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S&P 500 Rises 1% on Christmas Eve, Tech Stocks Drive Gains: Live Updates

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The U.S. stock market saw a strong performance on Christmas Eve, with the S&P 500 gaining 1.1% to close at 6,040.04. The Dow Jones Industrial Average also rose by 0.91%, adding 390.08 points to reach 43,297.03, while the Nasdaq Composite climbed 1.35% to finish at 20,031.13. A significant contributor to the Nasdaq’s rise was a 7.4% increase in Tesla’s stock price, alongside gains in Amazon and Meta Platforms, which each rose over 1%.

The New York Stock Exchange closed early at 1 p.m. ET, and the bond market followed suit, closing at 2 p.m. The market will remain closed on Wednesday for Christmas Day.

Tuesday’s gains marked the beginning of the “Santa Claus rally,” a seasonal trend in which the market tends to see stronger performance during the last five trading days of the year and the first two days of January. Historical data from LPL Research shows that since 1950, the S&P 500 has averaged a 1.3% return during this period, far outpacing the typical seven-day return of 0.3%.

Despite the upbeat performance, experts advise caution. Paul Hickey, co-founder of Bespoke Investment Group, mentioned on CNBC’s “Squawk Box” that while the market shows positive momentum, it’s important to temper enthusiasm, as the market has already rallied significantly.

Over the past two days, the S&P 500 has gained 1.8% for the week, with the Dow up about 1%. The Nasdaq has surged 2.3% week-to-date, fueled by strong gains in megacap tech stocks. Additionally, the S&P 500 has turned positive for the month, rising by 0.1%. The tech-heavy Nasdaq has seen an impressive 4.2% increase in December, with major players like Google’s parent Alphabet up 16%, Apple up nearly 9%, and Tesla soaring by about 34%. However, the blue-chip Dow remains down by around 3.6% for the month, on track for its worst monthly performance since April.

On the corporate front, American Airlines experienced fluctuations in its stock price on Tuesday after the airline temporarily grounded all flights in the U.S. due to a technical issue during one of the busiest travel days of the year. Despite the disruption, the stock ended the session up 0.6%.

In other retail news, analysts at Jefferies expressed optimism about toy sales this holiday season. Their store checks indicated high traffic and lower inventory levels compared to earlier in the season. Board games, in particular, were reported as strong sellers both in-store and online. Jefferies also noted that discounts were lower than the peak Black Friday levels.

In the toy sector, Mattel and Hasbro stocks showed mixed results. While Mattel’s shares are down over 5% year-to-date, Hasbro has seen a more significant gain of 11%. However, Hasbro has faced recent declines, with its stock down nearly 13% month-to-date, while Mattel’s shares have fallen 6%.

 

Best Buy Raises Full-Year Profit Outlook After Beating Earnings and Revenue Expectations

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Best Buy raised its profit forecast for the fiscal year after reporting stronger-than-expected earnings and revenue for the recent quarter. The company now anticipates full-year adjusted earnings per share (EPS) between $6.10 and $6.35, an increase from its previous range of $5.75 to $6.20. This comes as Best Buy works through an ongoing sales slump amid softer consumer demand following the pandemic-era tech boom and high inflation pressures.

For the quarter ending August 3, Best Buy exceeded Wall Street’s expectations, posting an EPS of $1.34 compared to the expected $1.16, and revenue of $9.29 billion against the anticipated $9.24 billion. Despite a year-over-year decline in net sales from $9.58 billion to $9.29 billion, the company’s net income grew to $291 million, up from $274 million last year.

While comparable sales fell by 2.3%, this marks a significant improvement from the 6.2% decline seen during the same period last year. The retailer has faced challenges with declining consumer electronics sales, which have been forecasted to drop another 2% in 2024 according to Circana.

Best Buy is positioning itself for recovery through several key initiatives. The company is focusing on boosting sales in computing, appliances, and home theater by deploying trained sales teams to these areas, and it is also launching a marketing campaign to engage consumers, including YouTube videos to highlight tech products.

The retailer is banking on new technology rollouts, such as Apple’s new iPads and AI-enabled laptops from Microsoft, to reignite interest and spur spending as the replacement cycle for pandemic-era tech products begins to take shape. Best Buy anticipates increasing stabilization in the industry as 2024 approaches, despite the ongoing challenges in the consumer electronics market.

Foot Locker Reports First Sales Growth in Six Quarters Amid Store Revamps

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Foot Locker has reported a 2.6% increase in comparable sales for the fiscal second quarter, marking its first growth in six quarters. This rise exceeded analysts’ expectations and indicates that the company’s efforts to revitalize its stores and enhance customer experience are paying off. Despite this positive news, Foot Locker’s stock fell approximately 8% in premarket trading.

CEO Mary Dillon highlighted the success of the “Lace Up Plan,” Foot Locker’s turnaround strategy, noting improved top-line trends and a solid start to the Back-to-School season. The company also saw its gross margin expand for the first time in over two years.

Foot Locker’s fiscal performance included a loss of $12 million, or 13 cents per share, compared to a loss of $5 million, or 5 cents per share, in the same period last year. Adjusted for one-time items, the loss was 5 cents per share, better than the expected 7 cents. Revenue reached $1.90 billion, surpassing the anticipated $1.89 billion.

For the remainder of the fiscal year, Foot Locker has maintained its sales guidance, expecting a range of 1% decline to 1% growth, outperforming the anticipated 0.4% decline. The company also retained its adjusted earnings per share forecast, projecting earnings between $1.50 and $1.70, ahead of the expected $1.54.

Under Dillon’s leadership, Foot Locker is focusing on transforming its store network, with plans to invest $275 million this year to remodel two-thirds of its stores by the end of fiscal 2025. The company is also closing or transferring operations of 30 stores in the Asia-Pacific region and 629 in Europe, while expanding its reach in Greece and Romania.

Foot Locker’s Champs Sports banner is showing signs of recovery, with comparable sales down 3.9%, a significant improvement from the 25.3% decline seen last year. The company is also relocating its global headquarters from New York City to St. Petersburg, Florida, by late 2025, aiming to enhance collaboration and reduce costs.

Despite broader retail industry challenges and consistent inflation, Foot Locker’s strategies are driving sales growth and customer engagement. Dillon remains confident in the company’s approach to ensure long-term profitable growth and shareholder value.