Before the Bell: Intel Catches a Bid, Disney Punks DeSantis

Premarket action on Thursday had the three major U.S. indexes trading higher. The Dow Jones industrials were up 0.66%, the S&P 500 up 0.64% and the Nasdaq 0.55% higher.

All 11 market sectors closed higher on Wednesday. Real estate (2.31%) and technology (2.09%) posted the day’s best gains. Health care (0.24%) and consumer staples (0.54%) posted the smallest gains. The Dow closed up 1.00%, the S&P 500 up 1.42% and the Nasdaq Composite up 1.79%.

Two-year Treasuries rose six basis points to end Wednesday at 4.08%, and 10-year notes rose two basis points to close at 3.57%. In Thursday’s premarket, two-year notes were trading at around 4.11% and 10-year notes at about 3.55%.

Wednesday’s trading volume was below the five-day average. New York Stock Exchange winners outpaced losers by 2,389 to 635, while Nasdaq advancers led decliners by better than 2 to 1.

The U.S. Energy Information Administration on Wednesday reported a drop of 7.49 million barrels in the nation’s commercial crude oil inventories. Still, inventories of 473.7 million barrels remain 6% above the five-year average for this time of year. Crude prices initially slipped following the announcement and closed down by less than 0.03%.

The S&P 500 index’s leading gainer on Wednesday was Intel Corp. (NASDAQ: INTC), with a share price increase of 7.61%. In addition to the positive earnings report delivered late Tuesday by Micron Technology Inc. (NASDAQ: MU) that lifted all semiconductor boats, Intel told an investor conference that it will deliver its first efficient-core Xeon server chip in the first half of next year, a full year earlier than analysts and investors were expecting. Two other new Xeon processors are also in the pipeline for later this year (the 5th-generation Xeon), and another Xeon chip (code-named Granite Rapids) in 2024. What Intel did not say is that the company is still three to four years behind Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM) in adopting enhanced ultraviolet (EUV) chipmaking technology.

Bath & Body Works Inc. (NASDAQ: BBWI) dropped 2.08% on Wednesday, the biggest decline among S&P 500 stocks. Banks caught a breather, while consumer-facing names like Target, Ulta Beauty and Clorox put up small losses.

Like a fairy tale that ends with everyone living happily ever after the villain is vanquished, the Walt Disney Co. (NYSE: DIS) had a surprise for Florida Governor Ron DeSantis’s hand-picked Disney World oversight board. Late last month, DeSantis signed a law stripping Disney World of its special tax status and giving his hand-picked board control over the Reedy Creek Improvement District.

Now comes the surprise. Before DeSantis signed the bill, Disney quietly handcuffed the new board by convincing the soon-to-be-outgoing board to add some restrictive covenants to the pre-DeSantis Reedy Creek board.

The restrictive covenants prevent the new Reedy Creek board from using the Disney name with the company’s approval or using Disney characters like Mickey Mouse. The covenants are valid “21 years after the death of the last survivor of the descendants of King Charles III, king of England living as of the date of this declaration.”

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