Stocks wobble after key data as Micron slips

US stocks faltered on Thursday after the outlook for chipmaker Micron (MU) dented hopes for a tech rebound, as investors weighed new economic data ahead of a policy-critical inflation reading. Federal Reserve.

The S&P 500 (^GSPC) was little changed after rising Wednesday to close close to a new all-time high. The Dow Jones Industrial Average (^DJI) hovered around the flat line, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.1%.

Stocks are struggling following Micron’s current quarter sales guidance, which met expectations but failed to satisfy investors looking for exceptional outperformance from AI-related companies .

Optimism around AI has helped lift the benchmark S&P 500 to a 15% gain this year. But concerns are growing that the recovery could be at risk if the handful of technology companies behind most of these gains stop beating already high expectations.

Shares of memory maker Micron fell more than 4% in early trading. Nvidia (NVDA) was down about 1%, reviving concerns of a return to the sell-off that shook markets last week.

Investors were studying a new batch of economic data ahead of Friday’s PCE inflation release, which will influence the Fed’s thinking on the timing of interest rate cuts.

The figure for first weekly unemployment registrations stands at 233,000, a drop of 6,000 compared to the previous week, according to data from the Ministry of Labor. The result is below consensus expectations of 235,000. But recurring jobless claims reached their highest level since the end of 2021, suggesting that it is taking longer for the unemployed to find work.

Real gross domestic product (GDP) grew at an annual rate of 1.4% in the first quarter of 2024, according to the Economic Development Bureau’s third estimate released Thursday morning. The figure was slightly higher than the previous estimate of 1.3%.

Inflation could also play a big role in the first debate between President Joe Biden and former President Donald Trump on Thursday night.

On the corporate front, shares of Levi Strauss (LEVI) fell more than 15% after the jeans retailer missed earnings in the second quarter. Investors will look to Nike (NKE)’s quarterly results after the bell for more clues about consumer resilience.

Live5 updates

  • Pending Home Sales Fall in May

    High real estate prices and high mortgages are driving potential buyers away from the real estate market.

    Pending home sales — a forward-looking indicator of home sales based on contract signings — fell 2.1% in May from the previous month, according to data from the National Association of Realtors. Over one year, they fell by 6.6%, according to data published Thursday.

    The Midwest and South saw a decline in contract signings in May compared to the previous month. The Northeast and West saw gains. All regions of the country recorded business losses on an annual basis.

    “The market is at an interesting point with rising inventories and falling demand,” Lawrence Yun, NAR’s chief economist, said in a statement. “Movements in supply and demand suggest a slowdown in house price appreciation in the coming months. Inevitably, more inventory in a job-creating economy will lead to increased home purchases, especially when mortgage rates fall.

    Mortgage rates are at their lowest average level in three months, but that’s still not enough to attract buyers. About 95% of mortgage borrowers have interest rates below current market rates, and nearly 80% have rates more than 2 percentage points below market rates, according to data from Goldman Sachs.

    Looking ahead, Yun expects “moderately lower mortgage rates, rising home sales, and stabilizing home prices.”

  • Walgreens Falls 24% Following Lower Guidance Due to ‘Challenging’ Pharma Trends, Weak Consumer

    Walgreens stock fell 24% to its lowest level since 1997 after the drugstore chain lowered its profit forecast for fiscal 2024, citing “challenging trends in the pharmaceutical sector and a U.S. consumer environment worse than expected.”

    “Our customers have become increasingly selective and price sensitive in their purchases,” Tim Wentworth, CEO of Walgreens Boots Alliance, said during the company’s earnings conference call Thursday morning.

    Management indicated that 25% of the company’s stores are not currently contributing to the long-term strategy and that “changes are imminent.”

    Walgreens has announced plans to close a “significant portion” of its underperforming stores over the next three years.

    It expects adjusted earnings per share for the year to be between $2.80 and $2.95, down from its previous forecast of $3.20 to $3.35.

  • Netflix and Meta help Nasdaq enter green territory

    Communications stocks propelled the Nasdaq Composite (^IXIC) into positive territory with a 0.3% rise shortly after the market opened Thursday.

    Netflix (NFLX) and Meta (META) both rose more than 1%, helping to raise the tech gauge that had fallen just below the flat line.

    The S&P 500 (^GSPC) rose 0.2%, while the Dow Jones Industrial Average (^DJI) was little changed.

    Meanwhile, shares of chip giant Nvidia (NVDA) were down slightly after sales forecasts from Micron (MU) failed to excite investors about the AI ​​craze that has fueled the broader market recovery this year.

  • Stocks wobble at open as investors weigh economic data, Micron puts brakes on tech rally

    Stocks opened slightly lower Thursday as investors assessed economic data released before the bell.

    The S&P 500 (^GSPC) was little changed, while the Dow Jones Industrial Average (^DJI) slipped 0.1%. The tech-heavy Nasdaq Composite (^IXIC) fell just below the flat line.

    Real gross domestic product (GDP) grew at an annual rate of 1.4% in the first quarter of 2024, according to the Economic Development Bureau’s third estimate released Thursday morning. The figure was slightly higher than the previous figure of 1.3%, but still showed the slowest growth since 2022.

    The initial number of weekly applications for unemployment benefits stood at 233,000, a decrease of 6,000 from the previous week, according to Labor Department data.

    On the corporate side, Chipmaker Micron’s (MU) sales guidance for the current quarter met expectations but failed to satisfy investors looking for exceptional outperformance from technology-related companies. ‘AI. The stock fell about 4% in early trading. AI chip giant Nvidia (NVDA) also fell nearly 1% at the open.

  • Why does Levi’s bother me?

    Levi’s (LEVI) shares were hit hard, falling 15% in pre-market trading following the release of their results.

    And I think it’s deserved for two reasons.

    First, sales in China fell 10% from the previous year. I have spoken recently with quite a few people who have recently visited China. One theme is that Chinese consumers are feeling pessimistic and not spending like in years past. This mood is impacting demand for Levi’s jeans, Starbucks (SBUX) coffee, and — according to General Mills’ (GIS) earnings call yesterday — Haagen Dazs ice cream.

    It is difficult to see the inflection point in China.

    The same goes for the Levi’s wholesale business or one that sells to department stores. Sales fell 4% from the previous year. The company’s commentary suggests that wholesale demand may not turn around until 2025.

    I plan to raise some of my concerns with Levi’s CFO Harmit Singh today at 10:30 a.m. ET on Yahoo Finance. To agree!