- Wall Street indices open lower
- US2000 tests lower limit of the upward channel
- Intel drops after reporting big loss in foundry business
Wall Street indices launched today's cash trading slightly lower, deepening yesterday's declines. S&P 500 dropped 0.2% at the opening, Dow Jones was 0.1% lower and Nasdaq declined 0.4%. Small-cap Russell 2000 was top laggard with 0.8% drop at session launch.
ADP report released earlier today showed a bigger-than-expected employment gain of 184k in March, providing a support for US dollar and putting some pressure on US equities. Traders will be offer one more piece of key US data today at 3:00 pm BST - services ISM index for March. It is expected to show headline index staying virtually unchanged compared to February.
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Source: xStation5
Russell 2000 futures (US2000) underperform other major Wall Street indices again. Taking a look at US2000 chart at H4 interval, we can see that the index has been trading in an upward channel mid-January 2024. Index has recently climbed to 2,165 pts area, the highest level since mid-January 2022, but failed to break above the upper limit of the channel in the area. A strong pullback was launched and the index is now testing the lower limit of the channel in the 2,075 pts area. Should we see a break below this technical hurdle, a deeper downward move may follow. Textbook range of the downside breakout from the channel suggest possibility of a move to as low as 1,980 pts area.
Company News
Intel (INTC.US) launched today's trading lower. Company said that its foundry unit generated an operating net loss of $7 billion in 2023 on revenue of $18.9 billion. This is a deeper loss operating loss than $5.2 billion reported at Intel's chip manufacturing business in 2022. Moreover, revenue in the unit in 2023 was 31% lower than in 2022 ($27.49 billion). Pain is not yet over with Intel CEO saying that he expects 2024 to be the worst year in terms of operating losses at the foundry unit. Unit is expected to reach an operating break even in 2027.
US-listed shares of Taiwan Semiconductor Manufacturing Company (TSM.US) are trading lower today after the company had to pause manufacturing and evacuate some facilities after 7.4 magnitude earthquake hit Taiwan earlier today.
Analysts' actions
- Wolfspeed (WOLF.US) was downgraded to 'equal-weight' at Wells Fargo. Price target was set at $30.00
- Dollar Tree (DLTR.US) was downgraded to 'hold' at Gordon Haskett. Price target was set at $140.00
- Lowe's (LOW.US) was downgraded to 'hold' at Gordon Haskett. Price target was set at $245.00
- Carlisle (CLS.US) was rated 'buy' at Goldman Sachs. Price target was set at $455.00
Intel (INTC.US) launched today's trading with a bearish price gap, responding to news of large operating loss in foundry unit in 2023. Stock is testing the lower limit of the short-term trading range in the $41.75 area. A break below could pave the way for a drop to as low as $38.30. Source: xStation5
