Joey Solitro
Stocks closed mostly higher Thursday as investors cheered the latest round of corporate earnings. A solid reading on retail sales also helped boost sentiment too.
Starting with the earnings calendar, Taiwan Semiconductor Manufacturing (TSM) blew Wall Street away with its third-quarter results.
For the three-month period ended September 30, the semiconductor manufacturer said earnings jumped 50% year-over-year, while revenue rose 36%. TSM also issued a strong outlook for its fourth quarter, citing encouraging demand for artificial intelligence (AI) and smartphone chips.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Needham analyst Charles Shi expects this impressive growth to continue over the next few years "primarily driven by steady introductions of new technology nodes that are largely unaffected by industry cyclicality."
He recommends "TSM stock as a core holding for investors who look to invest in semiconductors, which we view as the foundation of the expanding digital economy."
As a result of its impressive beat-and-raise quarter, the semiconductor stock soared 9.8% and closed above the $1 trillion market-cap threshold for the first time ever. TSM's surge also had a halo effect on other chipmakers, including Nvidia (NVDA, +0.9%) and Broadcom (AVGO, +2.7%).
Elevance Health earnings pressured by rising Medicaid costs
Elsewhere, Elevance Health (ELV) stock tumbled 10.6% after the health insurance company reported lower-than-expected earnings for its third quarter and cut its full-year profit forecast due to "unprecedented challenges" and rising costs in its Medicaid business.
Still, most of Wall Street remains upbeat on ELV. "We believe the power of Elevance's idiosyncratic long-term growth drivers has been significantly underappreciated by investors," writes Baird analyst Michael Ha in an October 15 note.
Positive developments in its Carelon healthcare services segment have the company "fully on its way to closing the valuation multiple gap to both UnitedHealth Group (UNH, -0.9%) and Humana (HUM, +4.2%)," he adds.
Lucid shares sink on stock offering news
Lucid Group (LCID) was another notable decliner, plunging 18.0% after the electric vehicle maker announced a public stock offering of nearly 262.5 million shares. The company also warned that it anticipates third-quarter losses from operations to range between $765 million to $790 million, more than the $752 million analysts forecast.
Stifel analyst Stephen Gengaro has a Hold rating on the EV stock amid concerns over Lucid's significant cash burn. However, he also thinks the company's Lucid Air electric car is an "outstanding vehicle" and believes the recently unveiled Gravity SUV will give it access to the lucrative sports utility vehicle segment.
Retail sales come in strong for September
In economic news, data from the Census Bureau show retail sales rose 0.4% from August to September and were up 1.7% year over year. The month-over-month gain exceeded the 0.3% increase economists were expecting as well as the 0.1% improvement seen the month prior.
Excluding automobiles and gasoline, retail sales were up 0.7% on a monthly basis and 3.7% annually.
"The economy is in pretty good shape," says Bill Adams, chief economist at Comerica. "With the Fed expected to continue lowering interest rates through the turn of the year, credit-sensitive sectors of the economy should perk up in coming quarters, sustaining the economic expansion into 2025."
Jim Swift, CEO of Buxton, a leading consumer intelligence platform, notes that the September retail sales data "reflects growing consumer confidence as well as evolving dynamics in spending habits." Indeed, nonstore retailers, which include e-commerce sales, were up 7.1% year over year.
"Retailers with strong online and physical store integration are well-positioned to capitalize on this momentum as we head into the holiday season," Swift adds.
As for the main indexes, the Dow Jones Industrial Average gained 0.4% to 43,239 and the Nasdaq Composite added 0.04% to 18,373. The S&P 500 ran out of steam near the close, ending down 0.02% at 5,841.
Related content
- Election Updates: What Candidates Are Saying About Your Money
- The Best Growth Stocks to Buy
- Kiplinger's Economic Calendar for This Week
-
How Prepaid Verizon Phone Service Works and When It's a Smart ChoiceExplore the differences between Verizon Prepaid and Verizon Postpaid plans—costs, perks, flexibility, and when going prepaid makes sense.
-
Try This One-Minute Test to Uncover Hidden Health RisksFinding out this little-known fact about your body could reveal your risk of heart disease and more. It's a simple, free check for healthy aging.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
Dow Adds 472 Points After September CPI: Stock Market TodayIBM and Advanced Micro Devices created tailwinds for the main indexes after scoring a major quantum-computing win.
-
October Fed Meeting: Live Updates and CommentaryThe October Fed meeting is a key economic event, with Wall Street waiting to see what Fed Chair Powell & Co. will do about interest rates.
-
The Delayed September CPI Report is Out. Here's What it Signals for the Fed.The September CPI report showed that inflation remains tame – and all but confirms another rate cut from the Fed.
-
New Opportunity Zone Rules Triple Tax Benefits for Rural Investments: Here's Your 2027 StrategyNew IRS guidance just reshaped the opportunity zone landscape for 2027. Here's what high-net-worth investors need to know about the enhanced rural benefits.
-
Honeywell Leads Dow Higher: Stock Market TodayOil prices got a lift after the Treasury Department announced new sanctions on Russia's two largest oil companies.
-
The OBBB Ushers in a New Era of Energy Investing: What You Need to Know About Tax Breaks and MoreThe new tax law has changed the energy investing landscape with expanded incentives and permanent tax benefits for oil and gas production.
