Technology stocks rose on Wednesday, outperforming the broader market, as investors welcomed Tesla's (TSLA) promises of cheaper cars and awaited the next surge in company earnings.
The Nasdaq Composite (^IXIC) rose by around 0.6%, recording a significant closing gain. The S&P 500 (^GSPC) rose 0.2%, extending its recovery from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Shares of Tesla rose nearly 12% after the electric vehicle maker's promise to speed up the rollout of more affordable models dwarfed quarterly profit and sales declines. That reassured investors who were worried about growth amid a strategy shift toward robotaxis and the planned discontinuation of a cheaper model.
The results of the first “Magnificent Seven” to be released have boosted already high hopes for Big Tech's earnings that the megacaps can revive the stock rally they have driven. The focus now is on Meta (META)'s after-hours report, as the Facebook owner's shares rose after the Senate voted to potentially ban rival TikTok. Next up on Thursday are Microsoft (MSFT) and Alphabet (GOOG).
Meanwhile, Boeing (BA) reported better-than-expected first-quarter results before the opening bell, with a per-share loss of $1.13, less than Wall Street's $1.72 estimate. Shares rose about 2% in morning trading.
live6 updates
- Wednesday, April 24, 2024, 8:35 a.m. CDT
Tech leads on offense
Technology stocks rose on Wednesday, outperforming the broader market, as investors welcomed Tesla's (TSLA) promises of cheaper cars and awaited the next surge in company earnings.
The Nasdaq Composite (^IXIC) rose by around 0.6%, recording a significant closing gain. The S&P 500 (^GSPC) rose 0.2%, extending its recovery from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Wednesday, April 24, 2024, 6:50 a.m. CDT
Just on the phone: Judy Marks, CEO of Otis
Many in the Yahoo Finance newsroom know that I enjoy reading about elevator and escalator maker Otis Worldwide (OTIS) – I'm fascinated by what the company makes, how it makes it, and what it all says about the health of the global economy .
I just got off the phone with Judy Marks, CEO of Otis. Her comments about China – following her March trip to the country (an important market for Otis) – left an impression:
“The message from the Chinese government is: We want economic development. We want foreign direct investment. We will be celebrating our 40th anniversary in China this year and it is an important market for us, but we have been watching how the market is evolving and some of the challenges in the real estate market and I would tell you that the Real estate market and the market for new equipment remain weak. Sales for the top 50 developers fell almost 50% this quarter compared to the same quarter last year. So on the equipment side, we think the market is down in the high single digits to 10% for the year.
Marks doesn't expect Otis' China business to return to growth in 2024.
Wednesday, April 24, 2024, 6:21 a.m. CDT
Hilton continues to buy back his company
Hilton (HLT) continues to be one of the most aggressive buyers of its stock among the tons of companies I follow closely.
In many ways, it almost feels like Hilton is going private again! The hotel and resort company went public again in 2013 after being purchased by Blackstone in 2007.)
This from the company's just-released earnings report:
“During the three months ended March 31, 2024, Hilton repurchased 3.4 million shares of common stock at an average price per share of $196.17 for a total of $662 million and issued $701 million during the quarter, including dividends -Dollar capital returned to shareholders The number of shares outstanding was 250.0 million as of April 19, 2024.”
For comparison: Hilton ended 2022 with a share count of 277 million.
Wednesday, April 24, 2024, 6:03 a.m. CDT
Toy manufacturers' income doesn't come from fun
It's not a game, the profits of the major toy manufacturers Mattel (MAT) and Hasbro (HAS) are not exactly pleasant to see.
Not exactly a great earnings report from Mattel last night – now it says the company will see revenue growth again in 2025. Mattel is unique in that the Barbie movie really increased its results last year, so mathematically the numbers will be down. Sales fell 1% year-over-year in the first quarter.
Hasbro's earnings this morning are also a drag on investors. The company reported a 21% decline in sales in its core consumer products business due to “broader industry trends, business unit closures and lower closeout sales as a result of last year's inventory cleanup.”
Both weak reports say a lot about where shoppers' minds are right now…not when it comes to buying dolls, action figures and board games.
Wednesday, April 24, 2024, 5:57 a.m. CDT
A stat you should know about AT&T
I'm still poring over AT&T's (T) long-term earnings report, but one number immediately caught my attention.
$4.7 billion.
That's how much debt AT&T paid off this quarter as the company continues to try to reduce debt in life after Time Warner. CEO John Stankey has told me several times over the past year that deleveraging is one of his management team's top goals.
As it should be – AT&T still ended the first quarter with total debt of around $132.8 billion! The company's market capitalization is $118 billion.
Wednesday, April 24, 2024, 5:48 a.m. CDT
A list of questions Tesla investors need to think about
The day after.
Tesla (TSLA) CEO Elon Musk has been playing investors like a fiddle. He gave them what they asked for before the profits – details on a cheaper Tesla – and they gobbled it up. Shares are up 10% in premarket trading and the company's ticker dominates the Yahoo Finance Trending Ticker page.
That's all well and good, but it distracts (likely due to Musk's intent) from the main story at Tesla that has weighed on its stock price this year: the company is struggling, and all of Musk's bold promises are driving up its stock let within a terrible year for the company should be seriously questioned.
Here are some questions Tesla bulls need to ask themselves.
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Musk promises robotaxis and shows in the profit overview what his ride-sharing app could look like. But…
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What do the regulators say about this? How feasible is this launch within the next 12 months?
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Musk knows Uber (UBER) exists, right? And that it is finally making good profits and investing aggressively in its business.
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Musk seems to think people want to share their Teslas and make this platform a success. What happens if they don't want to share their tricked-out Model 3?
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Musk mentions that Tesla will own part of the robotaxi fleet. What impact does this have on cash flow and margin profile? Do investors and analysts want Tesla to be saddled with these additional costs while its pure electric vehicle business is under pressure and they're trying to make humanoid Optimus robots?
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Musk promises that he is fully committed to Tesla. But …
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Some interesting earnings release dialogue about how long Musk plans to remain CEO of Tesla. He didn't respond with a specific schedule, but said he works Sundays and seemingly around the clock (like many other people). He then questioned whether Tesla would be able to release its robots if he wasn't running the company. Is now the time to think about a Tesla without Musk in the next few years? What does this actually look like for investors? So many of its top executives have left or are leaving, including one of the people who was on the conference call last night! If Disney's (DIS) buttoned-up CEO Bob Iger is considered a failure at succession planning, then Musk could be considered one of the worst succession planners in CEO history.
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Musk claims Tesla is an AI company again. But …
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Sure, Tesla has amazing technology. But doesn't Tesla first make cars that then use its technology? Who would you rather own shares of? A pure AI company like Microsoft (MSFT) or an automaker masquerading as an AI company?
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Musk praises a cheaper Tesla. But …
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Tesla is no stranger to recalls and product quality concerns. Just look at the Cybertruck recall last week! So how high quality will a $25,000 Tesla be? This sounds like it could be a terrible ownership experience, not unlike when my parents bought a cheap 1986 Ford Tempo and a 1987 Ford Escort when they came on the market.
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