Oil Stocks Climb; Warner Bros. Discovery and Paramount Retreat

Shares of oil producers gained ground, boosted by an uptick in commodity prices, while a rally ran out of steam for two entertainment giants at the center of reports about a potential takeover bid.

The S&P 500 slipped 0.1%, retreating from record levels ahead of the Federal Reserve’s decision on interest rates expected tomorrow. The Nasdaq lost 0.1%, ending its six-session streak of record closes, while the Dow was down 0.3%. See here for full coverage from Investopedia on today’s market action.

Crude oil futures moved higher as strikes on key Russian production facilities by Ukrainian drones raised concerns about global supply and traders positioned themselves ahead of this week’s anticipated interest-rate cuts. Shares of exploration and production APA Corp. (APA) surged 7% to log the day’s top performance in the S&P 500. Shares of Occidental Petroleum (OXY) were up 5%, and other oil producers also rose.

Steel Dynamics (STLD) issued stronger-than-expected outlook for its third quarter, and its shares jumped 6.1%. The steelmaker highlighted strong demand in the residential construction, automotive, energy, and industrial sectors, along with an anticipated boost to profitability from a more favorable metal spread, with scrap raw material costs falling faster than average realized steel prices.

Shares of Hershey (HSY) added 4.3% after Goldman Sachs upgraded the stock to “buy” from “sell.” Analysts attributed the double upgrade to their belief that strong pricing and improving market share trends could help the chocolate maker offset pressures related to elevated cocoa costs and tariffs.

Moderna (MRNA) shares gained 4% after the biotechnology firm released positive preliminary data on its latest version of the COVID-19 vaccine. The company said the updated shot generated a strong immune response for high-risk individuals and people over age 65, and Moderna said the safety profile was in line with prior studies.

Warner Bros. Discovery (WBD) shares tumbled 6.2%, losing the most of any S&P 500 stock. With the downturn on Tuesday, the stock gave back a portion of the massive gains posted last week after reports that industry rival Paramount Skydance (PSKY) was considering a buyout bid. Sen. Elizabeth Warren (D-MA) criticized the potential takeover, and TD Cowen analysts downgraded Warner Bros. Discovery stock to “hold” from “buy,” noting the recent run-up may not be sustainable if a deal between the two media giants fails to materialize. Paramount Skydance shares dropped 5.7%.

Shares of Emerson Electric (EMR) declined 4.9% after the industrial automation firm said it now expects full-year sales to come in at the low end of its previous forecast. The company cited headwinds in China and Europe as factors behind its more modest expectations.