- Wall Street indices open higher
- Investors wait for earnings from Nvidia
- Foot Locker plunges over 20% after suspending dividends
Wall Street indices launched today's trading slightly higher as investors are readying for a quarterly earnings release from Nvidia. S&P 500 and Nasdaq gained around 0.3% at session launch, Russell 2000 traded 0.1% higher while Dow Jones gained around 0.2%
Quarterly earnings release from Nvidia is a key event of the day as it will be a test for AI-driven rally in tech stocks. Company will release earnings after the close of the Wall Street cash session today and release is expected to have an impact on broad-market indices. Nvidia surged over 20% following its latest earnings release, supporting sentiment towards the broad market. As for today's release, options markets are pricing in an around-10% post-earnings share price move.
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Source: xStation5
US tech shares are on watch today as earnings release from Nvidia, scheduled after the Wall Street session closes today, are likely to be a test for the majority of AI-driven stocks. Taking a look at Nasdaq-100 futures (US100) at H4 interval, we can see that the US tech index has recently tested the 15,045 pts resistance zone but failed to break above. This zone is important as it is marked with previous price reactions, 50-period moving average (green line) and the upper limit of a local market geometry. Failure to break above hints that downtrend is still in play and a move back towards recent lows in the 14,625 pts area cannot be ruled out.
Company News
Foot Locker (FL.US) is plunging over 20% today. Company released results for the May-July quarter that were largely in-line with expectations. Adjusted EPS of $0.04 matched analysts' expectations while revenue at $1.86 billion was slightly weaker than $1.88 billion expected. On an unadjusted basis, the company reported a $5 million loss, or $0.05 per share. However, it was the forecast that triggered the sell-off. Foot Locker now expects sales to drop 8-9% this year, while the previous forecast called for a drop of 6.5-8% expected earlier. Adjusted full-year EPS is now seen at $1.30-1.50, down from the $2.00-2.25 range. On top of that, Foot Locker said that it will pause quarterly dividends amid consumer softness.
Shares of Manchester United (MANU.US) are rallying today as speculation over a takeover of the English football club continues. Stock jumped over 10% higher in premarket today after Sun reported the takeover of Manchester United by Qatari Sheikh Jassim Bin Hamad J.J. Al Thani may be announced as soon as next month. However, those gains have been trimmed ahead of Wall Street cash session open and the stock now trades around 5% higher.
Analysts' actions
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Brown-Forman Corp (BFB.US) was upgraded to "overweight" at Morgan Stanley. Price target set at $75.00
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Dick's Sporting Goods (DKS.US) was downgraded to "neutral" at Wedbush. Price target set at $115.00
Shares of Manchester United (MANU.US) jumped at the start of today's Wall Street trading following a report from Sun newspaper that hinted takeover of the football club is imminent. Stock bounced off the $21.50 area and is now trading slightly below $23.00 per share mark. A near-term resistance zone to watch can be found in the $24.75 area. Source: xStation5
