Markets News, Mar. 5, 2024: Bitcoin Plummets From All-Time High; Tech Drags Down Indexes (2024)

Equity Indexes Wrap: Mag Seven (Minus Nvidia) Weighs on Indexes; Discount Retailers, Energy Gain

March 05, 2024 04:13 PM EST

The Dow

Walmart (WMT) gained 1.2% after competitor Target reported better-than-expected earnings.

Intel (INTC) led the index lower, falling 5.4%. It was followed by tech peers Salesforce (CRM), down 5%, and Microsoft (MSFT), down 3%. Amazon (AMZN) shed 2%.

Apple (AAPL) fell 2.8% after a report suggested iPhone sales in China fell 24% year-over-year in the first six weeks of the year.

The S&P 500

Target (TGT) soared 12% after its quarterly earnings topped Wall Street estimates.

Dialysis provider DaVita (DVA) gained 7.1% after data showed Novo Nordisk’s (NVO) Ozempic was a less effective treatment for kidney disease than analysts had expected.

Regional bank stocks advanced. Citizens Financial Group (CFG) rose 5.2%, Zions Bancorp (ZION) advanced 4.5%, and Comerica (CMA) gained 3.8%.

Nvidia (NVDA) was the only stock in the Magnificent Seven to rise on Tuesday. It rallied the last 30 minutes of the session to close 0.9% higher.

Albemarle (ALB) plummeted 17.9% after it announced a $1.75 billion depositary shares offering as it seeks to weather a prolonged slump in lithium demand and prices.

Meta Platforms (META) slipped 1.5% amid widespread Facebook, Instagram, and Threads outages.

Advanced Micro Devices (AMD) ticked down 0.1% after the Commerce Department said the chip maker would still need a license to sell to China a semiconductor that was specially designed to meet U.S. export controls.

The Nasdaq 100

Energy stocks advanced as investors shunned growth in favor of value. Baker Hughes (BKR) added 2.5% and Diamondback Energy (FANG) rose 0.7%.

Dollar Tree (DLTR) gained 1.8% after Guggenheim raised its price target to $170 from $155 and reiterated its buy rating.

The index’s highest-flying tech stocks were some of its largest losers on Tuesday. MongoDB (MDB), up more than 80% in the past year, fell 7.7% while CrowdStrike Holdings (CRWD), which has seen its share price more than double in the last 12 months, tumbled 5.2%.

Tesla (TSLA) fell 3.9% after a suspected arson forced it to halt production at its Berlin factory.

Starbucks (SBUX) dipped in the market sell-off even though a coalition of unions representing its workers withdrew its board nominees, citing progress in negotiations.

GitLab Stock Plunges After Issuing Disappointing FY Earnings Guidance

March 05, 2024 03:30 PM EST

GitLab (GTLB) shares plunged Tuesday after the software infrastructure company disappointed investors with weak full-year earnings guidance.

The San Francisco-based company, which operates an open-source repository development platform for coders, said it expects full-year fiscal 2025 adjusted earnings of between 19 and 23 cents per share, with the high end of that forecast coming in significantly below Wall Street’s modeling of 35 cents a share.

For the fiscal 2024 fourth quarter, ending Jan. 31, the company disclosed adjusted earnings of 15 cents per share on revenue of $163.8 million, surpassing analysts’ expectations of 8 cents a share on sales of $157.9 million.

GitLab shares have carved out a textbook inverse head and shoulders pattern over the past 18 months—a chart formation that often signals a market bottom. However, the price looks set to break down below the pattern’s neckline after the company’s disappointing earnings outlook.

Investors should keep an eye on the $57.50 level, which may find support from a trendline connecting the formation’s head and right shoulder. A close below the right shoulder would invalidate the pattern and could lead to a retest of the stock’s record low at $26.24 set in May last year.

GitLab shares were down 20.5% at $59.21 with about half an hour left in the session.

-Timothy Smith

Albemarle Tumbles on $1.75 Billion Depositary Shares Offering

March 05, 2024 02:43 PM EST

Shares of lithium miner Albemarle (ALB) plummeted Tuesday after the company said it would sell $1.75 billion of depositary shares in a public offering as it seeks to weather a prolonged slump in lithium prices.

Each depositary share will represent a 1/20th interest in a share of preferred stock, and holders of the depositary shares will be entitled to a proportional interest in the rights ofpreferred stockholders. The terms of the listing also give the offering's underwriters a 30-day option to purchase up to an additional $262.5 million of depositary shares.

Albemarle said it would use the proceeds for general business purposes, which could include funding the construction and expansion of operations in Australia and China.

Albemarle, one of the world’s largest lithium miners, has struggled with lower lithium prices over the last year amid a slowdown in demand for electric vehicles, which often contain lithium-ion batteries. Prices began plunging in November 2022 as EV demand flagged under the weight of higher interest rates, leading carmakers to scale back their EV ambitions.

On Tuesday, lithium carbonate traded in China at about 108,500 yuan ($15,076) per metric ton, down about 70% from a year ago. And experts see few signs of improvement. Goldman Sachs analysts on Tuesday forecast lithium prices would fall 25% in the next 12 months, suggesting they see lithium slipping as low as $10,000.

SoFi Slumps on Plan To Sell Up To $862.5 Million in Convertible Bonds

March 05, 2024 01:34 PM EST

Shares of SoFi Technologies (SOFI) tumbled 13% Tuesday, after the online financial services provider said it was planning to sell up to $862.5 million in convertible bonds.

Convertible bonds are a fixed-income corporate debt security that pay interest but can also be converted into a predetermined number of common stock or equity shares.SoFi's share price drop reflects the potential dilution to existing shareholders if the bonds are converted into stock, although SoFi said it will use part of the proceeds to pay for capped call transactions to limit that dilution.

Essentially, it means SoFi will be buying a form of call options on its own stock.

SoFi said it would be offering $750 million in convertible senior notes due in March 2029. In addition, initial investors will have the option to purchase another $112.5 million within a period of 13 days from when the notes are first issued.

SoFi shares were down 14.3% at $7.35 Tuesday afternoon, and are about 26% lower this year.

-Bill McColl

Dialysis Stocks Soar After Ozempic Kidney Disease Data Disappoints

March 05, 2024 12:50 PM EST

Shares of dialysis companies surged Tuesday after Novo Nordisk (NVO) reported results from a trial of Ozempic as a kidney disease treatment that fell short of some analysts’ expectations.

Novo Nordisk said on Tuesday that Ozempic reduced kidney disease progression and the odds of cardiovascular or kidney death by 24%. The trial, called FLOW, compared outcomes for 3,533 people with type 2 diabetes and chronic kidney disease, who were either given 1 mg injections of Ozempic or a placebo. The trial was ended last October, a year ahead of schedule after preliminary data demonstrated the drug’s efficacy.

The results add to a growing body of evidence that GLP-1 agonists, like Novo’s Ozempic and Wegovy and Eli Lilly’s (LLY) Mounjaro, have uses beyond diabetes treatment and weight loss. In August, Novo published data showing Wegovy reduced patients’ risk of major cardiovascular events by 20%.

The results, however, weren’t quite what analysts and investors were expecting. Novo Nordisk shares were down more than 2.7% Tuesday afternoon, while dialysis providers soared. DaVita (DVA) climbed 7% to $134, while Fresenius Medical Care (FMS) rose more than 11% to nearly $21.

Apple Stock Slips as China iPhone Sales Plunge 24% in First Six Weeks of Year

March 05, 2024 12:18 PM EST

Apple’s (AAPL) sales of iPhones in China, its biggest overseas market, fell by 24% over the first six weeks of this year, according to market research firm Counterpoint.

The data follows Apple's disclosure last month that its Greater China sales during the fiscal first quarter fell 13%.

The iPhone maker's market share in China fell to 16% in the first weeks of 2024, falling to fourth place from second place in 2023, when it had a 19% share. Chinese retail giants JD.com, TMall, and Pinduoduoare offering steep discounts on Apple's iPhone 15 just five months after launch to generate demand.

Apple shares were down 2.7% midday Tuesday. They have lost about 11% of their value so far this year.

-Fatima Attarwala

Tesla Stock Slides as Arson Halts Production at Berlin Plant

March 05, 2024 10:46 AM EST

Tesla (TSLA) shares slid in early trading on Tuesday after the electric vehicle maker was forced to halt production at its Berlin factory following an arson attack on a nearby electricity pylon.

The fire, which occurred in a field near Tesla’s Gigafactory Berlin-Brandenburg in Grünheide, cut off power to the plant and the surrounding area. The factory was evacuated and workers were sent home.

The attack comes amid local opposition to Tesla’s efforts to expand the factory, its only assembly plant in Europe. Tesla last July filed applications with local authorities to expand the plant, with plans to add a battery testing center and water treatment facilities. Tesla hopes the plant will eventually produce 1 million cars a year, about double its current output.

But it has run into resistance from locals and environmental activists. Late last month, Grünheide residents voted against Tesla’s planned expansion in a non-binding vote. And last week nearly 100 activists set up camp in a forest near the factory that Tesla intends to fell as part of its expansion.

Residents and activists have also expressed concern about the factory's water consumption and its potential to contaminate the region’s groundwater.

Tesla shares were down about 4.7% at $179.38 as of 10:45 a.m. ET Tuesday. They have lost nearly 28% of their value so far this year.

Target Stock Surges on Q4 Earnings Beat

March 05, 2024 10:12 AM EST

Target (TGT) shares surged in early trading Tuesday as the company posted stronger-than-expected earnings for the fourth quarter of fiscal 2023.

The retail giant reported net income of $1.38 billion, up 57.8% from the fourth quarter of 2022 and well above Target’s own guidance and analyst estimates compiled by Visible Alpha. Earnings per share (EPS) at $2.98 also surpassed estimates as revenue rose 1.7% from a year ago to $31.9 billion, beating projections.

The company said that the higher profit came in part as a result of lower costs and improved inventory management, and outlined plans to introduce a new membership program as part of its Target Circle rewards program.

Shares of Target were up 12.2% at $168.87 Tuesday morning. They’ve gained close to 18% so far this year.

-Aaron McDade

Stocks Making the Biggest Moves Premarket

March 05, 2024 09:18 AM EST

Gains:

• Target Corp. (TGT): Shares of the retailer jumped 8% after it reported fiscal fourth-quarter earnings of $2.98 a share, beating Wall Street’s consensus estimate of $2.41.
• Coinbase Global Inc. (COIN): Shares of the cryptocurrency exchange gained 2% as the price of Bitcoin rose above $68,000 to trade just shy of an all-time high.
• Newmont Corp. (NEM): Shares of the gold miner ticked up 1% as the price of gold continued to climb after hitting a record high yesterday.
  

Losses:

• Gitlab Inc. (GTLB): Shares of the coding collaboration platform tumbled 22% after it forecast full-year fiscal 2025 earnings of between 19 and 23 cents per share, far less than the 35 cents per share analysts were expecting.
• Tesla Inc. (TSLA): Shares of the electric vehicle maker fell about 3% after it stopped production at its plant outside Berlin amid a suspected arson attack that cut off power to the factory.
• Apple Inc. (AAPL): Shares of the tech giant slid about 2% amid reports iPhone sales in China were 24% lower in the first six weeks of the year than in 2023.

Stock Futures Slip in Premarket Trading

March 05, 2024 08:41 AM EST

Futures contracts connected to the Dow Jones Industrial Average were down about 0.3% in early trading on Tuesday.

S&P 500 futures were also off about 0.3%.

Nasdaq 100 futures traded 0.5% lower about an hour before markets opened.