Dow Jones Today: Nasdaq Tumbles; Cannabis stocks are increasing

Cannabis stocks soar on reports of possible reclassification

56 minutes ago

Cannabis stocks soared on Tuesday after the Associated Press reported that the US Drug Enforcement Administration (DEA) planned to reclassify marijuana as a less dangerous drug class.

The DEA’s proposal, according to sources who spoke with the AP under the condition of anonymity, would acknowledge the medical applications of marijuana and acknowledge that the substance has less potential for abuse than more dangerous drugs.

Marijuana is currently classified as a Schedule I drug along with heroin and LSD. The DEA’s proposal would make marijuana a Schedule III drug, characterized by moderate or low potential for physical and psychological dependence, along with ketamine and anabolic steroids.

The proposal would not legalize marijuana nationally, although it has already been legalized for medical use in 38 states and recreational use in 24.

Cannabis stocks soared after the news, with the AdvisorShares Pure US Cannabis ETF ( MSOS ) jumping more than 21% in intraday trading. Shares of Canadian producer Canopy Growth Corp. ( CGC ) rose 35%, while New York-based Curaleaf Holdings ( CURLF ) rose more than 18%.

3M shares rise even as the era of dividend hikes ends

1 h 31 min ago

Shares of 3M ( MMM ) rose as the streamlined multinational conglomerate reported better-than-expected results, even as the spin-off of its healthcare unit brought the end of its days as a dividend aristocrat.

The maker of Post-it notes and Scotch tape posted first-quarter earnings per share (EPS) of $2.39, with revenue down 0.3% to $8 billion. The results, which beat forecasts, showed that the company’s efforts to streamline the spin-off of its Solventum healthcare unit (SOLV) paid off.

The results also mark the end of 3M’s six-decade history of increasing its dividend every year. The company announced a quarterly dividend of $1.51 per share.

The company said Tuesday that its annual payout ratio is expected to be approximately 40% of adjusted free cash flow with the potential to increase over time.

Shares of 3M rose 2.8% late Tuesday, bringing the stock’s one-year gain to nearly 7%.

– Bill McCall

Inflation takes a bite out of McDonald’s earnings

2 h 36 min ago

McDonalds ( MCD ) reported first-quarter profit on Tuesday that missed estimates as its results were hit by the effects of consumer inflation and continued boycotts in the Middle East.

The company reported first-quarter diluted earnings per share of $2.66, up 9% from the year-ago quarter, but there are no estimates compiled by Visible Alpha. Revenue rose 4.6% to $6.17 billion, slightly above forecasts.

Comparable store sales rose 1.9%, a sharp slowdown from the 12.6% growth it posted a year ago. Comparable store sales fell 0.2% in the International Development Licensed Markets unit as the segment continued to be affected by the war in the Middle East.

CEO Chris Kempczinski said McDonalds was feeling the effects of inflation, noting that consumers are more discriminating with every dollar they spend.

Shares in McDonalds fell at the open on Tuesday before recovering to trade down 0.1% in early afternoon trading. Shares hit an all-time high in January, but have stumbled since then, losing nearly 8% year to date.

– Bill McCall

Coca-Cola’s earnings appear on higher prices and strong demand in Latin America

3 h 36 min ago

Coca-Cola ( KO ) posted better-than-expected first-quarter results and raised its outlook as it benefited from higher prices, although volume growth was soft.

Coca-Cola reported first-quarter diluted earnings per share (EPS) of 74 cents, up from 72 cents in the year-ago period and above analysts’ estimates. Revenue advanced 2.9% year over year to $11.3 billion, also beating forecasts. The company noted that revenue rose on the back of a 13% increase in price/mix, while concentrate sales fell 2%. Unit box volume was 1% higher.

The results were driven by demand in the Latin American market, which recorded a 22% increase in price/mix and a 4% increase in unit case volume. Coca-Cola’s EMEA price/mix was also up 22%, and volume was up 2%.

Shares of Coca-Cola were little changed after the release, falling 0.3% to $61.84 on Tuesday morning. They have gained nearly 5% since the beginning of the year.

– Bill McCall

GE HealthCare Shares Fall After Earnings Miss

4 h 26 min ago

Shares of GE HealthCare ( GEHC ) fell in early trading Tuesday after the medical device maker reported weaker-than-expected first-quarter results as sales from its imaging, ultrasound and patient care solutions fell.

GE HealthCare reported first-quarter revenue of $4.65 billion, down from the $4.71 billion it reported a year earlier and below the $4.81 billion analysts were expecting, according to estimates compiled by Visible Alpha.

GE HealthCare’s net income rose slightly to $374 million, or 81 cents per share, up from $372 million, or 41 cents per share, in the year-ago period, but that was also below analyst estimates of $391.52 million or 88 cents per share.

Despite lackluster first-quarter results, the company affirmed its full-year guidance, projecting revenue growth of roughly 4% and adjusted earnings per share (EPS) between 4.20 and $4.35, compared to $3.93 the company reported in 2023.

Shares of GE HealthCare were down 10.7% at $79.42 on Tuesday morning, bringing the stock’s year-to-date return to around 2%.

-Aaron McDade

Eli Lilly’s stock rises as weight-loss drugs continue to drive growth

5 h 11 min ago

Shares of Eli Lilly ( LLY ) jumped in early trading Tuesday after the drugmaker reported first-quarter earnings that beat analysts’ expectations and raised its guidance on continued strong demand for the drugs for company weight loss.

Shares rose 7.6% to $793.54 earlier in the session, putting it on track to possibly surpass its all-time closing high of $792.28 set in early March. The stock has nearly doubled over the past year.

Eli Lilly said first-quarter revenue rose 26% from the year-ago period to $8.77 billion, which was almost exactly in line with analyst estimates compiled by Visible Alpha. The increase was primarily driven by the company’s weight loss drugs, Mounjaro and Zepbound, the company said.

The company was more profitable than analysts expected, posting net income of $2.24 billion for earnings per share (EPS) of $2.48, compared to the $2.11 billion and $2.34 per share they were expecting the analysts

Full-year guidance also took a hit, with Eli Lilly changing its revenue projections by up to $2 billion to a range of $42.4 billion to $43.6 billion and projections for EPS in a range of $13.05 to $13.55, compared to the $11.80 and $12.30 the company projected in its range. fourth quarter report earlier this year.

-Aaron McDade

Stocks that make the biggest moves before the market

5 h 58 min ago

Earnings:

• Eli Lilly (LLY): Shares of the pharmaceutical giant rose more than 5% after reporting better-than-expected earnings on strong demand for its GLP-1 agonists Mounjaro and Zepbound.
• PayPal (PYPL): Fintech shares rose more than 5% after raising its full-year profit guidance as consumer spending remained strong and cost-cutting measures costs widened margins.
• 3M ( MMM ) — Shares of the industrial conglomerate rose 5% after beating Wall Street estimates on both the top and bottom lines for the first quarter. CEO Mike Roman also said the company was restoring its dividend following its spin-off earlier this year of its healthcare business, Solventum ( SOLV ).

Losses:

• GE Healthcare ( GEHC ) — Shares of the medical device maker fell more than 8% after its first-quarter sales missed estimates amid weak sales in China.
• Stellantis ( STLA ) — Shares of the Jeep maker fell 8% after it reported a 12% drop in sales in the first quarter, which it attributed to a lull ahead of the launch of several new models this year.
• McDonalds ( MCD ) — Shares of the fast food giant fell more than 3% after missing first-quarter earnings estimates as consumers pulled back on discretionary spending.

Futures fall as consumer giants’ earnings rise

6 h 52 min ago

Futures contracts linked to the Dow Jones Industrial Average were down less than 0.1% in premarket trading.

S&P 500 futures were also down less than 0.1%.

Nasdaq 100 futures were down a little more than 0.1% about an hour before the opening bell.