The stock market started the week on a positive note, fueled by a surge in technology stocks, although enthusiasm waned as the day progressed. Despite this, two out of the three major benchmarks added to their year-to-date gains.
Walt Disney’s (DIS) recent strategic venture, including a merger, had a significant impact on communication services stocks. Though DIS stock saw a slight dip of 0.1% following the announcement of a merger between its Hulu + Live TV business and fuboTV (FUBO), FUBO shares experienced a more than tripled increase.
The merger will produce a combined streaming service, to be traded under the FUBO ticker symbol on the New York Stock Exchange. Disney will retain a 70% stake in the new business, with the remaining ownership held by FUBO shareholders. This deal also resolves a legal dispute initiated by Fubo, aiming to prevent the formation of Venu Sports, a sports streaming venture involving Disney, Warner Bros. Discovery (WBD, +2.5%), and Fox (FOX, +0.8%). Consequently, shares of WBD and FOX also saw an increase.
CFRA Research analyst Kenneth Leon recently upgraded Disney to Hold from Buy. Leon expressed confidence in the company’s direct-to-consumer (DTC) streaming unit and its Experiences segment (theme parks and cruise lines), anticipating their strengthening this year. “Experience offers durable, recurring revenue streams to generate operating and free cash flow, even though leisure spending is sensitive to the economy,” Leon wrote in a December 26 note. Furthermore, Leon stated, “In our view, DTC has turned the corner to profitable growth with healthy subscriber growth. Sports are a core franchise for live entertainment that needs advertising sponsors to offset sports rights.”
While Disney was one of several Dow Jones stocks that closed lower on Monday, shares of Nvidia (NVDA) jumped 3.4%, resulting in a $122 billion increase in market value. This increase was part of a broader rally in semiconductor stocks. Micron Technology (MU, +10.5%), Taiwan Semiconductor (TSM, +5.5%), and Advanced Micro Devices (AMD, +3.3%) also showed notable gains on the day.
The rally preceded CES 2025, set to begin tomorrow and run through the week. Nvidia CEO Jensen Huang is scheduled to speak later today, offering his insights into the future of artificial intelligence (AI). According to BofA Securities analyst Vivek Arya, “AI will likely be a key theme at the conference, with companies highlighting plans to integrate augmented capabilities across a broadening set of consumer and edge products.” Arya is also looking for updates on “the recovery timeline for automotive and industrial semiconductor end markets,” as well as new growth opportunities in electric and self-driving vehicles.
At the market’s close, the Nasdaq Composite was up 1.2% at 19,864, the S&P 500 rose 0.6% to 5,975, and the Dow Jones Industrial Average slightly decreased by 0.06%, closing at 42,706.
It’s important to note that the stock market will be closed on Thursday, January 9, in observance of a national day of mourning and state funeral for former President Jimmy Carter. The bond market will close at 2 pm Eastern Standard Time.
