The S&P 500 experienced a slight dip of 0.3% on Tuesday, December 10th, as the market cooled down from the previous week’s record-breaking rally. This decline occurred in anticipation of the crucial Consumer Price Index (CPI) report, a significant inflation indicator that could sway the Federal Reserve’s upcoming interest rate decision.
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This market recap provides insights into the significant stock movements of the day, including Walgreens’ surge on potential buyout talks, Moderna’s plunge following a negative analyst rating, and other notable market trends.
Key Market Fluctuations: CPI Anticipation and Stock Performance
Major U.S. equity indices retreated on Tuesday, December 10th, preceding the Wednesday release of the Consumer Price Index (CPI) report. The CPI serves as a vital barometer of inflation and holds potential influence over the Federal Reserve’s interest rate determination scheduled for the following week. The S&P 500 and Nasdaq each concluded the session with a decline of approximately 0.3%, while the Dow Jones Industrial Average registered a loss of around 0.4%.
Moderna’s Decline and Super Micro’s Extended Deadline
Moderna (MRNA) witnessed a significant share price drop of 9.1%, leading the decliners in the S&P 500. This decline followed Bank of America’s reinstatement of coverage on the biotech company with an “underperform” rating. Analysts cited concerns regarding Moderna’s substantial research and development (R&D) expenditure, uncertainties surrounding the actual value of its pipeline, and the potentially limited financial impact of its respiratory syncytial virus (RSV) vaccine.
Simultaneously, shares of Super Micro Computer (SMCI), a provider of servers and data storage solutions, experienced an 8.2% decrease. The Nasdaq recently granted Supermicro an extension until February 2025 to file its delayed annual report. Despite the CEO’s assurance that the company’s stock would maintain its listing on the Nasdaq exchange, anxieties persist regarding a potential removal from the influential Nasdaq 100 index.
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Oracle’s Earnings Miss and Walgreens’ Buyout Buzz
Despite exceeding quarterly profit projections, Oracle (ORCL) saw its shares fall by 6.7% due to sales figures that missed expectations. While the company attributed this to record demand for artificial intelligence (AI), analysts at Citi expressed doubts about the potential upside for Oracle’s cloud revenue. Oppenheim analysts observed that while Oracle exhibited strong growth, its performance was less remarkable compared to recent quarters.
Conversely, Walgreens Boots Alliance (WBA) experienced a significant surge in its share price, rising by 17.7% and achieving the highest daily gains in the S&P 500. This upswing was driven by reports indicating that the pharmacy giant is contemplating a sale to private equity firm Sycamore Partners. Discussions between Walgreens and Sycamore suggest a potential deal completion by early 2025. Should the buyout materialize, Sycamore might divest certain segments of the company or explore strategic partnerships.
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Alphabet’s Quantum Leap and Kroger-Albertsons Merger Blocked
Alphabet (GOOGL), Google’s parent company, saw its shares rise by 5.6% after unveiling its latest quantum computing chip, “Willow.” The company asserted that “Willow” surpassed previous iterations in benchmark tests, signifying progress toward a practical quantum computer with applications in fields such as drug discovery and battery design. Alphabet Class C (GOOG) shares similarly increased by 5.4%.
In other news, a federal judge halted the proposed merger between grocery chains Kroger (KR) and Albertsons (ACI). The Federal Trade Commission (FTC) contended that the consolidation of these two major supermarket operators would stifle competition, leading to higher consumer prices and diminished bargaining power for unionized workers. Following the court’s decision, Kroger’s shares jumped 5.1%, while Albertsons’ stock experienced a slight decline of 2.3%.
Conclusion: Market Volatility and Future Outlook
Tuesday’s market activity highlighted the ongoing influence of inflation concerns and the impact of company-specific news on stock performance. The anticipation of the CPI report, coupled with significant developments in individual companies like Walgreens, Moderna, Oracle, and Alphabet, contributed to market volatility. Looking ahead, investors will closely monitor the CPI data and its potential implications for future Federal Reserve policy decisions, as well as continue to assess the performance and outlook of individual companies amid a dynamic economic landscape.
