Tech stocks on display at the Nasdaq.
- All three major indexes snapped a five-week winning streak.
- Walmart agreed to buy TV maker Vizio for $2.3 billion.
- Capital One Financial plans to acquire Discover Financial Services.
Here are the most important news items that investors need to start their trading day:
1. Oh, snap
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All three major indexes snapped five-week winning streaks last week with the tech-heavy Nasdaq Composite losing the most at more than 1.3%. The S&P 500, meanwhile, dropped about 0.4%, while the Dow slipped just 0.1%. The drops followed another sign of persistent inflation as the U.S. Department of Labor reported that wholesale prices rose more than analysts had expected. Looking ahead to the holiday-shortened week, investors will be watching earnings reports from Palo Alto Networks, Nvidia, Moderna, Warner Bros. Discovery, Berkshire Hathaway and more. Follow live market updates here.
2. Retail vision
Walmart announced Tuesday that it agreed to buy TV maker Vizio for $2.3 billion, or $11.50 per share, in cash. Walmart, which has long sold Vizio TVs, is looking to boost its high-margin advertising business. The news came as the big-box retailer reported fourth-quarter earnings that beat Wall Street's expectations. Walmart said its quarterly revenue rose 6% during the holiday season and its e-commerce sales increased 23% year over year, topping $100 billion in total. In other retail news, Home Depot also beat estimates for earnings and revenue, despite quarterly sales dropping nearly 3% year over year.
3. Increasing capital
Two of the largest credit card issuers in the United States are planning to merge. Capital One Financial said Monday that it would acquire Discover Financial Services in a $35.3 billion all-stock deal. It's one of the largest potential mergers announced so far this year. The deal, which is expected to close in late 2024 or early 2025, would expand Capital One's credit card offerings and its deposit base. According to the Wall Street Journal, Capital One already uses Visa and Mastercard networks and plans to keep the Discover brand.
4. Go play your video game
What new console will hit the video game world next? Analysts think Sony is likely to release a refreshed version of its PlayStation 5 this year ahead of the highly anticipated Grand Theft Auto VI game's launch in 2025. Sales of the 3-year-old PS5 have been lagging and, traditionally, new hardware can help lift interest. Meanwhile, Nintendo's stock fell nearly 6% Monday after a report suggested that the launch of the Switch 2 would be delayed from late this year to early 2025. The current version of Nintendo's flagship gaming console is nearly 7 years old.
Money Report
5. Still magnificent
The Magnificent 7 stocks, aka the U.S. tech behemoths — Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla — are bigger than ever. In fact, if they were their own index, their combined market capitalizations would create the second-largest stock exchange in the world, according to Deutsche Bank. Microsoft and Apple on their own have similar market caps to all the combined listed companies in France, Saudi Arabia and the U.K., the bank's research said. That concentration has led to some analyst concerns, and Deutsche Bank's Jim Reid noted that the U.S. stock market is "rivaling 2000 and 1929 in terms of being its most concentrated in history."
— CNBC's Alex Harring, Melissa Repko, Hakyung Kim, Christine Wang, Arjun Kharpal and Elliot Smith contributed to this report.
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