month of October — following 2019's "Joker."
The concert film captured an additional $31 million to $33 million overseas, the theater chain projected, making it the best debut of all time for any concert film.
Adding onto records, the film delivered $13 million globally for Imax (IMAX), resulting in the biggest Imax opening ever for a film by a musical artist — concert or documentary.
"It's really kind of an outside-the-box approach to moviegoing right now and something that I think we could see more of going going forward," Shawn Robbins, chief analyst at Box Office Pro, told Yahoo Finance Live on Monday.
Despite the solid showing, AMC and Cinemark (CNK) shares moved lower in afternoon trading on Monday, sinking about 1.5% and 3%, respectively. Imax shares traded mostly flat.
Top 2023 domestic box office films
The release of the film comes at a critical time for theaters as the nearly five-month-long writers strike caused multiple disruptions to the release schedule. Most notably, Warner Bros.' (WBD) "Dune" sequel was delayed to March 2024 after it was originally scheduled for November 2023.
Other studios have also reshuffled their respective programming with Hollywood actors still on the picket lines. The union, SAG-AFTRA, accused the the Alliance of Motion Picture and Television Producers (AMPTP) of "bullying tactics" after talks between the two sides broke down over viewership bonuses and regulations surrounding AI.
"This is a weekend theater owners have been very thankful for in the wake of a few delays caused by the writers and actors strikes over recent months," Robbins said. "Here we are talking about an almost $100 million opening weekend that was basically created out of thin air. This is not something something that was on the industry's radar just as recently as the end of summer."
Stocks turn higher in afternoon trading
Wall Street pushed stocks higher on Monday afternoon, as investors braced for a host of corporate earnings later this week.
Rite Aid files for bankruptcy
The bankruptcy is part of an effort to shutter unprofitable stores, address litigation over its role in the opioid pandemic and manage its debt load of roughly $4 billion.
The company said its Chapter 11 bankruptcy filing will help resolve the legal claims in an "equitable manner" after the Department of Justice filed a complaint against Rite Aid in March for its role in the opioid crisis. The complaint alleged Rite Aid filled "hundreds of thousands" of prescriptions that didn't meet legal requirements.
In the filing, Rite Aid explained that the bankruptcy process will help it walk away from leases at undesirable locations, noting that the company is currently "burdened" by unprofitable stores that it can't exit.
Stocks trending in morning trading
Here are some of the stocks and cryptocurrencies leading Yahoo Finance’s trending tickers page in morning trading on Monday:
Tesla (TSLA): Shares of the electric car maker rose more than 1% Monday morning as investors positioned themselves ahead of the company's earnings on Wednesday. While Detroit's Big Three automakers are still dealing with locked ongoing strikes, Tesla recently missed Wall Street's estimates for third quarter deliveries, and margins remain a key concern for the electric vehicle maker. Margins have declined throughout 2023 as the company has used price cuts to ignite demand.
Bitcoin (BTC-USD): The price of the dominant cryptocurrency rose 5% on Monday morning after the Securities and Exchange Commission did not appeal a recent decision on crypto asset manager Grayscale's application for the approval of a bitcoin exchange-traded fund (ETF).
Lululemon (LULU): Shares of Lululemon increased by more 8% ad the athleisure wear company prepares to join the S&P 500 index.
Pfizer Inc. (PFE): Pfizer's shares fell by over 1% on Monday after the drugmaker cut the sales forecast for its COVID vaccine. The news dragged down other COVID-heavy stocks. Moderna (MRNA) and BioNTech (BNTX), Pfizer's COVID vaccine partner, both fell by more than 6%.
Stocks open higher as tech companies prepare for earnings
Rite Aid, Lululemon, and Pfizer: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Monday:
Lululemon (LULU): Shares of Lululemon surged by over 5%. The athleisure wear maker is about to join the S&P 500 index.
Pfizer Inc. (PFE): Pfizer's shares fell by over 1% on Monday after the drugmaker slashed the sales forecast for its COVID vaccine. The news dragged down other COVID-heavy stocks, as Moderna (MRNA) and BioNTech (BNTX), Pfizer's COVID vaccine partner, both fell by more than 4%.
Manchester United plc (MANU): Manchester United shares fell 9% amid concerns that a buyout by Qatar's Sheikh Jassim bin Hamad al Thani could be off the table.