Stocks were choppy to start the holiday-shortened week, bouncing between positive and negative territory throughout Tuesday’s session. But the three main benchmarks managed to close in the green, with the S&P 500 notching a new record close.
Thanks to a late burst of buying power, the S&P 500 closed up 0.2% at 6,129, the Nasdaq Composite added 0.07% to 20,041 and the Dow Jones Industrial Average edged up 0.02% to 44,556.
Intel soars on breakup buzz
Intel (INTC) surged 16.1% after a report in The Wall Street Journal hinted at potential deals with Taiwan Semiconductor Manufacturing Co. (TSM) and Broadcom (AVGO) that would split the chipmaker in two.
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BofA Securities analyst Vivek Arya cautions against getting too excited about a potential breakup of Intel. No parties have made any statements on the speculation, he says, and any possible split “could be time-consuming and complicated.”
Arya maintained an Underperform (Sell) rating on INTC due to its “organic risks,” which include the lack of an artificial intelligence (AI) pipeline and high competition.
Constellation Brands gets a Buffett boost
Constellation Brands (STZ) was another notable gainer Tuesday, jumping 4.0% on news it was one of the stocks Warren Buffett bought in Q4. According to a 13-F filing released late Friday, Buffett’s holding company purchased 5.6 million shares of STZ between October 1 and December 31, though this new stake accounts for just about 0.5% of the Berkshire Hathaway equity portfolio.
Heading into Tuesday’s session, the consumer staples stock was down nearly 26% on a total return basis (price change plus dividends) for the year to date. But UBS Global Research analyst Peter Grom says this reflects the pricing in of uncertainty surrounding the impact of the California wildfires and Trump tariffs.
Over the long term, Grom sees “solid building blocks” to top- and bottom-line growth. While “some patience may be required,” the analyst thinks the risk/reward setup is “skewed nearly 2:1 to the upside.”
Other stocks on the move
Nike (NKE) was the best Dow Jones stock on Tuesday, gaining 6.2% after the athletic apparel and footwear maker disclosed a new partnership with Kim Kardashian’s Skims.
Meta Platforms (META) slumped 2.8% to snap its 20-day-long winning streak – the lengthiest on record for the Facebook parent.
Medtronic (MDT) fell 7.3% after the medical supplies maker reported lower-than-anticipated fiscal third-quarter revenue.
Fed minutes on tap
In economic news, data from the National Association of Home Builders (NAHB) showed builder sentiment fell 5 points from January to February to 42 – the lowest reading in five months.
“Uncertainty on the tariff front helped push builders’ expectations for future sales volume down to the lowest level since December 2023,” says Carl Harris, NAHB chairman and a custom home builder from Wichita, Kansas.
Harris adds that incentives could be weakening as a sales tactic “as elevated interest rates reduce the pool of eligible home buyers.”
Looking ahead to Wednesday’s economic calendar, Wall Street will watch for the mid-afternoon release of the minutes from the Federal Reserve’s January meeting. The central bank held rates steady last month and Fed Chair Jerome Powell hinted that a March rate cut could also be off the table.
BofA Securities economists will be focused on two things in particular: (1) does the Fed believe the rate-cutting cycle is over, and (2) what the central bank is thinking regarding the Trump administration’s policy agenda.
During last week’s congressional testimony, Fed Chair Powell said that it’s not the central bank’s “job to make or comment on tariff policy.”