Dow closes lower Thursday after briefly topping 40,000 for first time: Live updates

Bryan R Smith | Reuters

The Dow Jones Industrial Average closed slightly lower Thursday after briefly jumping above 40,000 for the first time.

At its high of the day, the blue-chip average reached 40,051.05, the culmination of a bull market that began in October 2022. The index had neared the 40,000 mark earlier this year before a slight April pullback on worries about high interest rates knocked it back down. The rally was rekindled in May on the back of strong earnings and some soft inflation readings.

Ultimately, the 30-stock Dow ended the day down 38.62 points, or 0.1%, closing at 39,869.38. The S&P 500 fell 0.21%, closing at 5,297.10. The Nasdaq Composite finished the day lower by 0.26%, ending at 16,698.32.

During the session, the broader market index also climbed to a new record after closing above the 5,300 level for the first time ever on Wednesday, while the tech-heavy Nasdaq hit an all-time high. The Dow has climbed nearly 6% in 2024, while the Nasdaq and S&P 500 are up 11% each.

"This achievement is a testament to the powers of capital formation, innovation, profit growth and economic resilience," said John Lynch, chief investment officer at Comerica Wealth Management. "The recent technical momentum and fundamental strengths, including earnings and interest rates, suggest further near-term gains."

It was Walmart that led the Dow's charge above 40,000 as the world's biggest retailer popped nearly 7% on strong fiscal first-quarter results. Walmart is now up 21% in 2024.

The Dow's march toward 40,000 comes as expectations of interest rate cuts and enthusiasm around artificial intelligence boost investor sentiment. The first Federal Reserve rate cut is priced in for September, according to the CME Group's FedWatch Tool. That expectation grew after a smaller-than-expected increase in consumer prices for April was reported earlier this week.

On top of that, tech-related darlings such as Amazon, Meta Platforms and Nvidia are all up sharply year to date.

Amazon, which just joined the more than century-old Dow in the first quarter, is more than 20% higher for the year. Other top Dow performers this year include American Express, up about 29% in the period, and Goldman Sachs, up 20%. Those names rose as investors bet the economy would skirt a recession and the consumer would remain strong.

Baird analyst Ross Mayfield thinks this rally still has the strength to continue.

"This has all the signs of a cyclical bull market and it's not running out of steam as far as we can tell," he told CNBC in an interview.

Stocks close lower after Dow reaches historic milestone

Stocks closed lower, turning their performance around after all three major indexes rose to new intraday highs Thursday morning.

The Dow Jones Industrial Average lost 38.62 points, or 0.10%, to settle at 39,869.38. The 30-ticker benchmark had earlier crossed over the 40,000 level for the first time in history.

The S&P 500 and Nasdaq Composite, which also notched intraday highs, respectively slid 0.21% and 0.26%. The broader market index closed at 5,297.10, while the tech-heavy Nasdaq closed at 16,698.32.

— Lisa Kailai Han

More value exists for regional banks over big banks, Baird says

With valuations for many banks hitting their 52-week highs, upside is getting much more limited these days, according to Baird Equity Research.

"Refreshed market cap/assets implying less upside here, still more value in regionals but would not advocate chasing here," the firm wrote in a note from Thursday.

Analyst David George noted that while low expectations last fall provided a margin of safety for investors to comfortably buy bank names, this margin is "largely negligible" at the sector's current prices.

— Lisa Kailai Han

There's still room for further upside for Big Tech stocks, Barclays says

Rafael Henrique | Lightrocket | Getty Images

Backed up by artificial intelligence-related tailwinds, the tech sector has largely led the current market rally. Shares of graphics processer manufacturer Nvidia are up 91% this year alone.

Despite this bull run, Barclays is still constructive on the sector.

"Big Tech fundamentals still look good here and we think there's room to run over the next couple of quarters, even though the bar for the group to deliver has been set very high. Big Tech revisions have strengthened further post-Q1 earnings, bifurcating even more from the rest of the S&P 500," strategist Venu Krishna wrote in a note.

Krishna added that the defensible margins that characterize the sector also have scarcity value in an increasingly troubling macroeconomic environment.

— Lisa Kailai Han

Costco climbs to all-time high, tops $800 for the first time

Costco Wholesale Corporation rose more than 1% Thursday to an all-time high of $804.50 per share on an intraday basis, marking the first time the membership-only big-box store has topped the $800 threshold.

When the retailer merged with Price Club in 1993, the shares were only trading under $10 apiece. The stock is up more than 20% this year, outperforming the S&P 500's 11% gain.

The late Charlie Munger, who was on Costco's board, was an early investor and a big champion of the retailer, calling himself a "total addict" to the company. He was a big fan of Costco's membership business and rewards program as well as its big, efficient stores and consistently strong management. He believed Costco will eventually become a huge internet player, threatening Amazon in the process.

The company is set to report fiscal third-quarter earnings on May 30. Costco had missed Wall Street's revenue expectations for its holiday quarter despite reporting year-over-year sales growth and strong e-commerce gains.

— Yun Li

Market rally to widen in 2024, according to Barclays

While Big Tech has led the current market rally, Barclays sees much more room ahead for outperformance from other sectors.

"Broadening has been modest and we think there's room for a lot more. Earnings growth is the most likely catalyst, in our view," strategist Venu Krishna wrote in a Thursday note.

Krishna noted that investors have already accounted for much optimism in Big Tech's current earnings estimates, meaning that comps could be challenged going forward.

"We think this creates an opportunity for the rest of the S&P 500 to contribute more meaningfully to YoY earnings growth in 2H24 and into 2025, provided the macro backdrop remains supportive," the strategist added. "In an encouraging sign, revisions for the rest of the SPX have also improved following the Q1 earnings season."

— Lisa Kailai Han

GameStop retail participation notched 3-year high on Monday, JPMorgan says

Retail investor participation in GameStop hit a three-year high on Monday, according to JPMorgan.

Everyday traders were involved in the video game retailer's stock at a level of around 30% on Monday after the online return of "Roaring Kitty," the user credited with helping spur 2021's epic meme stock squeeze. That is a level not seen since 2021, JPMorgan data shows.

Despite that, the meme stock rallies have fizzled as the week has gone on, making Monday's moves appear to be more of a fad than a harbinger.

— Alex Harring

Walmart leading Dow gains on Thursday

A Walmart employee fulfilling Instacart orders in the produce aisle in North Carolina.
Lindsey Nicholson | Getty Images
A Walmart employee fulfilling Instacart orders in the produce aisle in North Carolina.

Walmart shares powered the Dow Jones Industrial Average higher Thursday as the benchmark reached the 40,000 milestone for the first time.

The big-box retailer gained 6.4% after its first-quarter earnings and revenue topped consensus forecasts.

Industrials company 3M and Boeing both advanced 3%, putting the stocks neck and neck for the Dow's second-biggest winner Thursday.

Chipmaker Intel also added 2.4%, followed by Travelers and Honeywell up 2.4% and 1.5%, respectively.

— Hakyung Kim

53 stocks in the S&P 500 reach new 52-week highs

People enter and exit a Costco Wholesale store in Bayonne, New Jersey, on March 26, 2023.
Gary Hershorn | Corbis News | Getty Images
People enter and exit a Costco Wholesale store in Bayonne, New Jersey, on March 26, 2023.

On Thursday, 53 stocks in the S&P 500 hit new 52-week highs.

Names that reached this milestone included:

On the other hand, only one stock hit a 52-week low: Solventum.

— Lisa Kailai Han

The S&P 500 is headed for the 5,575 level, Strategas' Verrone says

The S&P 500 could next find support at the 5,575 level, according to Strategas head of technical and macro research Chris Verrone.

"[It's] not exactly advanced math, but simple breakout technique suggests roughly 5550-5600 as the next S&P target," Verrone wrote in a Thursday note.

The S&P 500 has gained more than 2% over the past week and nearly 12% in 2024.

— Brian Evans

U.S. may need unemployment to rise for 'last mile' of inflation fight, Bernanke paper says

New research authored by former Fed Chair Ben Bernanke and International Monetary Fund veteran Olivier Blanchard suggests that the U.S. and other countries may need unemployment to rise for inflation to fall back to normal levels.

The working paper, published by the Peterson Institute for International Economics, comes from a project in which 10 global central banks used a model developed by Bernanke and Blanchard to examine the pandemic-era inflation spike. The research showed that some period of higher unemployment and slower wage growth may be necessary to accomplish the "last mile" of reducing inflation.

"As the effects of relative price shocks and shortages stabilized or reversed, inflation declined, and the role of labor market tightness became increasingly important, suggesting that some slowing of activity might be necessary to get US inflation all the way back to target," the paper's abstract said.

The paper does say in its conclusion that "the unemployment costs of the last mile could be limited" in the U.S.

— Jesse Pound

Fed's Barkin says inflation data progressing but still short of goal

Richmond Federal Reserve President Thomas Barkin said Thursday that he was encouraged by the consumer price index report the previous day but sees more work ahead to get back to the central bank's goal of 2% inflation.

"On the inflation side, it certainly came off the numbers of the prior few months, which was good. It's still not where we're trying to get to target," the central bank official said during a CNBC "Squawk on the Street" interview.

"I do believe we're on the right path here. I do believe inflation is coming down on the big picture," he added regarding data showing CPI inflation running at a 3.4% annual rate. "My point is only to get to 2% sustainably in the right kind of way. I just think it's going to take a little bit more time."

Harkin is a voting member this year on the rate-setting Federal Open Market Committee.

Consumer staples stocks outperform, Walmart pops 6%

Consumer staples stocks rose Thursday, lifting the S&P 500 sector more than 1.5% during midday trading.

Walmart led the sector to the upside, jumping 6% after reporting strong earnings and share gains among high-income shoppers. Dollar General, Target and Dollar Tree added about 3% each, while PepsiCo, General Mills and Costco Wholesale added at least 1%.

Three stocks in the sector — Kellanova, Clorox Company and Tyson Foods — inched lower.

— Samantha Subin

Stocks making the biggest moves midday

Morning traffic outside Meta headquarters in Mountain View, California, on Nov. 9, 2022.
Peter Dasilva | Reuters
Morning traffic outside Meta headquarters in Mountain View, California, on Nov. 9, 2022.

Check out the companies making headlines in midday trading:

Meta — Shares pulled back 1.3% after the European Union opened a probe into the company regarding child safety concerns on social media platforms Facebook and Instagram.

Deere — Deere shares slipped about 3% after the maker of agricultural equipment cut its full-year guidance. The company said it now expects net income of roughly $7 billion, down from a range of $7 billion to $7.5 billion.

Walmart — Shares rallied nearly 6% after the company reported adjusted first-quarter earnings of 60 cents per share, topping the 52 cents expected from analysts polled by LSEG. Revenue was $161.5 billion, beating the $159.5 billion consensus estimate. Walmart said it made big gains in e-commerce and won over more high-income shoppers.

The full list can be found here.

— Hakyung Kim

40,000 Dow level is a 'big psychological' win, boosting markets into 'overvalued territory,' investor says

The Dow Jones Industrial Average crossing above 40,000 for the first time on Thursday could add fuel to the flames for the current bull rally, according to Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli.

"Breaking the 40,000 barrier is a big psychological boost for the bulls as round numbers hold special significance in people's hearts and minds," he said in an email. "We are in a Bull Market and people are showing some irrational exuberance (meme stocks) and dismissing bad news (slowing retail sales) and focusing on good news (slightly slowing inflation)."

Zaccarelli added a warning that the market is now heading into "overvalued territory," making it even more important for investors to become especially discerning when investing in equities.

— Lisa Kailai Han

Advertising technology stocks pop as Netflix announces new ad platform

Thomas Trutschel | Photothek | Getty Images

Advertising technology stocks popped Thursday, a day after Netflix announced it plans to roll out its own ad platform and partner with Google Display & Video 360, The Trade Desk and Magnite.

The Trade Desk added 5%, while Magnite shares rallied 28% and headed for their best day since November 2022. Alphabet shares were last up 1%.

Wall Street views the partnership as a boon for these ad-tech stocks, with Citi's Ygal Arounian estimating that it could add $500 million to The Trade Desk's 2025 gross billings.

Netflix aims to start testing the platform in Canada later this year, and roll out the offering worldwide by the end of next year.

Read more on what the partnership means for this under-the-radar stock here.

— Samantha Subin

There are no signs this cyclical bull market is 'running out of steam,' says Baird's Ross Mayfield

All three major stock averages ripped to new intraday highs Thursday morning, with the Dow Jones Industrial Average crossing over 40,000 for the first time in history.

Baird analyst Ross Mayfield attributed the strong earnings season as providing another leg for the market rally to stand on in recent weeks.

"This has all the signs of a cyclical bull market and it's not running out of steam as far as we can tell," he told CNBC in an interview.

— Lisa Kailai Han

The Dow Jones Industrial Average hits 40,000 level

The 30-stock Dow reached a fresh milestone Thursday morning, surpassing the 40,000 threshold.

At its high of the session, the average touched 40,002.75, climbing about 0.2%.

Walmart shares helped lift the price-weighted index to its fresh high, as the big-box retailer jumped more than 6% following a fiscal first-quarter beat on the top and bottom lines.

The Dow's new high follows a day after the three major averages closed at fresh records.

Darla Mercado

AMD replaces Nvidia in Wolfe Research's Alpha List

Wolfe Research replaced Nvidia with AMD in its Alpha List, saying the decision was a "tactical shift" after Nvidia's outperformance this year.

"We make a tactical shift in priority to AMD, adding it to the Wolfe Alpha List, replacing NVDA given the relative move in shares YTD," Chris Caso wrote to clients on Thursday. "We expect more significant catalysts for NVDA later this year, and expect numbers to move higher for both NVDA and AMD."

The decision comes ahead of Nvidia's earnings results next week in which the artificial intelligence chipmaker will have a high hurdle to clear after its exorbitant run. Nvidia shares have nearly doubled this year, up roughly 91%. In comparison, AMD shares are up just 8%. Meanwhile, the S&P 500 is up more than 11%.

— Sarah Min

Stocks open unchanged

The major stock indexes opened little changed on Thursday morning.

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite were all trading around flat just after 9:30 a.m. ET.

— Lisa Kailai Han

There was a trio of very strong retail earnings this morning, but guidance tells a different story

Canada Goose CEO of Dani Reiss applauds the company's initial public offering above the floor of the New York Stock Exchange shortly after the opening bell in New York on March 16, 2017.
Lucas Jackson | Reuters
Canada Goose CEO of Dani Reiss applauds the company's initial public offering above the floor of the New York Stock Exchange shortly after the opening bell in New York on March 16, 2017.

Walmart, Under Armour and Canada Goose all reported better-than-expected profits. But the retailers' outlooks ranged from somewhat cautious to downright disappointing.

  • Walmart expects second-quarter earnings per share of 62 cents to 65 cents, roughly in line with the consensus estimate of 64 cents, despite just posting its biggest earnings beat in three years.
  • Under Armour's fiscal fourth-quarter earnings beat by 3 cents, but its profit forecast of 18 cents to 21 cents in the new fiscal year is a fraction of the 59 cents the Street has been expecting. The athletic gear firm also sees a shocking low double-digit decline in revenue, while analysts were expecting a 2% rise. The company blames "lower wholesale channel demand and inconsistent execution across our business" for the weak guidance.
  • Canada Goose's fiscal fourth-quarter earnings were three times greater than the Street's expectations. But its outlook for the new fiscal year was far more tempered as it expects "global consumer spending will continue to be pressured." The outdoor apparel maker projects mid-teens earnings growth versus Wall Street's expectation of 20.6% growth, and revenue growth of low single digits versus an estimate of 8.1%. An even bigger problem, though, is the company has withdrawn its long-term financial targets amid the "more challenging consumer spending environment" that has caused its direct-to-consumer and wholesales businesses to "have not performed according to our expectations."

— Robert Hum

Import prices showed unexpected large gain in April

Cranes stand over shipping containers at the Port of Newark as seen from Bayonne, New Jersey, on March 26, 2024.
Spencer Platt | Getty Images
Cranes stand over shipping containers at the Port of Newark as seen from Bayonne, New Jersey, on March 26, 2024.

Import prices jumped 0.9% in April on rising food and fuel prices, indicating that pipeline inflation pressures are still at play, the Bureau of Labor Statistics reported.

The increase topped the Wall Street consensus estimate of 0.3% and came after an upwardly revised 0.6% acceleration in March. It was the largest one-month gain since March 2022. On a 12-month basis, import prices increased 1.1%, the biggest move higher since December 2022.

Fuel prices rose 2.4% while foods, feeds and beverages posted a 1.7% increase, the largest since July 2023. Nonfuel import prices jumped 0.7%, the highest since March 2022.

— Jeff Cox

Jobless claims move lower after spiking a week ago

Initial claims for unemployment benefits drifted back lower last week after showing a spike in the previous period, the Labor Department reported Thursday.

First-time filings totaled 222,000 for the week that ended May 11, just 1,000 above the Dow Jones estimate and a 10,000 decline from the previous week's upwardly revised total, which was the highest since late August.

Continuing claims rose to 1.794 million, up 13,000 from the previous week and a bit above the FactSet estimate.

In other economic data Thursday, the Commerce Department reported that building permits fell to 1.44 million, below the 1.48 million estimate, while housing starts rose to 1.36 million, but well below the 1.4 million estimate.

— Jeff Cox

Stocks making the biggest moves premarket

Check out some of the companies making headlines in premarket trading:

Under Armour — The sportswear maker's Class A shares slumped 11% and its Class C stock fell 9% after it issued lower-than-expected full-year earnings guidance. Under Armour now expects earnings in the range of 18 cents to 21 cents, while analysts polled by FactSet had forecast 59 cents.

Canada Goose — The coat maker jumped more than 12% after beating Wall Street estimates for sales and earnings in its fiscal fourth quarter. Canada Goose said one key profit margin metric "will expand by approximately 100 basis points compared to fiscal 2024" this year.

Walmart — The big-box retailer popped 4.7% after reporting adjusted first-quarter earnings of 60 cents per share, topping the 52 cents expected from analysts polled by LSEG. Revenue was $161.5 billion, beating the $159.5 billion consensus estimate. Walmart said it made big gains in e-commerce and won over more high-income shoppers.

Read the full list here.

— Brian Evans

Walmart's biggest earnings beat in 3 years

Omar Marques | Lightrocket | Getty Images

While Walmart posted its 17th consecutive revenue beat, adjusted earnings per share of 60 cents was an impressive 15% above the consensus estimate and handily topped every single forecast on the Street. The highest analyst estimate was for a profit of 55 cents. Operating income rose 9.6% from the prior year's quarter. That was well above the 3.0% to 4.5% growth forecast the company had previously expected.

The strong first-quarter performance came amid successful advertising efforts and the retailer's ability to win over more high-income shoppers. Same-store sales at its Walmart U.S. stores grew 3.8%, with all the growth coming from higher transactions.

— Robert Hum & Melissa Repko

Chubb surges 8.2% premarket after Buffett discloses it as Berkshire 'confidential' holding

Shares of Zurich-based Chubb Limited climbed 8.2% premarket Thursday after Warren Buffett's Berkshire Hathaway disclosed it was the conglomerate's previously undisclosed, $6.7 billion "confidential" investment.

Chubb's advance was the largest among all stocks in the S&P Composite 1500 Index on Thursday, which comprises the S&P 500, the MidCap 400 and the SmallCap 600, according to FactSet data.

Berkshire's first-quarter 13F released Wednesday showed it owned a 6.39% stake in Chubb, making it the second-largest institutional investor after Vanguard's 9.08%.

Berkshire had kept the Chubb purchase secret for two quarters, having applied for U.S. Securities and Exchange Commission treatment to keep the details of one or more of its stock holdings confidential.

— Scott Schnipper

Meme stocks set to retreat for a second day

A screen displays the trading information for GameStop and AMC Theatres on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 15, 2024. 
Brendan McDermid | Reuters
A screen displays the trading information for GameStop and AMC Theatres on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 15, 2024. 

The so-called meme stocks are poised for a second day of decline following a speculative rally in the beginning of the week. GameStop and AMC both fell more than 10% in premarket trading Thursday.

While the swift rally earlier this week turned heads on Wall Street, the retail interest in these meme names pales in comparison with the epic mania three years ago.

The speculative run was reignited Monday by a rare social media update from "Roaring Kitty." The man, whose legal name is Keith Gill, posted a picture on the X social media platform of a video gamer sitting forward on their chair — a meme used by gamers to indicate they are taking the game seriously.

GameStop is still up 126% week to date, while AMC has gained 88%.

— Yun Li

Walmart rises on better-than-expected earnings

Exterior view from a Walmart store in Secaucus New Jersey, on Feb. 19, 2024.
View Press | Corbis News | Getty Images
Exterior view from a Walmart store in Secaucus New Jersey, on Feb. 19, 2024.

Walmart shares rose more than 2% in the premarket after the retail giant reported fiscal first-quarter results that beat analysts' expectations.

The company earned an adjusted 60 cents per share on $161.51 billion in revenue. Analysts expected a profit of 52 cents on revenue of $159.5 billion, per LSEG.

— Fred Imbert

Meta hit with child safety probe in Europe

The European Union brought a major investigation for Meta Platforms that will look into alleged breaches of the region's online content law regarding child safety. In a statement, the European Commission said it was looking into whether Facebook and Instagram "may stimulate behavioural addictions in children, as well as create so-called 'rabbit-hole effects.'"

Meta shares were down slightly in the premarket.

— Fred Imbert

Deere falls after 2024 earnings guidance cut

Cheney Orr | Reuters
A general view of the John Deere exhibit at the Sunbelt Ag Expo following a "Farmers for Kemp" rally that was held just outside the expo, in Moultrie, Georgia, on Oct. 18, 2022.

Deere shares were down more than 6% in the premarket after the tractor maker cut its full-year earnings outlook. The company expects net income of roughly $7 billion for the year, versus a previous forecast of $7.5 billion to $7.75 billion. The guidance cut overshadowed better-than-expected quarterly results.

— Fred Imbert

Baidu rises after Q1 revenue beat

Men interact with a Baidu AI robot near the company logo at its headquarters in Beijing, China April 23, 2021.
Florence Lo | Reuters
Men interact with a Baidu AI robot near the company logo at its headquarters in Beijing, China April 23, 2021.

Baidu reported first-quarter revenue that beat expectations, sending shares of the Chinese tech company up by 2% in the premarket. The company's top line came in at 31.51 billion yuan, exceeding an LSEG estimate of 31.21 billion yuan.

"Baidu Core's online marketing revenue remained stable, while the end-to-end optimization of our AI technology stack continued to propel the growth of our AI Cloud revenue during the quarter," said co-founder and CEO Robin Li in a statement.

— Fred Imbert

European markets open mixed

European markets opened mixed Thursday as a slew of earnings weighed on a relief rally for global markets following softer-than-expected U.S. inflation data.

The U.K.'s FTSE 100 index was down 0.3% at 8,416, Germany's DAX was 0.02% lower at 18,864, France's CAC was 0.2% lower at 8,221 and Italy's FTSE MIB was up 0.03% at 35,366.

— Karen Gilchrist

TSMC says no damage to Arizona plant after report of an explosion

The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023.
Brendan Mcdermid | Reuters
The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023.

Taiwan Semiconductor Manufacturing Company said there was no damage to its facilities at its Arizona factory construction site, according to Reuters, following a report of an explosion at the plant.

A worker at TSMC's Arizona plant was taken to a hospital with serious injuries following an explosion, the Arizona Republic reported earlier, citing authorities.

The Arizona Republic reported that firefighters from multiple departments responded to a hazardous materials call on Wednesday afternoon.

The chipmaker said in a statement that none of its employees or onsite construction workers had reported any injuries, according to Reuters.

— Shreyashi Sanyal, Reuters

Tencent shares jump 4.5% after it posts fastest profit growth in 3 years

SHANGHAI, CHINA - JULY 6, 2023 - (FILE) Visitors visit the stand of Tencent at the 2023 World Artificial Intelligence Conference in Shanghai, China, July 6, 2023.
Nurphoto | Nurphoto | Getty Images
SHANGHAI, CHINA - JULY 6, 2023 - (FILE) Visitors visit the stand of Tencent at the 2023 World Artificial Intelligence Conference in Shanghai, China, July 6, 2023.

Tencent's Hong Kong-listed shares rose 4.5% after the Chinese tech giant beat analysts' estimates for revenue and profit in the first quarter.

The company reported slightly better sales in its core gaming business and improved profitability in its advertising and business services division late on Tuesday.

Revenue of 159.5 billion Chinese yuan ($22 billion) in the first quarter topped analysts' expectations of 158.4 billion yuan. Profit attributable to shareholders came in at 41.9 billion yuan versus expectations of 36.64 billion yuan.

The company's adjusted net profit grew 62% year on year, the fastest growth since the March quarter of 2021, according to LSEG data.

Markets in Hong Kong resumed trading Thursday after a holiday.  

— Shreyashi Sanyal, Arjun Kharpal


Chinese property shares rise after report that government plans to buy unsold homes

Chinese property stocks rose following a report that the country was considering to buy millions of unsold homes from distressed developers in a bid to prop up its embattled property market.

Hong Kong's Hang Seng Mainland Properties Index climbed over 6%.

Shares of Hong Kong-listed Logan Group gained 11.59% and Longfor Group rose 14.63%. China Vanke climbed 14.78%. Private developer CIFI Holdings jumped 25%.

On Wednesday, Bloomberg News reported that China's State Council was gathering feedback from government entities and several provinces on local state-owned enterprises being tasked to buy unsold homes at steep discounts using loans offered by the state banks.

—Lee Ying Shan

Japan's first-quarter GDP contracts by a more-than-expected 2%

People cross a street in Tokyo's Ginza district.
Philip Fong | Afp | Getty Images
People cross a street in Tokyo's Ginza district.

Japan's economy contracted at an annualized 2% in the first quarter of 2024, according to official data.

The GDP reading showed a deeper-than-expected contraction in the first quarter compared with a 1.5% contraction expected in a Reuters poll.

The latest data could also likely jeopardize the Bank of Japan's plans to raise interest rates.

The BOJ held its benchmark policy rate unchanged at 0%-0.1% at its last monetary policy meeting on April 26, and said its monetary policy will depend on future economic conditions.

— Shreyashi Sanyal

Homebuilding ETF pops to its best day since December

Wednesday's market rally lifted the iShares U.S. Home Construction ETF (ITB) to its best day since December.

The ITB jumped 3.7%, posting its best session since Dec. 14, back when it gained more than 6%. Year to date, the exchange-traded fund is up more than 10%

Wednesday's surge in homebuilding stocks occurred as Treasury yields retreated following a cooler-than-expected inflation report. Names tied to the housing sector are especially sensitive to movement in interest rates.

Names within the ITB that saw an especially strong day include D.R. Horton, up nearly 6.5%, and Lennar, up 5.3%. PulteGroup also jumped more than 5%.

Darla Mercado, Chris Hayes, Ethan Kraft

Election cycle defense budget debates could boost sector, Barclays says

While earnings consensus revisions remain flat for the U.S. defense sector in the near term, Barclays believes this trend could reverse in the next year or so.

"We expect the debate around future defense budget to be pushed back until early 2025, following the Presidential election, potentially creating a window of opportunity for the defense sector to recover from recent underperformance," wrote analyst Charlotte Keyworth.

Within the U.S. defense sector, Keyworth prefers General Dynamics and L3Harris Technologies for their discounted multiples and good free cash flow growth.

— Lisa Kailai Han

Stocks making the biggest moves after hours

These are some of the biggest movers in extended trading:

  • AST SpaceMobile — Shares rocketed 42% after AST SpaceMobile announced a commercial agreement with AT&T to bring its space-based broadband network direct to everyday cell phones. 
  • Chubb — The property and casualty insurer gained 7% after Berkshire Hathaway revealed it has bought nearly 26 million shares of the Zurich-based company for a stake worth $6.7 billion. 
  • Cisco Systems — Shares jumped nearly 5% after the IT giant reported fiscal third-quarter adjusted earnings of 88 cents per share on revenue of $12.70 billion, topping analysts' estimates for earnings of 82 cents per share on revenue of $12.53 billion, according to LSEG.

For more stocks on the move, check out our list here.

— Tanaya Macheel

Stock futures open little changed

Stock futures were little changed to begin trading on Wednesday evening.

Futures tied to the Dow Jones Industrial Average were down 0.02%, while S&P 500 futures ticked lower by 0.05% and Nasdaq 100 futures inched higher by 0.02%.

In regular trading, all of the major averages closed at record highs.

— Tanaya Macheel

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