Markets News, January 3, 2025: Stocks Snap 5-Session Losing Streak as Tesla and Nvidia

Biggest S&P 500 Movers on Friday

January 03, 2025 06:02 PM EST

Advancers

• Following five straight days of declines in line with the drops in the benchmark index, Super Micro Computer (SMCI) shares roared back on Friday, bouncing 10.9% to lead the S&P 500 higher. The server maker’s stock logged a highly volatile performance in 2024 as accounting-related issues led to the delay of its annual report. Supermicro’s CEO assured investors that the postponed filing will be complete by the updated Feb. 25 deadline issued by the Nasdaq, downplaying the threat that the exchange could delist the stock.
• Nuclear energy stocks continued to heat up as the new year of trading gets underway, with elevated demand from artificial intelligence (AI) data centers helping brighten the outlook for power generators. Shares of Vistra (VST) surged 8.5%, while shares of fellow Texas-based utility NRG Energy (NRG) added 6.2%.
• Tesla (TSLA) stock soared 8.2%, recovering from heavy losses posted in the prior session. The electric vehicle (EV) manufacturer reported fewer-than-expected vehicle deliveries for the fourth quarter, with full-year delivery totals for 2024 falling short of the 2023 levels. However, the carmaker said Friday that sales in China hit a record high last year, a sign of strength in the world’s largest car market, where Tesla faces stiff competition from domestic EV producers.

Decliners

• Dollar Tree (DLTR) shares dropped 4.1% on Friday, losing the most of any S&P 500 stock. The discounter launched same-day delivery at its stores as it aims to compete more effectively with online retailers, but the move has the potential to hinder Dollar Tree’s profit margins, which are already minimal. Analysts have also expressed concerns about Dollar Tree’s transition to a multi-price point format, noting that the transformation has not yielded the expected benefits for same-store sales growth and highlighting management’s reduced forecasts for stores that will be converted to the new format.
• Shares of alcoholic beverage producers came under pressure after U.S. Surgeon General Dr. Vivek Murthy warned about elevated cancer risks associated with alcohol consumption. The top health official called for additional warning labels on alcohol products to advise consumers about the cancer-related dangers, similar to the warnings placed on tobacco packaging. Shares of brewing giant Molson Coors (TAP) tumbled 3.4%.

• Celanese (CE) shares sank 3.4% to a 52-week low. In its most recent earnings report, released in November, the provider of specialty chemicals missed sales and profit estimates, citing demand weakness in various end markets, including paints, coatings, and construction. At that time, Celanese also announced a dividend cut, effective in the first quarter of 2025.

–Michael Bromberg

Major Indexes Finish the Holiday-Shortened Week With Losses

January 03, 2025 05:04 PM EST

Despite the big gains on Friday for U.S. stocks, the three main indexes finished in the red for the week.

The Dow Jones Industrial Average lost 0.6% during the four-day holiday week, while the S&P 500 and Nasdaq Composite each shed 0.5%. Each of the major indexes had posted gains the previous week.

The Dow has now lost ground in four of the last five weeks, while the S&P 500 has finished lower in three of the last four weeks.

Ford, GM Post Highest Annual Sales Since 2019

January 03, 2025 03:53 PM EST

Ford Motor (F) and General Motors (GM) on Friday reported their best annual U.S. new vehicle sales figures since before the pandemic. 

Ford sold 2.08 million vehicles in 2024, up 4% year-over-year and its highest number since 2.42 million in 2019.  Fourth-quarter sales increased 9%. 

GM sold 2.7 million vehicles last year, 4% more than in 2023 and its most since selling 2.89 million in 2019. Its fourth-quarter sales rose 21%. 

Both companies reported gains in electric vehicles (EVs). Ford sold a total of 285,291 hybrid, plug-in hybrid and electric vehicles, up 38%, while GM’s EV sales jumped 50% to 114,432 vehicles. 

Shares of Ford were up 2.5% in late trading Friday, while GM advanced nearly 1%. Ford shares have lost about 20% of their value since the start of 2024, while GM has gained more than 40%.

–Andrew Kessel

JPMorgan Keeps ‘Outperform’ on Carvana Despite Short-Seller Report

January 03, 2025 02:36 PM EST

Carvana (CVNA) shares continued their slide Friday after short-selling firm Hindenburg Research declared a short position in the company, but JPMorgan analysts stuck with their “overweight” call on the used-car retailer.

JPMorgan wrote Friday that its own research on Carvana “has not suggested any red flags” regarding the company.

The Hindenburg report on Thursday sounded alarm bells about the company’s gross profit per unit and practice of selling consumer auto loans to third parties. Specifically, the hedge fund claimed to have uncovered $800 million in loan sales to an unidentified “related third party” and said that nearly 26% of the company’s gross profit over the past nine months was due to such loan sales.

JPMorgan said in a note that there is “room for CVNA to provide more disclosure,” but said the issues around auto-industry loan defaults aren’t new and that demand for used cars remains strong. “We do not see CVNA’s reported economics as inflated,” the analysts added. 

Shares of Carvana were down nearly 9% Friday afternoon. The company’s shares have, however, nearly quadrupled in value over the pas year—a huge turnaround after bankruptcy concerns hurt the company’s share price in previous years.

–Andrew Kessel

Alcohol Company Stocks Slide After Surgeon General Warning

January 03, 2025 01:45 PM EST

Shares of companies that make and distribute beers, wines and spirits lost ground Friday as investor weighed how a new warning from health authorities about the dangers of alcohol could affect consumer habits and sales.

Shares of Diageo (DGE), which makes Johnnie Walker whiskey, Tanqueray gin and Guinness beer among other alcohol brands, were down more than 3% in afternoon trading. Beer companies Constellation Brands (STZ) and Anheuser-Busch InBev (BUD) were down 1% and 2%, respectively.

Surgeon General Dr. Vivek Murthy on Friday called for placing new warning labels on alcohol as the U.S. Department of Health and Human Services (HHS) said that drinking is the third-leading preventable cause of cancer in the country.

“Alcohol is a well-established, preventable cause of cancer responsible for about 100,000 cases of cancer and 20,000 cancer deaths annually in the United States – greater than the 13,500 alcohol-associated traffic crash fatalities per year in the U.S. – yet the majority of Americans are unaware of this risk,” Murthy said.

According to HHS, alcohol is linked to a higher risk of developing breast, colorectum, esophagus, liver, mouth, throat and larynx or voicebox cancer. Only smoking tobacco and obesity pose a greater cancer risk when looking at factors over which people have control, the department said.

Read the full story here about the new government warning.

–Sarina Trangle

Rivian Soars as EV Maker Say Production Issues Fixed

January 03, 2025 12:07 PM EST

Shares of Rivian Automotive (RIVN) soared Friday after the maker of electric trucks and SUVs reported full-year production that exceeded its previously lowered estimates and said that a problem that affected output had been resolved.

The Illinois-based manufacturer said Friday it built 49,476 vehicles in 2024. In October, it had lowered its estimate to a range of 47,000 to 49,000 from the earlier outlook of 57,000.

The change came after the company said that it experienced a disruption “due to the shortage of a shared component” on the platforms that put together its R1T truck, R1S SUV, and RCV commercial van.

In its latest statement, Rivian said that the component issue “is no longer a constraint on Rivian’s production.”

Rivian said that it delivered 51,579 vehicles last year. It had anticipated a 2024 delivery total of 50,500 to 52,000.

Rivian shares were up 21% late Friday morning, trading at their highest levels in five months. Despite today’s gains, the stock has lost more than 20% of its value over the past year.

–Bill McColl

Coinbase Levels to Watch as Stock Rallies to Start 2025

January 03, 2025 11:08 AM EST

Coinbase (COIN) shares are off to a strong start this year following a recent retracement.

Since Donald Trump’s election win in early November, the stock has gained more than 30% amid optimism that his administration and a crypto-friendly Republican Congress will position the United States as a global cryptocurrency leader, creating a more favorable regulatory environment for exchanges like Coinbase.

Looking ahead, the company also sits well positioned to benefit for increased trading activity, with Bitcoin (BTCUSD) still hovering just below the $100K level and other large-cap altcoins, such as Ethereum (ETHUSD) and Solana (SOLUSD), performing strongly since the election.

Coinbase shares were up more than 3% at around $266 in recent trading, after gaining more than 3% yesterday.

Since setting a new three-year high in early December, the stock has retraced about half of its post-election rally, with the price sitting roughly midway between the 200- and 50-day MAs.

While the relative strength index (RSI) confirms weak price momentum with a reading around 40, the stock has shown a historical tendency to bounce when the indicator falls to this level. Moreover, below-average volumes have accompanied the recent move lower, indicating a lack of selling conviction.

Investors should watch key support levels on the Coinbase chart around $220 and $187, while also monitoring important resistance levels near $283 and $342.

Read the full technical analysis piece here.

–Timothy Smith

US Steel Shares Sink After Biden Blocks Nippon Steel Deal

January 03, 2025 10:32 AM EST

Shares of U.S. Steel (X) tumbled Friday as President Joe Biden blocked the $14.1 billion sale of the iconic American company to Japan’s Nippon Steel.

The White House announced the decision Friday, with the rejection based on the view that the sale posed a threat to national security.

“As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” Biden said.

US Steel shares were more than 6% in recent trading. The stock is down 36% over the past year.

Before the formal blocking of the deal, The New York Times reported that a blockage of the deal could hurt U.S. relations…