Stocks Making the Biggest Moves
The U.S. stock market experienced some turbulence, while trading under the symbol "CART," opened at $30 and surged by as much as 32% during intraday trading before closing at $33.70, marking a significant 12% increase.
Updated Sep 20, 2023
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Stocks Making the Biggest Moves
On Tuesday, U.S. stocks experienced a decline, and Treasury yields saw an increase as investors braced themselves for the upcoming interest rate decision from the Federal Reserve, scheduled for the following day. The Dow Jones Industrial Average dropped by 0.3%, while the Nasdaq and the S&P 500 both slipped by 0.2%.
The Federal Open Market Committee (FOMC) met to discuss the state of the economy and inflation, which had risen recently due to higher oil prices. It's expected that policymakers will maintain current interest rates while indicating that rates are likely to remain elevated for an extended period. In other news, Instacart made its debut on the Nasdaq, with shares trading under the symbol "CART" and opening at $30.
They surged by as much as 32% during intraday trading, ultimately closing at $33.70, marking a 12% increase. Asian and European stocks also faced declines amid rising oil prices and increased natural gas rates, while U.S. stocks had a relatively flat performance on the previous day.
Here's a roundup of notable stock movements:
|
Company |
Stock Movement |
|
Starbucks |
-2% |
|
Instacart |
+12.3% |
|
Disney |
-3.3% |
|
Super Micro Computer |
+1.6% |
|
Deere |
-3% |
|
Planet Fitness |
-4.2% |
|
Arm Holdings |
-5.4% |
|
Array Technologies |
+4.3% |
|
Rocket Lab |
-7.4% |
|
Lazard |
-1.2% |
|
Royal Caribbean |
+2.4% |
|
Rackspace Technology |
+36% |
Starbucks:
The coffee giant's shares declined by 2% due to a downgrade from TD Cowen, which shifted its rating to "market perform." Analyst Andrew Charles expressed concerns about macroeconomic challenges in China that could impact consumer spending at Starbucks stores.
Instacart:
This grocery delivery company had an impressive debut on the public market, with its shares rising by approximately 12.3% and closing at $33.70. Instacart's initial public offering was priced at $30 a share, at the upper end of the expected range.
Disney:
Disney's stock saw a 3.3% drop following the company's announcement that it intends to significantly increase its spending on its parks and cruises businesses, allocating around $60 billion.
Super Micro Computer:
Shares of this computer technology company climbed by 1.6% after Barclays initiated coverage with an "overweight" rating. Analyst George Wang suggested that the stock could benefit from the ongoing trend of artificial investment.
Deere:
Deere's industrial stock fell by nearly 3% after being downgraded by Evercore from "outperform" to "in line." Evercore indicated that revenue declines and cuts in agriculture production are anticipated for Deere's next fiscal year.
Planet Fitness:
Shares of the gym franchise slid by 4.2% following a downgrade from JPMorgan, which shifted its rating to "neutral" from "overweight." The downgrade was influenced by the recent unexpected CEO change and uncertainties in the macroeconomic outlook.
Arm Holdings:
The semiconductor company's shares, which recently went public, dropped by 5.4%. Redburn Atlantic Equities initiated coverage with a "neutral" rating, suggesting that the stock is currently overvalued.
Array Technologies:
This solar tracker solutions provider gained 4.3% after being added to Bank of America's US1 list, which described Array as a "diamond in the rough."
Rocket Lab:
Shares of the aerospace manufacturer tumbled by 7.4% following Rocket Lab's first launch failure in over two years. The uncrewed 41st Electron rocket launch failed a few minutes after liftoff in New Zealand.
Lazard:
The stock fell by 1.2% after Goldman Sachs downgraded the investment bank to "sell" from "neutral," citing a challenging outlook.
Royal Caribbean:
The cruise company's shares rose by 2.4% after an upgrade to "buy" from "hold" by Truist. Truist noted strong forward-looking trends for 2024 and 2025 in the cruise industry.
Rackspace Technology:
This cloud computing company had a notable day, with a 36% gain in its stock price. Raymond James upgraded Rackspace to "outperform" from "market perform," citing positive views on the company's management execution.
What Causes a Stock to Increase and Fall?
Stock prices rise and fall due to a multitude of factors influenced by market dynamics, investor sentiment, and economic conditions. One of the primary drivers is supply and demand. When more investors want to buy a particular stock, its price tends to go up, and when more investors want to sell, the price tends to fall. This demand can be influenced by various factors such as company performance, news, economic indicators, or even market sentiment.
Additionally, company-specific events like earnings reports, product launches, or management changes can significantly impact stock prices. Market-wide factors like interest rates, inflation, and geopolitical events can also influence overall market trends.
Furthermore, psychological factors play a role. Investor sentiment, fear, and greed can drive short-term fluctuations in stock prices. These sentiments can lead to market bubbles, where prices rise rapidly and fall just as quickly when sentiment shifts.
It's important to note that stock market movements are often unpredictable and influenced by a complex interplay of these and other factors, making it challenging to pinpoint a single cause for a stock's rise or fall. Diversification and a long-term investment approach are strategies often employed to mitigate the risks associated with stock market volatility.
What is Short Squeeze?
A short squeeze occurs when traders bet against a company's stock by borrowing and selling shares, hoping the price will drop so they can buy them back at a lower cost. However, if the stock's price doesn't fall as expected and starts rising instead, short sellers may be forced to buy back shares at higher prices to close their positions. This increased demand for the stock drives the price even higher.
The biggest short squeeze in history happened to Volkswagen stock in 2008. Initially seen as a struggling company, Volkswagen's fortunes took a sudden turn when Porsche revealed it held a controlling stake in the company. This surprising news led short sellers to rush to buy shares to cover their positions, causing the stock price to skyrocket. At one point, Volkswagen briefly became the world's largest company by market value during this historic short squeeze
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Stocks Making the Biggest Moves - FAQs
1. Why did Starbucks stock fall?
Starbucks stock fell due to concerns about macroeconomic challenges in China affecting consumer spending at its stores.
2. What caused Instacart's stock to surge on its debut?
Instacart's stock surged on its debut because it was priced at the high end of the expected range, boosting investor confidence.
3. Why did Disney's stock slump?
Disney's stock slumped after the company announced plans to significantly increase spending on its parks and cruises businesses.
4. What led to Super Micro Computer's stock increase?
Super Micro Computer's stock increased as Barclays initiated coverage with an overweight rating, citing potential benefits from a growing trend in artificial intelligence.
5. Why did Planet Fitness stock slide?
Planet Fitness' stock slid after JPMorgan downgraded it to a neutral rating due to the CEO's unexpected departure and uncertain economic conditions.
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