Midday Fly By: Qualcomm reports Q4 beat, Schwab acquires Forge

The major averages were sharply lower near noon as investors sift through mixed signals from corporate earnings and economic data. Positive earnings have offered some lift, but caution prevails amid warnings out of the tech sector and concerns that valuations may be excessive. Meanwhile, companies in the AI space are under pressure amid concerns around valuation.

On the macro front, recent data showed the U.S. services sector expanded more than expected in October and private payrolls ticked ahead of forecasts. This complicates expectations about when the Federal Reserve will move next on interest rates. 

Looking to commodities, gold prices have edged lower, as the “safe haven” asset remains below $4,000. Oil prices were also trading lower, keeping the commodity under $60 per barrel.

 Get caught up quickly on the top news and calls moving stocks with these five Top Five lists.

1. STOCK NEWS:

• Qualcomm (QCOM) reported better-than-expected Q4 results and provided upbeat Q1 guidance
• Snap (SNAP) reported upbeat Q3 earnings and revenue while Perplexity agreed to pay Snap $400M as part of an AI search partnership
• DoorDash (DASH) reported mixed Q3 results, with the company saying it still believes it’s in its “early stages”
• Charles Schwab (SCHW) agreed to acquire Forge Global (FRGE) in a deal worth about $660M
• EchoStar (SATS) agreed to sell AWS-3 spectrum licenses to SpaceX for $2.6B

2. WALL STREET CALLS:

• HSBC upgraded Caterpillar (CAT) to Buy on power generation growth
• CarMax (KMX) was downgraded by no less than three firms, including JPMorgan going to Underweight with no “quick fix” seen for the company’s near-term challenges
• DigitalOcean (DOCN) double upgraded to Buy at BofA on AI inferencing demand tailwinds
• Duolingo (DUOL) downgraded at both KeyBanc and Citizens JMP after earnings
• Elf Beauty (ELF) downgraded to Neutral at Piper Sandler following its fiscal Q2 report

3. AROUND THE WEB:

• Google (GOOGL) have reached a comprehensive settlement with Epic Games over Epic’s 2020 antitrust lawsuit, with Android and Google Play changes to expand competition and choice, pending a U.S. judge’s approval, Reuters says
• Deutsche Bank (DB) is exploring strategies to hedge its exposure to data centers, like shorting AI stocks, after extending billions in debt to hyperscalers, FT reports
• Volkswagen (VWAGY) has begun developing its first in-house chip, being developed by a joint venture between its software unit Cariad and Horizon Robotics (HRZRF), FT says
• A stockpile of unreported documents shows for the past three years Meta (META) has failed to identify and stop ads that exposed Facebook, Instagram, and WhatsApp users to fraudulent e-commerce and investment schemes, illegal online casinos, and banned medical products, Reuters reports
• SoftBank Group (SFTBY) weighed a potential takeover of Marvell (MRVL) earlier this year, Bloomberg says

4. MOVERS:

• Golden Entertainment (GDEN) increases after announcing it will be acquired by Blake Sartini and entered a leaseback with VICI Properties (VICI)
• Stagwell (STGW) gains after announcing a partnership with Palantir (PLTR)
• Iovance Biotherapeutics (IOVA) and Fastly (FSLY) higher after reporting quarterly results
• Aspen Aerogels (ASPN) falls after reporting Q3 results and cutting its guidance for FY25
• ACV Auctions (ACVA) and Porch Group (PRCH) lower after reporting quarterly results

5. EARNINGS/GUIDANCE:

• Robinhood (HOOD) reported Q3 results, with EPS and revenue beating consensus
• Figma (FIG) reported Q3 results, with CEO Dylan Field commenting, “Q3 was the best quarter in Figma’s history”
• Moderna (MRNA) reported Q3 results and narrowed its guidance for FY25
• Lyft (LYFT) reported Q3 results, with CEO David Risher commenting, “Our Q3 results prove that Lyft’s comeback strategy is working”
• Warner Bros. Discovery (WBD) reported Q3 results, with EPS beating consensus

INDEXES:

Near midday, the Dow was down 1.01%, or 477.31, to 46,833.69, the Nasdaq was down 2.01%, or 471.94, to 23,027.86, and the S&P 500 was down 1.21%, or 82.49, to 6,713.80.