David Paul Morris, Bloomberg via Getty Images
The Key Take-Aways
- The S&P 500 slid 0.5% on Thursday, Dec. 12, 2024, following a report showing hotter-than-expected wholesale inflation data in November.
- Adobe shares tumbled as lackluster sales guidance provoked uncertainty about the multimedia software maker's traction in the AI market.
- Warner Bros. shares surged after the media giant announced plans to separate its linear TV business from its film studio and streaming operations. Discovery shares surged following the announcement by media giant Warner Bros. that it would separate its linear television business from film studios and streaming operations.
The major U.S. equity indexes fell Thursday, after the Producer Price Index showed a higher-than-anticipated increase in wholesale prices during November.
Next week, the Federal Reserve will meet and it is widely expected that interest rates will be lowered. The latest signs of persistent inflation have added to the uncertainty surrounding the Fed’s path in 2025.
The S&P 500 fell 0.5%. Dow also fell 0.5% while Nasdaq fell 0.7%. The Nasdaq has now dropped below the threshold of 20,000 points it had breached during the last session.
Adobe (ADBE) shares plunged 13.7%, the worst performance of any S&P 500 stock on Thursday, after the software provider issued lower-than-expected sales guidance. Adobe (ADBE), a software provider, posted a record-breaking fourth-quarter profit and sales despite a strong demand from artificial intelligence. The revenue outlook was skewed by concerns over Adobe’s ability to compete in the highly competitive AI generative market.
Nordson, a manufacturer of industrial adhesives (NDSN), also beat expectations for its fourth-quarter fiscal sales and profit. However, its stock fell 8.2% after disappointing fiscal-2025 guidance. It said that a smaller backlog, and the restrained spending of its customers were factors in its cautious outlook. However, it noted positive contributions from Atrion’s acquisition.
Western Digital’s (WDC) shares fell 5.6%. The move lower came after management said that pricing for NAND—a type of flash memory used in smartphones and solid-state drives—will likely remain under more pressure than previously anticipated.
Analysts at UBS cited a lower risk/reward ratio in light of recent gains in steel stocks. UBS’s downgrade of Nucor and Steel Dynamics shares (STLD), which both lost approximately 5%, impacted the stocks.
Warner Bros. Discovery (WBD), a media company, announced that it would separate its TV business from their streaming and movie studios. The news caused shares of the media company to soar by 15.4%. It announced that it will create two separate operating divisions. One for its film studios and global streaming platform, while the other would focus on linear television. Warner Bros. CEO, David E. Cohen said that the company will benefit from this restructuring. Discovery will be able to adapt more easily to changing media environments.
C.H. Robinson Worldwide’s (CHRW), the freight carrier, held an investor day. Shares of Robinson Worldwide rose by 4.5%. The CEO of the logistic firm, who was present at the event, emphasized the company’s transformation into a lean operation model, its successful implementation of AI technology and the ability to reduce the potential impact of tariffs in the new presidential administration.
MetLife’s (MET), shares jumped by 3.6% following the announcement of a new five-year strategy to improve profits, increase free cashflow and reduce expenses. Under its new strategy, the firm outlined four key areas it plans to focus on: leveraging retirement, expanding its asset management division, and growing in international markets.
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