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Will the curse of the Dow come to the Amazon?
24 minutes ago
Being added to the Dow Jones Industrial Average (a select group of just 30 major companies praised for their longevity and stability) should be a reason to celebrate, right?Well, the company turned out set off Indexes may be the real winners (at least in the short term).
This is known as the “Dow Curse,” and the theory is that stocks that fall from the Dow outperform the stocks that replace them. Although there are exceptions, this theory has largely held true for the past decade.
In August 2020, Amgen (AMGN), Honeywell (HON), and Salesforce (CRM) were hired to replace Exxon Mobil (XOM), Pfizer (PFE), and Raytheon (now RTX (RTX)). I did. Amgen and Salesforce have fallen 10% and 2%, respectively, in the 12 months since they were added to the index. Honeywell rose 40%. Meanwhile, during the same period, Pfizer rose 28%, ExxonMobil rose 36% and Raytheon rose 39%.
However, looking at pre-reconstitution performance suggests that the reversal of fortune may have more to do with the cyclical nature of the stock market than any actual downside to being in the Dow Jones Industrial Average. In the year leading up to the repeal, Pfizer, boosted by its COVID-19 vaccine development, rose 6%, Raytheon fell 20% and Exxon fell 41%. But Honeywell, Amgen and Salesforce are all profitable, with the latter up 75%.
The September 23, 2013 reorganization replaced Alcoa (AA), Bank of America (BAC), and Hewlett-Packard (HPQ) with Nike (NKE), Visa (V), and Goldman Sachs (GS) . A textbook example of this phenomenon. Of the three additions, Nike performed the best after the addition, posting a 16% increase over the year. During the same period, Bank of America, the worst performer of the three companies that fell, rose 20%. Alcoa is far from a growth stock, but it rose 89% in the year after it was removed.
Of all the changes since 2013, only one doesn’t support this theory. That’s when Apple (AAPL) replaced AT&T (T) in 2015. Apple rose 2% in the year before joining, while AT&T rose 69% in the same period. A year after the exchange, Apple is up 15% and AT&T is down 17%.
Amazon (AMZN) stock fell 0.2% late Monday afternoon, its first day of trading as a Dow member.
Kroger plunges as FTC files suit to block Albertsons merger
1 hour 12 minutes ago
Kroger (KR) stock fell on Monday after the Federal Trade Commission filed a lawsuit in federal court challenging its acquisition of Albertsons (ACI). The acquisition, announced in 2022, is a $24.6 billion deal that will create a 5,000-store chain.
“Kroger’s acquisition of Albertsons will lead to further increases in the price of everyday groceries, further exacerbating the economic strain that consumers across the country face today,” Henry Liu, director of the FTC’s Bureau of Competition, said in a press release. Deaf,” he said.
Kroger and Albertsons argue that the lawsuit is misguided because the merger would increase competition and lead to lower prices for customers. The companies argue that the merger is necessary to compete with large multichannel retailers such as Walmart (WMT), the largest U.S. grocery chain, Amazon (AMZN) and Costco (COST).
The FTC said the merger would eliminate existing competition between Kroger and Albertsons, leading to lower wages for store workers and higher prices.
Kroger stock was trading 1.9% lower Monday afternoon, while Albertsons stock was up 0.5%.
-Dickon Hyatt
What you need to know ahead of Salesforce’s Wednesday earnings report
2 hours 1 minute ago
Salesforce (CRM) stock rose more than 3% in intraday trading Monday on expectations for the enterprise software company’s fourth-quarter earnings release after the bell Wednesday.
Salesforce is expected to return to profitability after posting a loss in the year-ago period, as the rollout of various artificial intelligence products is expected to drive profits in its data cloud business.
Analysts expect Salesforce to report a quarterly net income of $1.26 billion, reversing a net loss of $98 million due to restructuring charges in the same period last year, according to estimates compiled by Visible Alpha. Diluted earnings per share (EPS) is expected to be $1.29, compared with a loss of 10 cents per share in the year-ago period.
Revenue for the quarter is expected to increase 10% to a record $9.2 billion, which would be Salesforce’s slowest revenue growth since it went public in 2004.
Learn more about what you need to know before earning Salesforce.
-Nathan Leaf
Micron stock soars due to AI-powered memory chip production
2 hours 46 minutes ago
Micron (MU) stock soars on Monday after the memory chip maker announced it has begun volume production of its High Bandwidth Memory 3E (HBM3E) product, which will be incorporated into NVIDIA’s H200 Tensor Core graphics processing units (GPUs). did.
Micron says the chip delivers 1.2 terabytes of memory bandwidth per second and uses 30% less power than its competitors. His H200, which Nvidia (NVDA) announced in November as an improved version of its H100 chip, is expected to begin shipping in the second quarter of this year.
“AI workloads are highly dependent on memory bandwidth and capacity, and Micron is well-positioned to support significant future AI growth through our industry-leading HBM3E and HBM4 roadmaps.” said Sumit Sadhana, Micron’s chief business officer, in a statement on Monday.
Micron’s stock price rose more than 6% Monday afternoon, and the stock has risen 56% in the past year.
Domino’s Pizza’s U.S. business profits push stock prices to two-year high
3 hours 28 minutes ago
Domino’s Pizza (DPZ) posted better-than-expected profits thanks to a strong U.S. business, raised its dividend and added a stock buyback program. The stock was up more than 6% early Monday afternoon.
The pizza delivery chain reported fourth-quarter earnings per share (EPS) of $4.48, beating expectations. Sales were $1.4 billion, an increase of 0.8% from the previous year, falling short of expectations.
The company’s U.S. same-store sales increased 2.8%, tripled from the same period last year and exceeded analysts’ expectations. Overseas same-store sales increased 0.1%.
Domino’s Pizza announced that it will increase its quarterly dividend, which will be paid on March 29 to shareholders of record on March 15, from $1.21 to $1.51 per share.
Following this news, Domino’s Pizza stock rose to its highest level since January 2022.
-Bill McCall
TradingView
Alcoa stock falls after $2.2 billion takeover offer for Alumina
4 hours 36 minutes ago
Alcoa (AA) shares rise following its $2.2 billion all-stock offer to acquire Australian joint venture partner Alumina (AWCMY), with the aim of expanding its global mining operations and consolidating operations. , down 4% in early trading Monday. .
Under the terms of the proposed deal announced on Sunday, Alcoa is offering 0.02854 shares for each Alumina share, a 13% premium to Alumina’s Friday closing price of A$1.02 ($0.67). The amount will be added. If the transaction is successful, Alumina shareholders will own 31% of the combined company, with Alcoa shareholders holding the remainder.
Melbourne-based Alumina said its board supported the takeover offer, but warned there was no certainty that the offer would be successful.
Source: TradingView.com.
The 50-day moving average is below the 200-day moving average, indicating that Alcoa stock is still on a downtrend, but the price has remained roughly flat since late October. A horizontal line connecting the series of price movements over the past nine months could provide overhead resistance near $34.50, while the stock’s 2023 low of $23.07 could serve as a key support level.
-Timothy Smith
Amazon joins the Dow Jones Industrial Average, solidifying its status as a blue-chip company
5 hours 27 minutes ago
Amazon (AMZN) joined the Dow Jones Industrial Average on Monday, boosting Walgreens Boots Alliance (WBA) in the first index realignment in nearly four years.
S&P Dow Jones Indices said the decision to replace Walgreens and Amazon was made to increase the index’s exposure to consumer retail and reflect the “evolving nature of the American economy.” The change was prompted by Dow constituent Walmart (WMT)’s decision to split its shares 3-to-1, thereby lowering its stock price and its weight in the price-weighted average Dow.
Walgreens was added to the blue-chip benchmark in June 2018, replacing General Electric (GE), the longest-running Dow’s original constituent. Since then, the company has lost more than two-thirds of its share price as it struggles to compete with big retailers like Walmart and Amazon, which have launched their own pharmacies.
Amazon is currently the third most valuable company on the Dow Jones Industrial Average, behind Microsoft (MSFT) and Apple (AAPL). But unlike the market-cap weighted S&P 500 index, size doesn’t necessarily make it more influential. UnitedHealth Group (UNH), with a stock price of $530, is the company with the most power to move the Dow Jones Industrial Average.
Amazon is also the youngest company in the Dow. The company was founded by Jeff Bezos in 1994, a full decade after his second-youngest Dow stock, Cisco Systems (CSCO).
Stocks that move the most before the market
6 hours 25 minutes ago
Profit:
- Li Auto Inc. (LI): The electric vehicle (EV) maker’s stock price doubled as fourth-quarter sales doubled year-over-year and expanded profit margins despite an ongoing EV price war. After the announcement, the stock price rose 11%.
- Domino’s Pizza Co. (DPZ): The pizza chain’s stock rose more than 6% after the company announced fourth-quarter profits rose from a year earlier, surprising analysts who had expected profits to decline.
- Berkshire Hathaway (BRK.A, BRK.B): Warren Buffett’s conglomerate’s stock price plummeted by about 2 after the company reported its cash pile swelled to a record $167 billion in the fourth quarter. %Rose.
loss:
- Intuitive Machines (LUNR): The space exploration company’s stock price fell 23% following the fall of the Odysseus lunar lander. Intuitive became the first company to land a spacecraft on the moon last Thursday.
- Moderna Inc. (MRNA): HSBC lowers stock price from “hold” due to uncertainty about the company’s earnings outlook as the company shifts from selling its main coronavirus vaccine to selling new drug candidates. Shares of the vaccine maker fell about 2% after the downgrade.
- Alcoa Corp. (AA): Shares of the aluminum producer fell about 1% after the company offered to buy Australia’s Alumina AWC for $2.2 billion.
Stock futures little changed ahead of PCE week
7 hours 13 minutes ago
Futures contracts tied to the Dow Jones Industrial Average remained within 0.1% of Friday’s closing price in early trading Monday.
S&P 500 futures were flat.
Nasdaq 100 futures rose about 0.1%.
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