Markets
Luke Kawa
7/18/24

US stocks slump for second straight day, Domino’s delivers worst day in 16 years


Broad-based declines across the S&P 500 pushed the benchmark index down 0.8% on the session.

Small caps also gave back more of their recent gains, with the Russell 2000 Index falling 1.8%, while tech-heavy Nasdaq 100 off 0.5%.

Shares of Domino’s had their worst day since 2008, down 13.6% after the company posted slightly underwhelming same-store sales growth and shelved its targets for international store growth.

Energy was the best-performing S&P sector ETF, up a meager 0.2%. Health care stocks lagged, dragged down by Eli Lilly’s 6.3% decline on news that a drug trial for an obesity pill from one of its competitors, Roche, yielded encouraging results. 

DR Horton was the best-performing S&P 500 constituent, up 10.1% on strong profit margins and a higher than expected closings target for the entry-level homebuilder. 

Chips rebounded following Wednesday’s colossal losses, with the VanEck Semiconductor ETF up 0.5% and Nvidia and Broadcom each gaining more than 2.5%. TSMC opened more than 4% higher after posting better than expected quarterly results and upgrading its sales guidance in light of AI-linked demand. However, those gains largely faded and the stock ended up just 0.4%.

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Plug Power soars on bullish options activity as it delivers first electrolyzer for green hydrogen project

Hydrogen fuel cell company Plug Power is enjoying massive gains and a lot of love in the options market Wednesday after the company announced that it delivered the first electrolyzer to a refinery in Portugal.

“This project, Plug’s largest worldwide, will produce up to 15,000 tons of renewable hydrogen per year, replacing 20% of the grey hydrogen currently used at the Sines Refinery,” per the company’s press release. “This switch will reduce the Refinery’s greenhouse gas emissions by approximately 110,000 tons per year (Scope 1 and 2, CO2e).”

As of 11:03 a.m. ET, over 146,000 call options in Plug have changed hands, already running hotter than the 20-day average of 132,328 for the full session. Activity is more than tilted to the bull side — it’s completely lopsided. Over 11 call options have traded for every one put.

Plug call options that expire in mid-January with a strike price of $2 and contracts with strike prices of $3 and $2.5 that expire this Friday are seeing especially elevated trading activity.

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Analysts weigh in on DraftKings’ tumble: One sees a “back up the truck” opportunity to buy the dip

Wall Street analysts are reacting to the sharp slide of online gambling stocks DraftKings and Flutter Entertainment Tuesday, after prediction markets company Kalshi introduced a product mimicking the parlay bets on the betting apps, intensifying concerns about the competitive pressures prediction markets pose.

Citi analysts snipped their Q3 estimates and price target for DraftKings — while maintaining a buy rating — after Tuesday’s tumble. They wrote:

We are lowering our 3Q25 estimates and now forecast 2025 to come in toward the lower end of the firm’s guide. Along with results, we believe investors will be focusing on initial trends since the start of the NFL season, the evolving prediction market landscape, the firm’s recent NBCU partnership, and recent product enhancements.

BMO Capital, however, kept its overweight rating on the stock, which it calls a “top pick,” seeing Tuesday’s nearly 12% drop as a chance to buy the dip: 

While bears will point to product enhancements (parlays) and trade volume momentum by prediction markets, we believe legal [online sports betting] vendors continue to control the lions share of betting volume in the legal betting markets. We view todays sell-off, in particular, as a back up the truck opportunity.

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