Stocks Rebound On Wall Street, Nvidia Posts Strong Quarterly Results

Barry Adams
29 Aug, 2024
New York City

Stocks on Wall Street attempted to rebound from the decline in the previous session after investors reviewed the latest results from artificial intelligence leader Nvidia Corp., Salesforce, Dollar General, and Best Buy. 

Nvidia reported a surge in revenue and earnings, exceeding market forecasts, and the company issued a cautious sales growth outlook in the current quarter. 

Despite the company's stellar quarter, Nvidia's stock faced selling in the early trading as short-term traders chose to lighten their holdings. 

In other earnings news, Dollar General lowered its annual sales, earnings, and comparable sales outlook, citing stretched consumers amid high cost of living. 

Best Buy reported better-than-expected quarterly results after comparable same-store sales fell at a slower pace from a year ago, but Salesforce's quarterly results exceeded market expectations. 

On the economic front, the U.S. economic growth in the second quarter was revised higher to 3.0% from the previous estimate of 2.8% and from 1.4% in the first quarter, the Bureau of Economic Analysis reported Thursday. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.3% to 5,608.56, the Nasdaq Composite rose 0.4% to 17,642.17, and the Russell 2000 index fell 0.7% to 2,188.14. 

The yield on 2-year Treasury notes edged higher to 3.89%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched lower to 4.14%.

WTI crude oil increased $0.50 to $75.02 a barrel, and natural gas prices edged down 4 cents to $2.05 a thermal unit.

Gold fell by $1.03 to $2,506.81 an ounce, and silver increased by $0.14 to $29.32.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.44.

 

U.S. Stock Movers

Semiconductor-related stocks were under pressure after Nvidia's current quarter sales estimate fell short of some analysts high expectations. 

Nvidia, the leading artificial intelligence technology player, and dramatic transformation of the company have attracted worldwide attention, catapulting the company's valuation above one trillion only a few months ago. 

The company's results are now viewed as a proxy for artificial intelligence spending by tech companies and provide critical support for the tech stock rally in 2024. 

Nvidia said revenue in the fiscal second quarter ending in July soared 122% to $30 billion, net income advanced 168% to $16.6 billion from $6.2 billion, and earnings per share rose to 67 cents from 25 cents a year ago. 

The company guided revenue in the current quarter of $32.5 billion, which fell short of some investors lofty expectations. 

Salesforce increased 4.5% to $270.50, and the customer relations management software developer reported better-than-expected fiscal second quarter results. 

In addition, the company said chief financial officer Amy Weaver will step down. 

Crowdstrike Holdings declined 1.3% to $260.78, and the cybersecurity company surpassed revenue and earnings expectations set by analysts. 

Dollar General plunged 26% to $92.38, after the discount store chain operator reported weaker-than-estimated sales and earnings in the latest quarter and slashed its annual outlook. 

Revenue in the second quarter increased 4.2% to $10.2 billion, net income dropped 20.2% to $374.2 million from $468.8 million, and diluted earnings per share decreased 20% to $1.70 from $2.13 a year earlier. 

The retailer lowered its annual sales outlook to between 4.7% and 5.3% from the previous estimate between 6.0% and 6.7%, with the same store sales range between 1.0% and 1.7% compared to the previous range between 2.0% and 2.7%.

The company estimated full-year diluted earnings per share to range between $5.50 and $6.20, lower than the previously estimated range between $6.80 and $7.55. 

Best Buy Company soared 14.2% to $100.45 after the electronics retailer reported better-than-estimated profit and lifted its annual adjusted earnings outlook. 

Net sales in the quarter dropped to $9.29 billion from $9.58 billion, net income in the fiscal fourth quarter increased to $291 million from $274 million, and diluted earnings per share rose to $1.34 from $1.25 a year earlier. 

The company said comparable sales in the quarter decreased 2.3%, compared with a shrink of 6.2% in the period a year earlier. 

The retailer now expects full-year adjusted earnings per share in the range of $6.10 to $6.35, up from the previously estimated range of $5.75 to $6.20.