Equities Higher Intraday as Broadcom Sell-Off Weighs on Tech Sector

US benchmark equity indexes were higher intraday, even as a sell-off in Broadcom (AVGO) shares weighed on the technology sector.

The Dow Jones Industrial Average was up 1.6% at 51,517.2 after midday Thursday, while the S&P 500 rose 0.4% to 7,586.8. The Nasdaq Composite edged up 0.1% to 26,872. Barring technology and materials, all sectors were in the green, led by healthcare.

In company news, Broadcom shares were down nearly 12% intraday, the second-worst performer on the S&P 500 as the company's artificial intelligence revenue outlook fell short of the market's bullish expectations.

The company's decision not to upgrade its 2027 guidance for AI sales apparently disappointed investors, especially as the chip designer reported strong semiconductor demand for its fiscal second quarter, UBS Securities analysts said.

CrowdStrike (CRWD) reported strong fiscal first-quarter results amid accelerating demand for artificial intelligence, but questions around the company's performance sustainability remain, BofA Securities said. The stock was down 4.6%.

Ciena (CIEN) plunged 15% despite providing an upbeat fiscal third-quarter revenue outlook on Thursday. The networking systems and software company's results topped market estimates in the prior three-month period.

UnitedHealth (UNH) was up 5% intraday, the top gainer on the Dow, after BofA Securities upgraded its rating on the stock to buy from neutral.

West Texas Intermediate crude oil was down 3.9% at $92.27 a barrel intraday Thursday, while Brent fell 3.2% to $94.67.

Israel and Lebanon agreed to implement a ceasefire, subject to Iran-backed Hezbollah ending all fire and evacuating its operatives from the South Litani Sector, according to a joint statement from the US, Israel and Lebanon released Wednesday.

But just hours after the deal, Israeli forces and Hezbollah fighters launched strikes, CNN reported.

"News that Israel and Lebanon agreed on a ceasefire could potentially open the door for talks to advance," ING Bank said in a report on Thursday. "Every day that passes without a resumption of oil flows (through the Strait of Hormuz) leaves the market increasingly vulnerable. This increases the pressure to strike a deal."

In economic news, job cut announcements in May hit the highest for the month since 2020, Challenger, Gray & Christmas said Thursday, while US weekly applications for unemployment insurance rose unexpectedly.

"On top of the headline AI story, we're seeing a sharp rise in cuts tied to acquisitions and mergers and a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy," Andy Challenger, the firm's chief revenue officer, said in a statement. "The labor market is being reshaped by technology in real time."

The Challenger report arrives a day before the May nonfarm payrolls release. Economists surveyed by Bloomberg expect 85,000 new jobs, down from 115,000 in April, with the unemployment rate seen holding at 4.3%.

US Treasury yields were lower intraday, with the 10-year rate down 2.8 basis points at 4.47%, and the two-year rate falling 3.3 basis points to 4.05%.

Gold was up 0.9% at $4,508.50 per troy ounce, while silver rose 0.8% to $74.28 per ounce.

Housing Recovery Stalls in May as New Listings, Sales Fall Annually, Zillow Says

New US home listings and sales dropped on an annual basis in May amid elevated mortgage rates, halting a market recovery, Zillow Group (Z, ZG) said Thursday.New for-sale listings fell 4.1% year over year to 422,956 units last month, while sales declined 2.9% to 341,929 units, according to the real estate marketplace.Although new listings have historically peaked in May or June, sellers pulled back last month. While sales rose on a monthly basis in May, they fell off the historic trend line. Mortgage rates rose past 6.5%, Zillow said."May housing results were disappointing for those hanging on to hope of a stronger year for sales," Zillow Chief Economist Mischa Fisher said.The mortgage payment on a typical home dropped 3.1% annually to $1,861 in May, while home values rose 0.8% sequentially to $368,720, the report showed.Active inventory increased 1% year over year last month, extending a streak of annual gains to 30 consecutive months, though the growth rate decelerated, Zillow said."Inventory is rising, but weekly data suggests it could flatline in the next four weeks." Fisher said. "A June peak for options home shoppers have to choose from would be early on the calendar, possibly foreshadowing slower sales in the second half of the year."On Wednesday, a report by the Mortgage Bankers Association showed that mortgage applications in the US fell in the week ended May 29."The prospect of easing energy prices given the evolving situation in the Middle East brought mortgage rates slightly lower last week," Joel Kan, the MBA's deputy chief economist, said at the time. "The retreat in rates, however, did not lead to an increase in mortgage applications."Price: $35.63, Change: $+0.12, Percent Change: +0.32%

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J.B. Hunt Transport Poised for Continued Outperformance, Deutsche Bank Says

J.B. Hunt Transport Services (JBHT) is expected to continue to outperform peers despite a year-to-date rally in its stock amid favorable industry trends, Deutsche Bank said Thursday.The transportation and logistics company's shares have jumped nearly 46% so far this year. The stock is up "an enviable" 100% since the company's third-quarter earnings call in October and better than all its closest transportation peers, Deutsche Bank analyst Richa Harnain said in a note to clients."Despite this impressive outperformance, we continue to see strong upside potential ahead," Harnain said.The company's shares were up 1% in Thursday afternoon trade.The price gap between intermodal and all-highway shipping solutions is an "unprecedented" 35%, which could be a "game-changer" for J.B. Hunt, according to the note."By some measures, such a gap between the two offerings has never been wider," Harnain said. "We believe trends explaining the gap (rising fuel plus capacity tightness) are sustainable, and could finally unlock intermodal's long-awaited secular growth, potentially doubling its market size over the coming years."Energy prices have surged due to supply disruptions caused by the Middle East conflict.A "record-breaking" 60% of shippers have recently moved to rail from truck, Deutsche Bank said, citing Journal of Commerce data from journalist Ari Ashe's intermodal scorecard survey."We think (J.B. Hunt) is best positioned to benefit from such a trend," Harnain said. "Beyond the obvious reasons, our recent deep dive has brought to light several 'under-the-radar' elements of the (J.B. Hunt) story that make its future even more compelling."In April, the company posted better-than-expected first-quarter results as it recorded revenue growth in most of its business segments amid robust demand for its service offerings.Price: $282.69, Change: $+2.64, Percent Change: +0.94%

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Broadcom's Unchanged AI Outlook Likely Disappointed Investors, UBS Says

Broadcom's (AVGO) decision not to upgrade its 2027 artificial intelligence guidance apparently disappointed investors, especially as the chip designer reported strong semiconductor demand, UBS Securities said in a client note sent Thursday.Broadcom continues to expect AI semiconductor revenue in excess of $100 billion for fiscal 2027, Chief Executive Hock Tan's said during an earnings conference call late Wednesday. For fiscal 2026, Broadcom expects the metric to increase about 180% over the previous year to $56 billion.The company reported stronger-than-expected fiscal second-quarter results, with AI revenue more than doubling amid increased demand for custom accelerators and networking solutions. Broadcom saw bookings for its AI semiconductors exceeding $30 billion in the quarter, Tan told analysts, according to a FactSet transcript.But shares of Broadcom plunged nearly 15% intraday Thursday, trimming its year-to-date gain to about 19%."Orders were very strong, but (Broadcom) didn't raise AI revenue for either (fiscal) 2026 or 2027, (disappointing especially when compared to peers), with the issue being mostly one of supply," UBS analysts Timothy Arcuri and Natalia Winkler wrote.Broadcom's 2027 AI semiconductor revenue guidance is short of UBS' about $135 billion estimate, which the brokerage left unchanged."Ultimately, there is not a ton here to sway our view materially in either direction as new agreements continue to expand custom (application-specific integrated circuit) engagements," Arcuri and Winkler said.The brokerage lowered its calendar year 2027 earnings per share estimate to $23.19 from $23.84, though total revenue is now projected at about $213 billion, compared with its prior forecast of $205 billion.UBS reiterated its buy recommendation on the stock, while lowering the price target to $485 from $490.Price: $408.43, Change: $-70.80, Percent Change: -14.77%

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Housing Recovery Stalls in May as New Listings, Sales Fall Annually, Zillow Says

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Broadcom's Unchanged AI Outlook Likely Disappointed Investors, UBS Says