Key Takeaways
- The S&P 500 added 0.2% on Thursday, June 13, 2024, extending its string of record closes as the latest producer price index data reaffirmed a cooldown in inflation.
- Broadcom shares soared after the chipmaker topped quarterly sales estimates, citing strong demand for AI products.
- Shares of Paramount Global tumbled amid reports that its controlling stakeholder ended merger negotiations with Skydance Media.
The S&P 500 and Nasdaq Composite extended their winning streaks Thursday after another inflation indicator came in softer than expected, adding to hopes that the Federal Reserve could cut interest rates this year.
Producer Price Index data released early Thursday showed a deceleration in wholesale price increases last month. That came on the heels of a Consumer Price Index report Wednesday that also showed a reduction in inflationary pressures.
The S&P 500 advanced 0.2% Thursday, while strength in the technology sector led the Nasdaq 0.3% higher. Both indexes posted all-time closing highs for the fourth consecutive session. The Dow closed Thursday’s session 0.2% lower.
Broadcom (AVGO) shares jumped 12.3% after the semiconductor and software firm reported better-than-expected second-quarter revenue and announced a 10-for-1 stock split. Robust demand for artificial intelligence (AI) products and a strong quarter from VMware, the cloud computing company that Broadcom acquired last year, helped drive the sales beat.
Broadcom’s strong report, along with upbeat guidance from Oracle (ORCL) earlier this week, created another wave of optimism around companies poised to benefit from a boom in AI technology. Shares of Super Micro Computer (SMCI), which produces high-performance servers and data storage systems, skyrocketed 12.4%, marking Thursday’s top performance in the S&P 500.
Shares of computer networking provider Arista Networks (ANET) advanced 6.5% after Morgan Stanley boosted its price target on the stock to $325 from $300 while reiterating an “overweight” rating. The company has a strong position in the data center networking market, with clients including Microsoft (MSFT) and Meta (META), and expectations for AI-driven growth have helped lift Arista stock more than 40% year to date.
Shares of Paramount Global (PARA) suffered the heaviest losses of any S&P 500 component, plunging 6.9% following reports that the media giant and its controlling stakeholder Shari Redstone have abandoned takeover talks with production company Skydance Media. Redstone was reportedly dissatisfied with updates to the terms of the deal that would have seen a lower payout for National Amusements, her family’s holding company, which owns 77% of Paramount’s voting shares, and is said to be considering a sale of National Amusements rather than a merger.
Paramount was not the only big media stock to post losses on Thursday. Shares of Warner Bros Discovery (WBD) sank 6.7%. Although the company recently secured U.S. broadcasting rights for the French Open tennis tournament, it posted an operating loss as well as revenue declines across several important segments in its most recently reported quarter, reflecting challenges related to customer cord-cutting and evolving viewing habits.
Shares of Generac Holdings (GNRC), a provider of home standby generators, slipped 4.6% after analysts at equities research firm Janney Montgomery Scott downgraded the stock to “neutral.” The company trimmed its full-year guidance earlier in 2024 amid a slowdown in demand for its commercial products.