Market News, August 13, 2024: S&P 500 and Nasdaq close higher for fourth straight session, led by tech rally

The S&P 500’s biggest moves on Tuesday

3 hours 37 minutes ago

Moving forward

• Starbucks (SBUX) stock was the best performer in the S&P 500, up 24.5% after the coffee giant announced it had hired Chipotle (CMG) CEO Brian Niccol as its new CEO. The executive shakeup came amid pressure from activist investors Elliott Investment Management and Starboard Value. The two have reportedly acquired positions in Starbucks and pushed for leadership changes.
• Actions of Estée Lauder (EL) rose 6.6% ahead of the makeup maker’s next earnings report, due out next Monday. Analysts expect the cosmetics company to post year-over-year revenue and earnings per share (EPS) growth for its fiscal fourth quarter. Tuesday’s gains came as Citi analysts reiterated their “buy” rating and price target for Estee Lauder shares, following a survey of investor expectations and data collection from the company’s cosmetics industry peers.
• Nvidia NVDA shares rose 6.5% on Tuesday, extending gains posted in the previous session. The rise comes amid reports that delays to the chipmaker’s Blackwell artificial intelligence (AI) processor may be less significant than previously anticipated. Estimates in early August warned that the launch of the next-generation semiconductors could be delayed by as much as three months, but UBS analysts wrote in a note to clients this week that the long-awaited processors may be delayed by just four to six weeks.

Declining

• Actions of Baxter International (BAX) fell 6.6% after the medical technology company said it would sell its kidney treatment division to private equity firm The Carlyle Group (CG). Carlyle will pay $3.8 billion in cash for the unit, which will be called Vantive after the transaction. Carlyle shares rose 2.4% following the announcement.
• Crude oil prices fell after the International Energy Agency (IEA) cut its oil demand forecast for 2025, pointing to slower economic growth in China. Lower commodity prices weighed on oil and gas stocks. Valero Energy (VLO), Western Oil (OXY), and Diamondback Energy (FANG) fell around 2.6%.

–Michael Bromberg

The most important action of the year

3 h 55 min ago

Shares of Nvidia (NVDA) gained more than 6% on Tuesday and were called the “most important stock” of the year by Goldman Sachs strategist Scott Rubner.

Rubner suggested that the chipmaker’s earnings later this month and the Federal Reserve’s Jackson Hole Economic Symposium could herald a rally in the stock market.

Nvidia reports earnings on Aug. 28, and the strategist expects an earnings-driven post-market move could potentially mark “the technical bottom for the index’s biggest weights and AI favorites,” before a rebound in September.

Rubner said the market could be primed for a rally into Labor Day, leaving “a short-term window to buy the dip as technical pressure eases.”

Nvidia has been in a volatile phase over the past month, but has gained 17% in the last four sessions.

–Naomi Buchanan

How Starbucks stock has fared under its CEO leadership

4 h 56 min ago

Starbucks (SBUX) stock has been through some tough times in recent years, especially under former CEO Laxman Narasimhan, who was ousted Tuesday and will be replaced by Chipotle CEO Brian Niccol.

News of Niccol’s appointment sent Starbucks shares up 25% and into positive territory for 2024.

Since going public in 1992, Starbucks has had five CEOs, with founder Howard Schultz taking the reins three times.

Starbucks shares fell 6% during Narasimhan’s tenure of just over a year. Previous CEOs have also endured volatile stock performance.

Read the full article here.

–nisha gopalan

Nike shares regain ground

5 h 41 min ago

Nike (NKE) shares were among the best performers in the S&P 500 after a Bernstein Research analyst reiterated a “buy” rating on the stock along with a $112 price target.

The company’s shares rose 5% on Tuesday evening. However, that gain leaves the stock more than 16% below its close on June 27, just before it announced disappointing fiscal fourth-quarter results, and it is down nearly 30% this year.

Bernstein’s Aneesha Sherman is bullish on Nike: Her $112 target is higher than any of the 20 analysts tracked by Visible Alpha (the list does not include Bernstein). Of those 20 analysts, half have “buy” ratings on the sportswear giant.

–Andrew Kessel

Sneaker maker remains on the up as sales rise

7 h 39 min ago

High-end sneaker maker On Holding (ONON) posted record sales on Tuesday thanks to strong demand in the Asia-Pacific region and its pricing power.

The Swiss-based company reported that its second-quarter revenue rose 28.7% year-over-year in constant currencies to an all-time high of CHF 567.7 million ($655.9 million), beating expectations. EPS of CHF 0.09 ($0.10) was below forecasts.

Sales soared by 73.7% in the Asia-Pacific market, 24.8% in the Americas and 21.8% in Europe, the Middle East and Africa. Direct-to-consumer sales increased by 28.1%.

The company said its “continued high share of full-price sales as well as lower freight rates” helped boost gross profit margin to 59.9% from 59.5% a year ago.

Shares rose 8% and were trading near their highest level since late 2021.

–Bill McColl

Baxter shares fall after sale of its renal division

9 h 13 min ago

Shares of Baxter International (BAX) fell on Tuesday after the company said it would sell its kidney treatment division to The Carlyle Group (CG) for $3.8 billion in cash.

The deal is expected to generate about $3 billion in after-tax proceeds and close in early 2025. Baxter said it plans to use the proceeds to reduce its debt.

Baxter shares recently fell more than 6% in early afternoon trading, making them one of the biggest decliners in the S&P 500. Carlyle shares rose about 2%.

–Andrew Kessel

What to expect from Google’s launch event

10 h 48 min ago

Alphabet’s Google (GOOGL) will hold its annual Made By Google launch event on Tuesday, where it will unveil the next generation of Pixel smartphones and provide updates on how it’s integrating artificial intelligence into its devices with Gemini.

Mizuho analysts said the event could be the “next catalyst” for Alphabet shares.

The company said it will usher in a “new era of phones” with the Pixel 9 Pro and Pixel 9 Pro Fold. The new devices will be powered by AI capabilities from Google’s Gemini AI model.

The new devices could help Google better compete with Apple’s (AAPL) upcoming iPhone 16 equipped with Apple Intelligence.

Alphabet shares rose 0.8% to $163.51 in late trading. The stock has gained 16% so far in 2024, though it is down sharply from its July high of $191.75 amid a broader tech downturn.

Read the full preview here.

–Naomi Buchanan

Starbucks soars after company names Chipotle boss as CEO

11 h 39 min ago

Starbucks (SBUX) shares soared in early trading Tuesday after the coffee giant announced the hiring of Chipotle Mexican Grill (CMG) boss Brian Niccol as its new CEO, replacing Laxman Narasimhan, who is leaving immediately.

Niccol will take over the role effective Sept. 9, with Starbucks CFO Rachel Ruggeri taking over as interim CEO over the next month. Meanwhile, Chipotle has tapped COO Scott Boatwright to serve as interim CEO once Niccol leaves her post at the end of the month.

Starbucks has faced pressure to make changes in recent weeks as reports emerged that a pair of activist investors, Elliott Investment Management and Starboard Value, have bought stakes in the coffee chain.

The funds have not publicly stated their goals, but reports indicate Starbucks has spoken with Elliott about ideas to boost the company’s sales and stock. Starbucks’ recent earnings reports have been disappointing, with same-store sales declining as consumers cut back on discretionary spending.

Starbucks shares rose 20% while Chipotle shares fell more than 12% about a half-hour after the opening bell.

–Aaron McDade

Futures linked to major indexes rise

13 h 20 min ago

Futures tied to the Dow Jones Industrial Average rose slightly.

S&P 500 futures rose 0.2%.

Nasdaq 100 futures rose 0.4%.