What you need to know…

The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.56%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.75%.  Stock indexes Tuesday posted moderate gains, with the Dow Jones Industrials climbing to a 2-1/2 month high.

A jump of more than +5% in Amgen boosted the Dow Jones Industrials after Oppenheimer raised its price target on the stock.  Also, a rally in chip stocks led technology stocks higher. Finally, lower T-note yields supported stocks, as the 10-year T-note yield fell -9.3 bp to 4.121%. 

The markets are braced for the outcome of Tuesday’s U.S. Election Day, although results could be delayed by close races and legal challenges.

ASML Holding NV rose by more than +4% to lead gainers in chip stocks Tuesday after Morgan Stanley named the stock one of its top picks for European semiconductor stocks. Also, Welltower jumped +8%, and Dupont de Nemours rallied more than +7% after reporting better-than-expected Q3 earnings results.

On the negative side, Take-Two Interactive Software tumbled more than -13% after reporting Q2 net bookings of $1.50 billion, weaker than the consensus of $1.55 billion, and cutting its full-year bookings estimate.  Also, Tesla closed down more than -2% after recalling 40,168 Model S and Model X vehicles from 2017-2021 due to a problem with their power steering assist systems. 

Stock indexes Tuesday afternoon briefly dropped into negative territory after Bitcoin sank more than -11% to a 2-year low.  Bitcoin and other cryptocurrencies plunged Tuesday after crypto exchange Binance bought rival FTX.com, which sparked an exodus of investors from cryptocurrencies on liquidity concerns about FTX.com.  Terms of the emergency buyout were scant after Binance said the agreement came after “a significant liquidity crunch” overtook FTX.com.  Reuters reported that FTX.com was hit with about $6 billion in withdrawals in the 72 hours before Tuesday morning.

Today’s stock movers…

Chip stocks moved higher Tuesday to lead gainers in technology stocks after Morgan Stanley named ASML Holding NV one of its top picks for European semiconductor stocks.  As a result, ASML Holding NV (ASML) closed up more than +4%.  Also, Microchip Technology (MCHP) and NXP Semiconductors (NXPI) closed up more than +3%.  In addition, Qualcomm (QCOM), Lam Research (LRCX), Applied Materials (AMAT), and Analog Devices (ADI) closed up more than +2%. 

Nvidia (NVDA) closed up more than +2% after it said it began making a chip for China that meets a U.S. export ban, boosting hopes that the company won’t see a sizeable hit to its revenue from the trading curbs. 

Cruise line operators rallied Tuesday after Norwegian Cruise Line Holdings reported a Q3 adjusted loss of -64 cents per share, a smaller loss than the consensus of -70 cents.  As a result, Norwegian Cruise Line Holdings (NCLH) closed up more than +4%.  Also, Carnival (CCL) and Royal Caribbean Cruises (RCL) closed up more than +3%.

Expeditors International of Washington (EXPD) closed up more than +9% after reporting Q3 EPS of $2.54, well above the consensus of $1.97.

Welltower (WELL) closed up more than +8% after reporting Q3 revenue of $1.47 billion, better than the consensus of $1.45 billion. 

Dupont de Nemours (DD) closed up more than +7% after reporting Q3 net sales of $3.32 billion, stronger than the consensus of $3.21 billion. 

Amgen (AMGN) closed up more than +5% to lead gainers in the Dow Jones Industrials and Nasdaq 100 after Oppenheimer raised its price target on the stock to $300 from $290.

Lumen Technologies (LUMN) closed up more than +4% on signs of insider buying after an SEC filing showed Chairmans Glenn bought $118,400 of his company’s stock last Friday. 

Take-Two Interactive Software (TTWO) closed down more than -13% Tuesday to lead losers in the S&P 500 after reporting Q2 net bookings of $1.50 billion, weaker than the consensus of $1.55 billion and cutting its full-year bookings estimate to $5.4 billion-$5.5 billion from a prior estimate of $5.8 billion-$5.9 billion, below the consensus of $5.91 billion. 

Medtronic Plc (MDT) closed down more than -6% after a clinical trial of the company’s Symplicity Spyral Renal Denervation system for treating high blood pressure missed its primary efficacy endpoint.

Constellation Energy (CEG) closed down more than -6% to lead losers in the Nasdaq 100 after reporting Q3 adjusted Ebitda of $592 million, weaker than the consensus of $593.6 million. 

International Flavors & Fragrances (IFF) closed down more than -4% after reporting Q3 net sales of $3.06 billion, below the consensus of $3.07 billion, and cutting its full-year sales forecast to $12.4 billion-$12.5 billion from a previous forecast of $12.6 billion-$13.0 billion.

Tesla (TSLA) closed down more than -2% after it recalled 40,168 Model S and Model X vehicles from 2017-2021. The recall was announced due to a problem with the power steering assist system that could cause the loss of power steering assist when driving on rough roads or after hitting a pothole, increasing the risk of a crash.

Across the markets…

Dec 10-year T-notes (ZNZ22) on Tuesday closed up +20.5 ticks, and the 10-year T-note yield fell -9.3 bp to 4.121%.  Bond dealer short covering boosted T-note prices Tuesday after dealers lifted their short hedges in T-notes put on Monday after 15 U.S. companies sold $20.6 billion of corporate debt to raise capital in the U.S. investment-grade primary bond market, the most in 2 months. 

T-note prices extended their gains Tuesday afternoon on strong demand for the Treasury’s $40 billion auction of 3-year T-notes.  The auction had a bid-to-cover ratio of 2.57, above the 10-auction average of 2.48. 

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