Key Takeaways
- The S&P 500 was flat on Monday, Aug. 12, 2024, ahead of key data points this week that could offer insight into the uncertain economic environment.
- KeyCorp shares took off after the regional bank announced a $2.8 billion investment from Bank of Nova Scotia.
- Shares of Albemarle tumbled amid an ongoing slump in lithium prices.
Major U.S. equities indexes were little changed on Monday. Fresh off a week of volatile trading driven by economic concerns, key data on inflation, retail sales, and the housing market will be in focus this week for those trying to assess the health of the economy.
The S&P 500 was essentially flat to start the trading week. Technology was the top-performing sector, helping the Nasdaq edge 0.2% higher, while the Dow was down 0.4%.
KeyCorp (KEY) shares surged 9.1%, marking the top daily performance in the S&P 500, after the regional bank announced a $2.8 billion investment from Bank of Nova Scotia (BNS). The transaction gives Scotiabank a 14.9% stake in KeyCorp. The company said the investment from the Canada-based financial giant represented an optimal way to raise capital and enhance its strategic position.
Super Micro Computer (SMCI) shares added 6.3%, clawing back a portion of the losses posted last week after the server and data storage firm posted lower-than-expected quarterly profits. Supermicro noted that its decreased gross margins during the quarter reflected higher costs of ramping up production of its direct liquid cooling (DLC) technology for artificial intelligence (AI) data centers. A report in The Wall Street Journal over the weekend highlighted the potential for liquid cooling to improve data center energy efficiency, suggesting Supermicro’s DLC investments could pay off.
Shares of AI chip behemoth Nvidia (NVDA) gained 4.1% as Bank of America named the stock one of its top “rebound” picks. Analysts pointed to Nvidia’s solid position in the data center market as tech giants prepare to boost infrastructure spending. More positive commentary came from analysts at UBS, who said a reported delay in the launch of Nvidia’s Blackwell AI chip could turn out to be less consequential than originally anticipated.
Shares of Albemarle (ALB), the world’s largest lithium producer, tumbled 6.9%, posting the widest loss of any S&P 500 stock. Slumping lithium prices, which have fallen more than 80% since the beginning of 2023 amid lower electric vehicle (EV) demand, remain an overhang on Albemarle stock. In its most recent earnings report, the company disclosed a $188 million net loss and said it would add to a growing list of cost-reduction initiatives.
Solventum (SOLV) shares slid 4.8% on the day after analysts at Wells Fargo trimmed their price target on the stock. The medical technology company, which completed its spinoff from 3M (MMM) in April, reported second-quarter results last week, announcing a 70% year-over-year decline in net income, based on figures carved out from 3M’s health care business. Reduced sales growth for wound care and surgical sterilization products weighed on Solventum’s performance.
Shares of Warner Bros Discovery (WBD) fell 4.5%, extending losses posted in the wake of Thursday’s earnings report. The entertainment giant reported a quarterly loss of nearly $10 billion, reflecting the impact of a write-down in the value of its cable networks. The cable business remains under pressure from cord-cutting and the success of streaming services.