Markets News, July 9, 2024: S&P 500, Nasdaq Inch Higher to Extend Winning Streaks

Tuesday's Top S&P 500 Movers

Gainers

Incyte (INCY) shares gained 4.4% on Tuesday after the pharmaceutical firm announced the issuance of restricted stock units (RSUs) and stock options to new employees. These employee awards could be a positive indicator of Incyte's ability to attract and retain talent.

Shares of Corning (GLW) advanced 3.8% on Tuesday, adding to gains posted in the previous session after the specialty glass manufacturer boosted its revenue and profit outlook. The firm highlighted strong demand for its optical connectivity products, which have proven useful in powering networks that run generative artificial intelligence (AI) applications. The solid two-day performance makes Corning the latest stock to benefit from high expectations for AI-driven growth.

Tesla (TSLA) shares drove 3.7% higher, marking the tenth consecutive winning day for the electric vehicle (EV) maker's stock. The string of gains kicked into gear early last week as Tesla topped estimates for second-quarter vehicle deliveries. Upcoming catalysts could include Tesla's earnings report, which is set to be released after the closing bell on July 23, as well as an Aug. 8 event when the company is expected to launch its long-awaited robotaxi.

Decliners

Shares of Albemarle (ALB), the world's largest lithium producer, tumbled 8.8% after Baird lowered its price target on the stock. According to analysts, lithium prices have remained on the lower end of expectations, which could pressure Albemarle's second-quarter results. Analysts also pointed to uncertainties surrounding the U.S. presidential election, with the outcome likely to shape future developments on tax credits and other policies related to the EV market, a key driver of demand for lithium batteries.

Shares of Lamb Weston Holdings (LW), which produces frozen French fries and other potato products, dropped 4.5% amid reports of a class-action lawsuit filed against the company. The complaint alleges Lamb Weston misled investors by downplaying problems related to the implementation of a new enterprise resource planning (ERP) system earlier this year.

-Michael Bromberg

Tesla Shares Rise for 10th Consecutive Session

Tesla (TSLA) shares gained for the 10th straight session on Tuesday, even as new research showed that the auto maker's share of electric vehicle sales in the U.S. fell below 50% for the first time in the second quarter.

Kelley Blue Book's second-quarter EV sales report showed Tesla's U.S. sales falling by 6.3%, while overall EV sales reached a record high.

Increased competition "is leading to continued price pressure, helping push EV adoption slowly higher," said Cox Automotive Industry Insights Director Stephanie Valdez Streaty.

Companies such as General Motors (GM), Ford (F), Hyundai and Kia contributed to quarterly U.S. EV sales of 330,463, an 11.3% increase year-over-year, according to Kelley Blue Book.

The rally in Tesla shares kicked into high gear last week after the company reported better-than-expected second-quarter delivery numbers, news that helped push the stock back into positive territory for the year. The rally also may be supported by anticipation of an update about Tesla's robotaxi, expected in early August.

Tesla gained 3.7% Tuesday to close at $262.33, making it the top performer in the Nasdaq Composite and one of the best in the S&P 500. The stock has gained 44% during its 10-session winning streak.

-Naomi Buchanan

Chipotle Continues Retreat From Record Highs

Shares of Chipotle Mexican Grill (CMG) fell another 3.4% on Tuesday as excitement over the fast-casual chain's recent 50-for-1 stock split wanes.

Chipotle shares broke out from a six-week period of consolidation in mid-June to reach a new record high but have promptly reversed lower since that time to confirm a bull trap, a chart pattern that "traps" investors who initiated long positions on the breakout signal and subsequently generates losses as the price reverses. 

In another sign of weakening upside momentum, technical divergence appeared on the chart last month when the stock climbed to a new high, but the relative strength index (RSI) made a comparatively lower high.

Indeed, the restaurant chain’s shares closed below key support at $61.50 on Monday on above-average volume, raising the possibility for further declines in the weeks ahead.

Read more here about the key share price levels to watch.

-Timothy Smith

Albemarle Tumbles to Lowest Level Since 2020

Shares of Albemarle (ALB), the world’s biggest lithium producer, tumbled as Baird slashed its price target on the stock, pointing to depressed lithium prices.

The stock was down nearly 8% Tuesday afternoon, trading at its lowest levels since November 2020. Albemarle was the biggest decliner on the S&P 500.

Baird lowered its price outlook on the stock to $127 from $170, while maintaining an Overweight rating.

Baird analyst Ben Kallo said that the price of lithium has stayed at or below the “bottom end of guidance” of $15 per kilogram so far this year. Kallo said that Baird believes that “will set up a weak Q2” for Albemarle. The company is set to report second-quarter results July 31.

Kallo also pointed to concerns about the effect this year’s U.S. elections could have on the electric vehicle (EV) market, which directly affects lithium battery demand.

-Bill McColl

Nvidia Continues Rising on Optimism About Blackwell Demand

Nvidia (NVDA) shares climbed again Tuesday after KeyBanc analysts hiked their price target for the stock, citing better-than-expected demand for Nvidia's upcoming Blackwell platform to power artificial intelligence (AI).

Nvidia shares were up nearly 2%, extending gains from earlier in the week after bullish calls from UBS and Wolfe Research on the AI chipmaker's potential.

KeyBanc analysts lifted their price target for the chipmaker to $180 from $130, which represents a more than 40% upside from the stock's closing price Monday. The analysts maintained their "overweight" rating for the stock.

-Naomi Buchanan

BP Shares Slide on Impairment Charges

BP (BP) shares fell sharply Tuesday after the energy giant said that it expects lower refining margins and an impairment charge of up to $2 billion will impact its second-quarter results.

The British oil and gas company said Tuesday that "significantly lower realized refining margins" are projected to have a negative impact between $500 million to $700 million when it reports second-quarter earnings at the end of the month.

BP, which expects to take an impairment charge between $1 billion and $2 billion related to a review of one of its German refineries, is not the only one in the industry warning about potential hits to second-quarter results.

Exxon Mobil (XOM) on Monday said that lower refining margins would cause its second-quarter profits to be between $1.1 billion to $1.5 billion lower. The company also expects lower natural gas prices to cause a hit of about $300 million to $700 million when it reports earnings later this month.

BP American depositary receipts (ADRs) were down about 4.5% around midday.

-Aaron McDade

Helen of Troy Plunges as Company Cuts Guidance

Helen of Troy (HELE) shares crashed Tuesday after the consumer products maker reported weak quarterly earnings and slashed its guidance, as beauty and wellness product demand slumped.

The company behind brands including Revlon, Vicks, and OXO blamed the drop in revenue primarily on a decline in sales of hair appliances, prestige hair care products, and humidifiers, as well as lower replenishment orders from retail customers and the impact of technical issues at its Tennessee distribution center.

CEO Noel Geoffroy said Helen of Troy “battled an unusual number of internal and external challenges in the quarter.” Geoffroy warned that many of those challenges “became more pronounced toward the end of the first quarter and some continue to evolve.“

Helen of Troy shares were down about 30%, trading at their lowest levels in nearly a deacde.

-Bill McColl

Intel Price Levels to Watch as Stock Continues to Rise

Intel (INTC), which is on a four-session winning streak, continued to rise on Tuesday. The stock has surged on optimism the chipmaker stands to benefit from growing interest in artificial intelligence (AI) personal computers and other hardware trends related to the technology. 

Despite the 50-day moving average (MA) crossing below the 200-day MA to form an ominous death cross in early May, Intel shares have traded within a narrow range with several volume spikes since that time.

On Monday, the chipmaker’s stock gapped above the trading range’s top trendline on the highest share turnover since June 21, indicating bullish conviction behind the breakout. Moreover, the relative strength index (RSI) has moved in overbought territory above the 70 thresholds, confirming strong price momentum.

Amid a continued move higher, investors should monitor these four key levels where the shares may encounter overhead resistance.

The first sits around $35.50, an area on the chart connecting prices near a minor countertrend retracement during the stock’s sharp downtrading move in April. If the stock breaks through this level, it may move up to retest a key horizontal line near $39 that links the prominent September 2023 swing high with the 200-day MA.

A close above this region could see the shares climb to around $42, where they would likely face sellers near a trendline connecting four price troughs between December 2023 and March this year. Finally, a longer-term rally may see the price revisit $45.50 near a horizontal line that connects several price peaks over a five-month period from November to April.

-Tim Smith

Stock Futures Point to Higher Open For Major Indexes

Futures contracts connected to the Dow Jones Industrial Average were up 0.1%

S&P 500 futures were up 0.2%

Nasdaq 100 futures were up 0.3%.