Tesla and Supermicro lead stocks higher at the start of the Santa Claus rally

Biggest S&P 500 risers on Tuesday

December 24, 2024, 2:13 pm EST

Advanced:

• Tesla (TSLA) shares rose 7.4%, leading the S&P 500 and ushering in a positive trading session for Magnificent Seven technology stocks. Analysts at Barclays noted that while the electric vehicle maker expects record deliveries in the fourth quarter, the impact on the stock could be minimal. The investment bank believes Tesla’s recent momentum depends not on short-term metrics, but on its long-term opportunities in autonomous driving and artificial intelligence.
• Super microcomputer (SMCI) shares rose 6%, partially recovering from a series of losses that coincided with the stock’s removal from the Nasdaq 100 index last week. Earlier this month, the server and data storage provider received an extension from the Nasdaq stock exchange to file its delayed annual report until February.
• The December rally continued for shares of Broadcom (AVGO), which rose 3.2%. The chipmaker’s Christmas advance extended gains made in the previous session after UBS analysts raised their AI sales estimates for Broadcom and raised their price target on the stock.
• Starbucks (SBUX) shares rose 2.8%. Union-backed baristas who took part in a strike against the coffee chain are expected to return to work tomorrow. A Starbucks executive said Monday that about 97 to 99 percent of stores would remain open, adding that the strike is not expected to have a major impact on operations nationwide.

Rejecters:

• The weakest Christmas Eve performance in the S&P 500 was recorded by stocks from Walgreens Boots Alliance (WBA), which fell 1.2%. The stock surged in early December after reports that the pharmacy operator was negotiating a sale to private equity firm Sycamore Partners. However, it has been trending downward since then and remains down almost 65% in 2024.
• Shares in an industrial chemicals supplier Celanese (CE) also fell 1.2%. RBC recently cut its price target on Celanese shares, citing pressure on the company’s margins from high energy costs.

-Michael Bromberg

Wall Street Expected a Good Year for These Three Stocks – What Happened?

December 24, 2024, 12:45 pm EST

No one can predict the future, and Wall Street analysts are no exception, even though it’s part of their job.

According to a December 2023 analysis by FactSet Research, analysts expected energy stocks in the S&P 500 to rise more than 25% this year, about twice the expected return of the next best-performing sector. Three of the ten S&P 500 stocks that analysts were most optimistic about at the start of the current year were in the energy sector: oilfield services companies SLB (SLB) and Halliburton (HAL), and oil and gas producer APA Corp. (APA).

It didn’t go the way Wall Street expected. For the second year in a row, the sector lagged the overall market. Of the industries tracked by an S&P Global index, oilfield services and oil and gas exploration are the two worst-performing industries in 2024, down 11% and 8%, respectively, through Monday’s close. Each of the three stocks mentioned above has lost more than a quarter of their value this year.

Here’s more on what went wrong in the energy sector this year.

Bulls hope the “Santa Claus Rally” ends by 2024

December 24, 2024, 11:57 am EST

Bulls are hoping that Santa Claus will slow down the stock market’s progress so far in 2024.

Wall Street is eagerly awaiting a so-called Santa Claus rally to push the S&P 500 – which is up about 25% this year through Monday’s close – to new highs. According to Wall Street lore, the stock market rises steadily during the last five trading days of the year and the first two sessions of the next year. This year this section begins today.

The market is well-positioned for a recovery this year, said Ryan Detrick, chief market strategist at Carson Group, although the Dow Jones Industrial Average recently fell for several days in a row and other indexes faltered before rising yesterday.

Santa Claus has a track record of delivering for Wall Street at the end of the holiday season. According to Carson Group analysis, the S&P rose 76% of the time from the fifth-to-last trading day of the year through the second session of the next year. The analysis shows that gains during a rally averaged 1.7%.

“It’s a modest rally,” he said almanac Editor-in-Chief Jeffrey Hirsch, whose father coined the phrase “Santa Claus Rally.” “But if it doesn’t show up, that means these traders are nervous.”

There were some significant economic downturns after stocks stumbled during those seven sessions, analysts said.

However, there are exceptions to every rule of thumb. Last year, the S&P fell 0.9% over that period before hitting record after record in 2024.

-Sarina Trangle

Tesla leads seven stocks in the gain

December 24, 2024, 11:04 am EST

Shares of Tesla (TSLA) were among the S&P 500’s biggest gainers on Tuesday morning, while major technology stocks in the Magnificent Seven rose on Christmas Eve.

Shares of the electric vehicle maker recently rose more than 4%, making it the second-best performer on the benchmark index – second only to Super Micro Computer (SMCI).

Other Mag 7 stocks also rose this morning, a holiday-shortened session that precedes a day off tomorrow and kicks off the Santa Claus rally period. Major indexes rose this morning, led by the Nasdaq Composite.

Amazon.com (AMZN) rose 1.3%, the biggest gain among the rest of the Magnificent Seven. Nvidia (NVDA) and Meta Platforms (META) recently gained 0.9%. Apple (AAPL), Microsoft (MSFT) and Alphabet (GOOGL) were also in the green.

-David Marino-Nachison

US steel stocks reel as regulators reject Nippon deal to Biden

December 24, 2024, 10:01 am EST

Shares of US Steel (X) fell 1% on Tuesday after US regulators failed to agree on whether to approve Japan’s Nippon Steel’s $14.9 billion purchase of the company should, but the decision was instead passed on to President Biden.

The president now has 15 days to make the decision. Both he and President-elect Donald Trump have opposed the merger, arguing that a major American steelmaker should not be owned by a foreign company.

US Steel responded to the decision by the Committee on Foreign Investment in the United States (CFIUS), saying the agreement “enhances U.S. national and economic security through investments in manufacturing and innovation.” It added that the Nippon transaction “is by far the best way to ensure that US Steel, including its employees, communities and customers, will continue to thrive.”

The Japanese company has pledged to invest more than $2.7 billion in U.S. steel assets, and CEO David Burritt warned of plant closures and the possibility of moving the company’s headquarters from Pittsburgh, where it has been since 1901, if the government blocks the sale.

US Steel shares have been buoyant this year on back-and-forth news about the Nippon acquisition. They fell to their lowest level since September last Friday after warning that falling steel prices and costs associated with building a new factory in Arkansas will impact current quarter results. The shares have lost more than a third of their value this year.

-Bill McColl

American Airlines shares are recovering from morning slump as a “technical issue” disrupts flight operations

December 24, 2024, 9:00 AM EST

The Federal Aviation Administration (FAA) canceled a brief nationwide ground stop requested by American Airlines (AAL) on Christmas Eve, one of the busiest travel days of the year.

“A technical issue is affecting American flights this morning,” American Airlines reportedly said. “Our teams are working to resolve the issue as quickly as possible and we apologize to our customers for the inconvenience.”

Americans are expected to travel in large numbers this holiday season. The American Automobile Association (AAA) estimated earlier this month that more than 119 million people will drive at least 50 miles from home between December 1 and New Year’s Day, surpassing a record set in 2019. More than 7.8 million of those were expected to fly, AAA said.

American stocks fell about 1% half an hour before the market opened, recovering from a sharp 4% decline early Tuesday morning.

-Aaron Rennie

Stock futures remain steady ahead of the holiday-shortened session

December 24, 2024, 8:20 am EST

Futures contracts tied to the Dow Jones Industrial Average lost less than 0.1% in early trading on Tuesday.

S&P 500 futures rose 0.1%.

Nasdaq 100 futures rose 0.2%.