Equity💧 Indexes Wrap: Lower Rate Expectations Lift Solar Stocks, Regionꦜal Banks While Sinking Health Care, Insurers

The Dow 

Caterpillar (CAT) led the index higher, jumped 6.4%.

Goldman Sachs (GS) jumped 5.7% to a nearly two-year high. Financials outperformed Thursday, with the sector gaining 0.8%. American Express (AXP) rose 2.5% and JPMorgan Chase (JPM) rose 1.9%.

Chevron (CVX) gain🐎ed 3.7% as oil prices surged more than 3%. 

Intel (INTC) rose 1.4% after it 澳洲幸运5官方开奖结果体彩网:unveiled a line of AI chips meant to boost the co꧑mpany’s profile amid the AI boom. 

Disney (DIS) shares rose 1.2% as Trian Fund Management, which relaunched a proxy battle with the entertainment giant last 𒊎month, said it would nominate activist investor and CEO Nelson Peltz and former Disney CFO Jay Rasulo to the company’s board.

Health care was one of the day’s worst-performing sectors. UnitedHealth Group (UNH) sank 2.6%, while Amgen (AMGN) lost 1.9% and Merck & Co. (MRK) slipped 0.4%. 

Visa (V) retreated 1.3% after closing at a record high yesterday.

The S&P 500

SolarEdge (SEDG) led the index higher, rising 16.6% followed closely behind by fellow solar stock Enphase Energy (ENPH), up 11.7%. First Solar (FSLR) climbed 8%. Rate-sensitive solar and green tech stocks have been given a little breathing room by the Federal Reserve’s forecast of 💞several rate cuts in 2024. 

Regional bank stocks also soared on expectations for rate cuts, as lower Treasury yields eased some pressure on banks’ investment portfolios. Zions Bancorp (ZION) gained 9.2%, while Fifth Third Bancorp (FITB) and Comerica (CMA) each rose more than 8%. 

Big banks got in on the action too, with Morgan Stanley (MS) climbing 6.3% and Bank of America (BAC) rising 5.6%.

Homebuilders Pultegroup (PHM) and Lennar (LEN) rose 7.1% and 6.7%, respectively, as average mortgage rates 澳洲幸运5官方开奖结果体彩网:fell to their lowest since August. 

Insurance companies, which generate revenue from interest-bearing investments, significantly underperformed on expectations for lower rates next year. Arthur J. Gallagher (AJG) lost 7.4%. Brown & Brown (BRO) and Marsh & McLennan (MMC) both fell more than 5%. Progressive (PGR) fell 4.4%. 

Drug distributors Cardinal Health (CAH) and McKesson (MCK) dropped 5% and 4.1%, respectively, as part of a lagging health care sector. 

The Nasdaq-100

Lucid Group (LCID) jumped 14.5% as investors embraced the year’s laggards. Even with Thursday’s gains, the luxury electric vehicle maker’s shares were down about 25% 🔜year-to🌱-date.

Moderna (MRNA) rose 9.3% after 澳洲幸运5官方开奖结果体彩网:it reported positive results from a mid-stage trial of its pers𓆏onal﷽ized skin cancer vaccine. 

Semiconductor stocks jumped, led by Onsemi (ON), up 6.4%, and NXP Semiconductors (NXP), up 5.1%. 

Adobe (ADBE) lost 6.3% after it 澳洲幸运5官方开奖结果体彩网:issued 2024 earnings guidance that fell short of analysts’ estimates and warned it could ꧋face fines from federal regulators.

Moderna-Merck Vaccine for Skin Cancer Shows Positive Results; 🌌Moderna Stock Jumps

A personalized vaccine developed by Moderna (MRNA) and Merck (MRK) showed significant positive results in treatingꦏ skin cancer in high-risk patients.

The companies indicated the shot, which worked in combination with Merck’s Keytruda cancer drug, demonstrated in a Phase 2b trial “a clinically meaningful improvement in recurrence-free survival (RFS), reducing the risk of recurrence or death by 49%,” as compared to taking Keytruda alone.

The tꦓwo drug makers have already initiated a Phase 3 study of the therapy.

Moderna sh🐓ares were up 8% Thursday afternoon, while Merck shares w🔯ere down 0.9%.

-Bill McColl

Regional Banks Jump to Near Pre-Baℱnk-Crisis Levels with Rate Cuts on the Horizon

Regional bank stocks soared Thu🐼rsday after Federal Reserve officials forecast they’ll be able to cut interest rates more than previously expected next year.

According to the Fed’s latest Summary of Economic Projections, officials expect to cut interest rates by 75 basis points next year, bringing the federal funds rate down to a range of 4.5% to 4.75% from today’s range of 5.25% to 5.5%. The last time officials 澳洲幸运5官方开奖结果体彩网:estimated the course of monetary pol🍌icy, in September, they forecast cutting rates to a range of 5% to 5.25% from a peak rate between 5.5% and 5.75%.

That sparked a rally i🍎n bond markets, sending Treasury yields plummeting. The yield on the 10-year Treasury, which affects interest rates across the economy, tumbled to a five-month low below 4% Wednesday and continued to fall Thursday. 

Soaring yields were at the heart of this year’s regional banking crisis. As the Federal Reserve set out on its campaign of interest rate hikes in March 2022, the value of existing bonds was steadily eroded by the issuance of debt paying higher interest. That trimmed the value of banks’ bond holdings, which led 澳洲幸运5官方开奖结果体彩网:Silicon Valley Bank to record a $1.8 billion loss on its portfolio, spooking depositors and triggering the 澳洲幸运5官方开奖结果体彩网:run on deposits that broke the bank. Two other major banks, First Republic and Signature Bank, failed over the Spring for similar🃏 reasons. 

The crisis shook inv﷽estors’ confidence in regional banks’ balance sheets. Their stocks tanked and have been recovering ever since. 

Zions Bancorp (ZION) rose nearly 9% Thursday, while Regions Financial (RF) and Citizens Financial (CFG) gained more than 7% each. The iShares U.S. Reg🧔ional Banks ETF, which fell 25% in three days in mid-March, jumped 5% Thursday to trade at its highest level since March 9, the day before SVB was shuttered by federal regulators.

Adobe Tumbles After Reporting Q4 Results That Beat Estimates—Here's Why

Adobe (ADBE) 澳洲幸运5官方开奖结果体彩网:shares plunged over 6% Thursday after reporting fiscal fourth-quarter earnings that beat estimates, but its guidance missed expectations and the software company warned about potential fines from U.S. ꦰregulators.

The maker of Photoshop, Illustrator, and other programs said it expects 2024 澳洲幸运5官方开奖结果体彩网:earnings per share (EPS) in a range of $17.60 to $18. Analysts had anticipated $18 per share. It projects revenue of $23.5 billion to $25.5 billion, while estimates called for $27.5 billion.

In the fourth quarter, Adobe posted EPS of $4.27, with revenue up 12% from a year ago to a record $5.05 billion. Boꦬth exceeded forecasts.

Despite Thursday's decline, shares of Adobe have added close to three-quarters of their value this year.

-Bill McColl

Rivian Shares Gain o💃n AT&T Fꦦleet Electrification Pilot Program

Rivian (RIVN) shares jumped 9% Thursday after it signed a deal with AT&T (T) to supply the telecom giant 𒉰with electric vehicles, Rivian’s first new contract in over four years.

AT&T will add an unspecified number of Rivian’s commercial vans and R1 vehicles to its fleet in early 2024. As part of the deal, Rivian will make AT&T its exclusive connectivity provider, using the AT&T network to release over-the-air software updates. 

AT&T is Rivian’s first commercial client since it signed an exclusive deal in 2019 to supply Amazon with 100,000 custom delivery vans. Rivian and Amazon ended the exclusivity of that contract in November of this year, opening the door for Rivian to sell the vans, which it developed in partnership with Amazon, to other companies.

Rivian shares rose to their highest level in more than a mon🧜th, while AT&T shares rose 1.6% 

Intel Shares Rise on New AI Chips

Shares of Intel (INTC) rose after 🔯澳洲幸运5官方开奖结果体彩网:the chipmaker unveiled a line of chips designed to run ar🅰tificial intelligence (AI) programs as the company chases the AI craze that’s had markets buzzing all year. 

Intel launched the Core Ultra, an AI chip for the personal computer market. The company forecast AI PCs, which it called “the largest transformation of the PC experience in 20 years,” would make up 80% of the PC market by 2028. 

The company also launched Xeon processors containജing AI accelerators to improve the efficiency of data centers and cloud networks running AI applications. And CEO Pat Gelsinger previewed Gaudi3, the company’s improved AI accelerator that it expects to launch next year.  

According to the company, major clients already using its AI chips include International Business Machines (IBM) and Alphabet (GOOGL).

Intel shares jumped to trade as much as 5.5% higher T💯hursday mor൲ning before giving up some gains.

Solar Stocks Rebound on Forecast Rates Cuts

Solar stocks were some of the S&P 500’s best performers early Thursday as markets prepared for the Federal Reser🍸ve to start cutting interest rates next year𒀰. 

Fed officials expect to cut rates three times next year, according to the 澳洲幸运5官方开奖结果体彩网:Federal Open Market Comm🍬ittees (FOMC) summary of economic projections. That would lower interest rates by 75 basis points from today's 22-year highs.

Solar and other renewable energy companies are especially interest rate sensitive because they carry large ꧃debt loads. Infrastructure projects that rely on financing are made more expensive ꦍby higher borrowing costs. 

At the same time, higher interest rates increase the returns of low-risk investments like bonds and cash equivalents, making them more attractive relative to high-risk 澳洲幸运5官方开奖结果体彩网:growth stocks. 

Enphase Energy (ENPH), which has seen its stock price decline 55% so far this year, jumped 10% Thursday morning. SolarEdge (SEDG), down 69% year-to-date, rose 9%. First Solar (FSLR), which has avoided this year’s clean energy rout and is ꦐ🧸up 4% for the year, climbed 7%. 

Stocks Making the Biggest Moves Premarket

Gains:

• Moderna Inc. (MRNA): Shares of the vaccine maker jumped more than 10% after it said a vaccine co-developed with Merck (MRK) significantly reduced skin cancer patients’ likelihood of their cancer recurring.
• UBS Group AG (UBS): Shares of the Swiss bank rose about 3% following reports it was attempting to claw back hundreds of millions of dollars in bonuses that Credit Suisse paid to bankers in 2022 and 2023 to retain employees as its troubles piled up. 
• Occidental Petroleum (OXY): Shares gained more than 2% after Warren Buffett’s Berkshire Hathaway upped its stake in the oil company following its proposed 澳洲幸运5官方开奖结果体彩网:$1꧒2 billion acquisition of CrownRo♛ck. 
  

Losses:

• Adobe Inc. (ADBE): Shares of the design software company slid 4% after its 2024 earnings forecast missed analysts’ estimates. 
• Nucor Corp. (NUE): The steelmaker’s shares fell about 1% after its current-quarter guidance also fell short of Wall Street’s estimates. 

Stock Futuresဣ Up as Markets Carry Fed Boost Into a Second Session

Futures contr🌠acts connected to the Dow Jones Industrial Average were💫 up 0.2% in premarket trading.

S&P 500 contracts also rose about 0.2%.

Nasdaq-100 futures gained 0.3%.