Dow Jones Today: Stocks Climb, Yields Jump Following Inflation Data (2024)

Southwest and American Airlines Give Guidance Warnings, Shares Plummet

10 minutes ago

Shares of Southwest Airlines (LUV) and American Airlines Group (AAL) fell Tuesday as problems with Boeing (BA) jet deliveries and higher fuel prices, respectively, are expected to affect their results.

Southwest announced that it will have to cut capacity and reduce its outlook because it will receive fewer Boeing jets than anticipated this year. Southwest explained that the plane maker, which is the airline's sole supplier, has advised the carrier that it should anticipate delivery of 46 737 Max 8 planes, 12 fewer than originally planned.

The Boeing situation led the carrier to write in a regulatory filing that it is “reevaluating all prior full year 2024 guidance, including the expectation for capital spending,“and plans to give an update in its first-quarter earnings release April 25.

For American, the issue is the cost of jet fuel. The airline warned that its current-quarter adjusted loss would be at “the low end” of its previous forecast of a decline of $0.15 to $0.35 per share. American said fuel prices “have increased considerably since the Company’s initial first-quarter guidance issued on January 25, 2024.”

Southwest Airlines was the worst-performing stock in the S&P 500 early Tuesday afternoon, down 14.5% to $28.85. American Airlines (down 4.3%) and Boeing (down 4.4%) were also near the top of the list of big decliners.

-Bill McColl

Kohl's Posts Earnings Beat, But Forecasts Declining Profit This Year

45 minutes ago

Kohl's (KSS) shares slipped Tuesday despite the department-store chain releasing holiday-quarter results that beat analysts' profit expectations.

Kohl's posted a fiscal fourth-quarter profit of $186 million, or earnings per share (EPS) of $1.67, exceeding analyst estimates compiled by Visible Alpha. The figures were also well above those in the fourth quarter of the 2022 fiscal year, when Kohl's posted a loss of $273 million or $2.49 a share.

This marks the fourth consecutive quarter that Kohl's has beat analysts' EPS estimates after a turbulent ending to 2022, including a sudden CEO departure. Kohl's posted a $317 million profit for the full 2023 fiscal year, or $2.85 a share.

This year, however, may be less profitable. The retailer forecast net sales would range from adecrease of 1% to an increase of 1%, while full-year EPS would fall in a range of $2.10 to $2.70.

Kohl's shares were down 2.7% at $26.47 midday Tuesday. The stock is down about 7% so far in 2024, but up 6% in the last 12 months.

-Aaron McDade

Advance Auto Parts Gains as Activist Hedge Fund Third Point Takes Stake, Adds Directors

1 hr 35 min ago

Automotive aftermarket parts provider Advance Auto Parts Inc.'s (AAP) shares rose in early trading on Tuesday afterDan Loeb’sactivist hedge fundThird Point LLC disclosed a stake and added three new directors to its board on Monday.

Third Point has teamed up with Saddle Point L.P., run by former Pershing Square Capital Management partner Roy Katzovicz, to take the position in the Raleigh, N.C.-based company, Advance Auto Parts said in a statement Monday.

The three directors appointed to the board are A. Brent Windom, Gregory L. Smith, and Thomas W. Seboldt. The company'sboardtemporarily will expand to 12 directors with the new appointments.

Advance Auto Parts' stock jumped 4% to $78.83, its highest price this year, on Tuesday.

-Fatima Attarwala

Oracle Stock Jumps After Earnings Report Shows AI-Related Gains

2 hr 18 min ago

Oracle (ORCL)was the best-performing stock in the S&P 500 Tuesday morning after the company reported results that beat analysts' expectations and showcased its position to gain as enterprise cloud customers integrate artificial intelligence (AI) tech.

The company reported third-quarter revenuefor the 2024fiscal yearof $13.3 billion, landing slightly above analyst estimates compiled by Visible Alpha and showing a 7% year-over-year gain.

Oracle's net income for the quarter was$4billion, surpassing analyst estimates and up from the previous quarter and year-ago period.Earnings per share (EPS) at $1.41 exceeded analysts' expectations and rose 16% from the previous year.

Oracle shares surged over 11% to $127 Tuesday morning. The stock has gained about 50% of its value over the past year.

-Naomi Buchanan

Bank of America Ups 2024 S&P 500 EPS Forecast

2 hr 53 min ago

Bank of America on Tuesday raised its estimate for S&P 500 profit to a Street high.

The bank upped its 2024 S&P 500 earnings per share estimate to $250 from $235, representing a 12% increase from 2023. BofA also introduced its 2025 EPS at $275.

The analysts upped their EPS estimate as BofA economists raised their U.S. GDP forecast. They see the U.S. economy expanding by 2.7% in 2024, nearly double their 1.4% estimate made in November.

Companies have adjusted to last year’s higher rates and tepid demand, argue analysts led by Ohsung Kwon. “The next leg of growth comes from the top line," they wrote.

And it wouldn't be 2024 without a mention of artificial intelligence. BofA sees "a virtuous cycle forming” from AI investments. Hyperscalers, including Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Meta (META), are expected to increase capital expenditures by 27% year-over-year in 2024.

"Semis and networking are the most obvious beneficiaries,” of this investment, Kwon said, “but increased power usage and the physical build-out of data centers will lead to more demand for electrification, utilities, commodities, etc. Productivity gains from AI and domestic investments are also a major tailwind."

-Christiana Sciaudone

Stocks Making the Biggest Moves Premarket

3 hr 27 min ago

Gains:

• Oracle Corp. (ORCL): Shares of the software company surged more than 11% after it reported better-than-expected earnings on strong demand for its AI products.
• 3M Co. (MMM): Shares of the industrial conglomerate rose more than 6% after it appointed former L3Harris chief William M. Brown as its new CEO.
• Carvana Co. (CVNA): Shares of the online used car retailer rose more than 3% after analysts at Jefferies upgraded the stock to hold and raised their price target to $85 from $30.
  

Losses:

• Southwest Airlines Co. (LUV): Shares of the low-cost carrier tumbled 8% after it cut its 2024 capacity forecast, citing delays from plane manufacturer Boeing (BA), shares of which were down about 2% premarket.
• American Airlines Group Inc. (AAL): Shares of the airline fell almost 4% after it warned its first-quarter loss would be at the low end of guidance offered in January due to a material increase in fuel costs.
• Kohl’s Corp. (KSS): Shares of the department store chain fell more than 3% after its quarterly revenue fell short of Wall Street estimates, as did its current-quarter guidance.

February Inflation Hotter Than Economists Predicted—Again

4 hr 5 min ago

Inflation was stickier than expected for a second month in a row.

The Consumer Price Index showed prices rose 3.2% over the previous 12 months in February, more than January's annual rate of 3.1%. "Core” inflation, which excludes volatile prices for food and energy, declined to 3.8%, down from 3.9% in January. Both numbers were slightly more than economists expected, according to a survey by Dow Jones Newswires and theWall Street Journal.

Prices rose 0.4% over the month, an acceleration from the 0.3% monthly increase in January.

Investors also saw the report as news that might delay the Federal Reserve's awaited rate cuts. Just before the release, they were pricing in a 60.8% chance the first rate cut would come in June, according to CME's FedWatch Tool, which forecasts interest rate movements based on fed funds futures trading data. Immediately following the release of the inflation report, that fell to 58.4%.

-Diccon Hyatt and Taylor Tompkins

Stock Futures Tick Up Ahead of CPI

4 hr 28 min ago

Futures contracts connected to the Dow Jones Industrial Average were little changed from Monday's close.

S&P 500 futures ticked up 0.2%.

Nasdaq 100 futures were 0.4% higher about an hour before markets opened.