Markets News, November 5, 2024: Stocks Surge, Led by Tech Sector Rally, as Investors Await Presidential Election Results

Biggest S&P 500 Movers on Tuesday

Advancers

• The top performance in the S&P 500 on Election Day belonged to analytics software provider Palantir Technologies (PLTR), whose shares skyrocketed 23.4%. The surge in the stock came after Palantir reported better-than-expected revenue and net income for the third quarter. Palantir's CEO highlighted "unrelenting AI demand" as a key driver of the company's strong performance.
  

• Engine manufacturer Cummins (CMI) also reported third-quarter sales and profits that exceeded analysts' forecasts, and its shares popped 9.0%. Although sales were essentially flat year-over-year, Cummins increased its earnings before interest, taxes, depreciation, and amortization (EBITDA), reflecting margin expansion.
• Emerson Electric (EMR) shares surged 7.2% after the industrial technology and engineering company topped quarterly sales and profit estimates, boosted by growth in its Intelligent Devices segment. The firm also announced plans to acquire the remaining stake in Aspen Technology (AZPN), an automation software provider already under Emerson's partial control, in an effort to enhance its position in the industrial automation market.

Decliners

• Shares of Celanese (CE) plummeted 26.3%, the steepest drop of any S&P 500 stock on Tuesday, after the chemical supplier's third-quarter sales and profits fell short of expectations. Softness in key end markets, including paints, coatings, and construction, weighed on the company's performance, along with declines in the automotive and industrial sectors in the Western Hemisphere. Celanese also cut its dividend and announced plans to scale back production, suggesting it expects headwinds to persist.
  
• Casino operator Wynn Resorts (WYNN) also reported weaker-than-expected top- and bottom-line results for the third quarter, and its shares dropped 9.3%. A slowdown in Wynn's Las Vegas operations contributed to the shortfall, while the company's results in Macau were mixed. Wynn also noted an investment of $18.2 million during the quarter in its joint venture that is under construction in the United Arab Emirates.
• Archer-Daniels-Midland (ADM) shares fell 6.0% after the agricultural commodities maker canceled its scheduled earnings conference call and announced that it would restate previous financial results. The company said that, along with previously disclosed issues that led to a prior restatement, it has discovered additional accounting inaccuracies affecting several segments, noting that it is working to complete the restatements as soon as possible. ADM also provided preliminary third-quarter results that came in below forecasts.

-Michael Bromberg

GlobalFoundries Leads Nasdaq Gainers After Earnings

Shares of GlobalFoundries (GFS) surged 15% Tuesday after the chipmaker reported better-than-expected earnings and issued a rosy outlook.

The company reported $1.74 billion in revenue for the third quarter, down 6% from a year ago but slight above analysts' estimates. Net income also beat estimates at $178 million, though it was down nearly 30% year-over-year. For the fourth quarter, the company expects revenue between $1.8 billion and $1.85 billion, with profits between $161 million and $236 million.

CEO Thomas Caulfield said the company notched "key design wins" in the quarter and said its estimate-beating results come despite the "ongoing uncertainties" facing the semiconductor industry.

The company was one of the manufacturers chosen for billions of dollars in federal funding to build and upgrade semiconductor manufacturing facilities, part of the Biden administration's goal to make the U.S. a dominant semiconductor manufacturer. GlobalFoundries was picked to receive a $1.5 billion grant to build a new facility in New York and expand operations in Vermont.

GlobalFoundries shares, which hit a two-month high, were the top gainer in the Nasdaq Composite on Tuesday. Despite today's big move, the stock has lost about a third of its value since the start of the year.

-Aaron McDade

Why Celanese Plunged 26% to Two-Year Low

Celanese (CE) was the worst-performing stock in the S&P 500 on Tuesday after the chemicals supplier posted results that were worse than expected, slashed its dividend, and said it would cut production because of falling sales.

The company reported third-quarter EPS of $2.44, with revenue down 2.8% to $2.65 billion. Celanese said it faced “persistent demand weakness across key end-markets like paints, coatings, and construction, as well as rapid and acute downturns in Western Hemisphere automotive and industrial segments.”

The news sent Celanese shares down 26%, leaving them off about 41% this year and at their lowest point in about two years.

The company said it would continue to "take actions commensurate with the current demand environment” — which includes temporarily slicing its quarterly dividend of $0.70 per share by 95% in the first quarter of 2025.

It also plans to reduce manufacturing costs through the rest of the year by temporarily suspending production at facilities in every region and raising $200 million through an inventory release this quarter. Celanese said that it would take other cost-cutting measures.

CEO Lori Ryerkerk said that in the third quarter the company “faced a severely constrained demand environment that, in some cases like auto, degraded swiftly." She warned that "we expect demand conditions to worsen in the fourth quarter.” Celanese anticipates current-quarter EPS of $1.25, less than half of what analysts at Visible Alpha estimated. 

-Bill McColl

Gold Poised to Sustain Gains Regardless of Presidential Winner

The yearlong rally in the price of gold looks poised to continue in the months ahead—regardless of what happens in Tuesday's election.

That's the assessment of analysts at Goldman Sachs and ING who both predict gold will keep rising in the short-to-medium term, perhaps as high as $3,000 per troy ounce by the end of 2025. Gold futures (GC1!) were hovering close to $2,750 in recent trading Tuesday.

Expanding central bank purchases, declining interest rates, and heightened geopolitical tensions have created a "perfect storm for gold," ING said in a recent research note.

"These drivers are likely to continue regardless of who wins the presidential election," ING said.

Read the full article here.

-Lyle Niedens

Dollar Tree Levels to Watch as CEO Departs

Dollar Tree (DLTR) shares were lower in afternoon trading following the late-Monday announcement that CEO Rick Dreiling was stepping down. The company also reiterated its fiscal third-quarter outlook.

Since reaching their early-September low, Dollar Tree shares have formed two distinct troughs around the same level on the chart, raising the possibility of a double bottom, a classic pattern that signals a potential upside trend reversal.

Investors should monitor key resistance levels on Dollar Tree's chart around $77, $92, and $104, while watching a major support area near $63.

The stock was down 0.8% at $66.27 in recent trading.

Read the full technical analysis piece here.

-Timothy Smith

What Wall Street Thinks of Super Micro Ahead of Earnings

Super Micro Computer (SMCI) is set to report earnings after the bell as it looks to turn around the stock's recent slide and address concerns about its accounting practices.

Analysts have a cautious view of the server manufacturer. Three of the four analysts tracked by Visible Alpha gave the stock a "hold" rating, and the other analyst issued a "sell" rating. However, the average price target of $44.88 suggests that analysts expect the stock will recover from its recent losses, but not quite to the heights it reached earlier this year.

Super Micro shares were up 0.7% at $26.20 in recent trading. The stock, which had risen to near $123 in March, has lost 8% of its value since the start of 2024.

Super Micro's sales have benefitted from the AI boom as demand for its hardware to power AI products has swelled, but its stock hasn't matched the performance of its surging sales in recent months as earnings have fallen short on higher costs. Also, questions have been raised about the company's accounting practices.

After its stock had already tumbled in August, short seller Hindenburg Research issued a report accusing Super Micro of accounting manipulation and other issues. A day later, the company informed the Securities and Exchange Commission (SEC) that the filing of its annual 10-K would be delayed.

The company is also reportedly facing investigations from the Department of Justice (DOJ) into its accounting practices. Last week, the accounting firm EY resigned as Super Micro's auditor, citing a number of concerns with the results of its own investigation into Super Micro's accounting.

-Aaron McDade

Nvidia Jumps to Regain Position as Most Valuable Company

Nvidia (NVDA) shares rose Tuesday, pushing the chipmaker back into the top spot on the list of the world's most valuable companies by market capitalization, ahead of Apple (AAPL).

Nvidia shares were up nearly 3% in intraday trading Tuesday, lifting the chipmaker's market cap to about $3.44 trillion, just above the market cap of Apple, which was up about 0.7%.

Nvidia's latest move to reclaim the title of word's most valuable company comes after the chipmaker briefly overtook Apple Monday. Apple, Nvidia, and Microsoft (MSFT) have battled for the title this year as the only three companies with a market caps over $3 trillion. Microsoft shares were up about 1.5% Tuesday, giving the company a market cap of about $3.08 trillion.

Nvidia shares have more than doubled in value since the start of the year as big tech customers such as Meta (META) and Google parent Alphabet (GOOGL) ramp up spending on chips to power their artificial intelligence (AI) products, driving Nvidia's revenue and stock price to record levels.

William Blair analysts on Monday raised their revenue and profit estimates for Nvidia over the next two fiscal years, citing comments from recent earnings calls as tech executives said they expect to continue increasing spending on AI infrastructure over the next year.

-Aaron McDade

Trump Media Shares Jump to Start Election Day

With hours to go before polls close Tuesday (and some longer number of hours until Americans know who the next president will be) traders are betting on Trump—or, at least, his social-media company’s stock. 

Shares of Trump Media & Technology Group (DJT), the social media company that is majority owned by former President Donald Trump, were recently up 14%. The move extended a run of wild trading that in recent days has seen the Truth Social parent company’s shares and market value swing, often dramatically within a single day. 

There hasn’t been much in the way of specific news about the company—in the form of regulatory filings, press releases, or anything else—lately, but there has been plenty about Trump, the Republican nominee for president, and his opponent, Democratic Vice President Kamala Harris. 

The latest polls point toward a tight race between the candidates. On some prediction markets, meanwhile, the edge has lately shifted further toward Trump.

As for the bigger picture ahead of the decision: Here's Investopedia's latest on the state of the U.S. economy, and here are our collections of economic proposals from both Harris and Trump. Early voters considered the economy the key issue this year, according to one survey.

DJT stock, meanwhile, is trading around $40—well above recent lows near $12, but still substantially below early-2024 record levels around $80. 

-David Marino-Nachison

Astera Labs Soars Nearly 30% After Strong Quarterly Results

Astera Labs (ALAB) shares skyrocketed Tuesday morning, after the Nvidia (NVDA) supplier reported strong third-quarter results on the back of demand for its artificial intelligence (AI) products.

The company, which makes chip-based connectivity products to boost the efficiency of AI, reported quarterly revenue of $113.1 million, up 47% from the prior quarter and 206% year-over-year, while showing a net loss of $7.6 million, or 5 cents a share.

It also forecast fourth-quarter revenue of between $126 million and $130 million and earnings per share between 4 cents to 6 cents.

Astera, which went public in March, said in its initial public offering (IPO) filing that its customers include several key players in the AI space. Apart from Nvidia, they include Advanced Micro Devices (AMD) and Intel (INTC).

In a note released Monday, Jeffferies analysts said the company "looks to be firing on all cylinders heading into 2025." "Lots to love about this report with strength across a combination of products with demand from both NVDA and multiple AI ASIC platforms (likely AMZN & GOOG)," the broker said. Jefferies has given the stock a buy rating with a $69.65 price target.

The stock was up 28% at $89.25 in recent trading.

-Nisha Gopalan

Boeing Shares Rise as Strike Comes to an End

Boeing's (BA) shares rose in premarket trading Tuesday after machinists voted to approve a new contract, ending a crippling strike at the plane maker that has lasted nearly two months.

Members of the International Association of Machinists accepted an offer that included 38% pay increases, along with a ratification bonus that workers can elect to use as part of their retirement savings. The union rejected a previous offer from Boeing that included a 35% pay hike, extending the strike that began on Sept. 13.

The striking employees, whose absence had put production at a near-standstill, can return to work Wednesday "and must return by beginning of their shift on Nov. 12, 2024," according to the union and the company.

Boeing has been hit by a string of crises this year, starting in early January when a door plug detached during an Alaska Airlines (ALK) flight. The cash drain from the strike has led the jet maker to raise billions of dollars in funding.

CEO Kelly Ortberg has announced plans to lay off about 10% of its workforce, or 17,000 workers, "over the coming months" and is postponing the launch of Boeing's first 777x jetliner.

Shares were up nearly 2% about half an hour before the opening bell. Through Monday's close, the stock had lost 40% of its value since the start of the year.

-Nisha Gopalan

Palantir Price Levels to Watch After Post-Earnings Pop

Palantir (PLTR) shares soared in premarket trading Tuesday after the analytics software provider topped third-quarter estimates and lifted its full-year revenue outlook amid robust demand for its AI offerings.

The stock had consolidated within a broadening formation leading into the company's quarterly results, but bulls have successfully defended the pattern’s lower trendline, with trading volume registering its highest level since early October on Monday.

Investors should watch key overhead levels on Palantir's chart around $45 and $60, while also monitoring an important zone of support during periods of profit-taking between $41 and $38.

Palantir shares were up 14% at $47.25 in recent trading.

Read the full technical analysis piece here.

-Timothy Smith

Stock Futures Point to Higher Open for Major Indexes

Futures tied to the Dow Jones Industrial Average were up 0.1%.

S&P 500 futures were up 0.2%.

Nasdaq futures were up 0.4%.