Check out the companies making headlines in midday trading. Spotify — The music streaming platform advanced 2% after Wells Fargo named it a top stock pick . Analyst Steven Cahall cited Spotify’s rising profit margins, strong product mix and evolving record label relationships as catalysts while reiterating an outperform rating on the stock. Robinhood — The fintech stock rose less than 3% after it said Monday that users will have the chance to trade a Kamala Harris or Donald Trump contract ahead of next week’s presidential election. Users must meet certain eligibility criteria, including being a citizen of the United States. Occidental Petroleum , Exxon , BP — Oil companies slipped more than 1% alongside declining crude prices after Israel spared Iran’s crude facilities in its weekend attack on Iranian military installations. Citi predicts that the Israeli strike will not ultimately disrupt oil supplies. McDonald’s — Shares rose 1.5% after the fast-food chain said its Quarter Pounder burger would return to menus this week at restaurants affected by a deadly E. coli outbreak, which led the stock to suffer slump roughly 7.5% last week. About 900 locations will serve the burger without slivered onions, which are the likely source of the outbreak, as health officials continue investigating the contamination. McDonalds is also set to release quarterly earnings Tuesday before the market open. Taiwan Semiconductor Manufacturing — The chip manufacturer slipped 3% after halting shipments to a China-based chip designer after a chip it made was found on a Huawei AI processor, sources familiar with the matter told Reuters. The U.S. had restricted Huawei since 2020 from buying the technology over national security concerns. ON Semiconductor — The semiconductor product maker rose 5% after third-quarter earnings and revenue topped analyst estimates. ON’s adjusted earnings of 99 cents per share exceeded the 97 cents estimate by analysts polled by FactSet, while revenue of $1.76 billion was above the Street’s $1.75 billion expectation. Nio — the Chinese electric vehicle maker jumped about 11% following Macquarie’s upgrade to outperform from neutral . Analyst Eugene Hsiao sees accelerating volumes in the current quarter due to strong Onvo L60 orders. Delta Air Lines — The Atlanta-based carrier moved 4% higher after filing suit against CrowdStrike Friday, accusing the security software vendor of negligence and breach of contract in a July outage that resulted in 7,000 flight cancellations. Delta has also benefited from a 15% drop in jet fuel prices over the past three months. Honeywell — Shares eased 1.1% on the heels of Wolfe Research’s downgrade to peer perform from outperform. Wolfe, which had held an outperform rating on the stock since 2005, said it’s less optimistic that Honeywell’s headwinds will resolve in the next year. Philips — Shares tumbled 17% after the Dutch healthcare devices company lowered its revenue outlook for 2024. CEO Roy Jakobs blamed deteriorating demand from Chinese hospitals and consumers. Nutanix — The cloud infrastructure stock rose 4% following an upgrade to overweight from equal weight at Morgan Stanley. Analyst Meta Marshall said Nutanix’s set up looks attractive, and that the company’s architectural changes should lead to market share gain in the next few years. Moderna — Shares jumped after Moderna and Merck said they initiated a Phase 3 trial investigating a treatment for non-small cell lung cancer. Moderna shares advanced 3.9%, while Merck was slightly higher. Aaon — The heating and air conditioning equipment manufacturer surged 8% following an upgrade to outperform at Baird. Analyst Timothy Wojs said Aaon could benefit from artificial intelligence, since higher computing power generates more heat and requires more liquid cooling equipment. — CNBC’s Sean Conlon, Michelle Fox, Alex Harring, Sarah Min and Pia Singh contributed reporting.
Check out the companies making headlines in midday trading: American Airlines — Shares slipped less than 1%, recovering from earlier losses, after the airline temporarily grounded all of its flights due to a technical issue. Broadcom — The semi stock added 2%, extending its December rally. Shares have surged more than 46% this month, propelling its 2024 gain above 112%. Big banks — Shares of some big bank stocks rose more than 1% amid news that a group of banks and business groups are suing the Federal Reserve over the annual stress tests, saying it “produces vacillating and unexplained requirements and restrictions on bank capital.” Citigroup , JPMorgan and Goldman Sachs shares gained more than 1% each. Arcadium Lithium — Shares rose more than 4% after the company announced its shareholders have approved the $6.7 billion sale to Rio Tinto . The deal is expected to close in mid-2025. International Seaways — The energy transportation provider surged 8% after an announcement that the company would be added to the S & P SmallCap 600 index, effective Dec. 30. The company will replace Consolidated Communications , which is soon to be acquired. Crypto stocks — Shares of stocks tied to the price of bitcoin rose as the cryptocurrency gave back recent losses amid a climb in tech names broadly. Crypto services provider Coinbase gained almost 3% and bitcoin proxy MicroStrategy gained more than 5%. Miners Riot Platforms and IREN gained 6% and 4%, respectively. U.S. Steel — The steel producer’s stock hovered near the flatline amid news that President Joe Biden will decide on the fate of its proposed acquisition by Japan’s Nippon Steel after a government panel failed to reach a decision . Apple — Apple shares gained 0.9% to notch a new all-time high. The stock has rallied nearly 34% year to date. — CNBC’s Sean Conlon, Lisa Han, Tanaya Macheel and Alex Harring contributed reporting.
A general view of the Federal Reserve Building in Washington, United States.
Samuel Corum | Anadolu Agency | Getty Images
The biggest banks are planning to sue the Federal Reserve over the annual bank stress tests, according to a person familiar with the matter. A lawsuit is expected this week and could come as soon as Tuesday morning, the person said.
The Fed’s stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans and dictates the size of share repurchases and dividends.
After the market close on Monday, the Federal Reserve announced in a statement that it is looking to make changes to the bank stress tests and will be seeking public comment on what it calls “significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements.”
The Fed said it made the determination to change the tests because of “the evolving legal landscape,” pointing to changes in administrative laws in recent years. It didn’t outline any specific changes to the framework of the annual stress tests.
While the big banks will likely view the changes as a win, it may be too little too late.
Also, the changes may not go far enough to satisfy the banks’ concerns about onerous capital requirements. “These proposed changes are not designed to materially affect overall capital requirements, according to the Fed.
The CEO of BPI (Bank Policy Institute), Greg Baer, which represents big banks like JPMorgan, Citigroup and Goldman Sachs, welcomed the Fed announcement, saying in a statement “The Board’s announcement today is a first step towards transparency and accountability.”
However, Baer also hinted at further action: “We are reviewing it closely and considering additional options to ensure timely reforms that are both good law and good policy.”
Groups like the BPI and the American Bankers Association have raised concerns about the stress test process in the past, claiming that it is opaque, and has resulted in higher capital rules that hurt bank lending and economic growth.
In July, the groups accused the Fed of being in violation of the Administrative Procedure Act, because it didn’t seek public comment on its stress scenarios and kept supervisory models secret.