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Small Caps Charge Higher, Leading the Day’s Rebound
28 minutes ago
The small-cap Russell 2000 Index led U.S. equity indexes higher Friday afternoon, climbing 0.8%.
Every single one of the index’s 20 largest constituents—accounting for more than 5.5% of the 2000-stock index—was up in the late afternoon. Cloud-based supply chain manager SPS Commerce Inc. (SPSC) rose about 3%, while mechanical contractor Comfort Systems USA (FIX) gained 2%, and cosmetic retailer e.l.f. Beauty Inc. (ELF) was up 1%.
Small caps have struggled to keep up with the rest of the market this year. Before today’s gains, the Russell 2000 was up just 5% year-to-date, compared with the S&P 500’s 14% rise and the Nasdaq’s 27% gain.
Midday Market Movers
1 hr 19 min ago
Keysight Technologies Inc. (KEYS): Shares of the electronics test manufacturer sank 15% after providing a weaker-than-expected outlook for the current quarter.
Deere & Co. (DE): Shares of the agriculture and construction equipment manufacturer fell 5% despite beating analysts’ earnings and revenue estimates last quarter, and raising its full-year profit outlook.
JD.com Inc. (JD): The Chinese e-retailer’s American depositary receipts slumped 5% as Chinese stocks continued to slide on concerns about the real estate sector’s troubles throwing the entire economy into crisis. Other Chinese stocks NIO Inc. (NIO), XPeng Inc. (XPEV), and PDD Holdings (PDD) were down 7%, 6%, and 4%, respectively.
Datadog Inc. (DDOG): The analytics platform developer jumped 3% after TD Cowen initiated coverage of the stock with an Outperform rating and a price target of $120. Datadog was trading at $93 Friday afternoon.
Bargain-Hunting Drives Quarterly Gain For Discount Retailer Ross Stores, Shares Jump
2 hr 9 min ago
Ross Stores Inc. (ROST) reported better-than-expected sales and earnings for the second quarter and raised guidance for the remainder of the year, as price-conscious consumers increasingly look for deals at discount retailers.
Ross’s earnings per share (EPS) climbed 19% year-over-year to $1.32 as sales grew almost 7% to $4.9 billion. The company boosted its expectations for the second half of 2023, with EPS expected to be in the range of $1.16-$1.21 and $1.58-$1.64 for the third and fourth quarters, respectively.
The cost of essentials is increasing at a slower pace in 2023 compared with last year, but rising prices remain a major concern for consumers.
This sentiment has benefited off-price retailers like Ross and TJX Companies Inc. (TJX), the parent of T.J. Maxx, Marshalls, and HomeGoods. Inflation-cautious consumers have begun to make fewer discretionary purchases at more expensive stores but continue to seek out deals on high-quality items at off-price retailers.
Ross shares are up about 6% in intraday trading.
-Nathan Reiff
Generac Shares Gain as Hurricane Hilary Heads Toward California
3 hr 15 min ago
Shares of Generac Holdings Inc (GNRC) rose more than 4% Friday as Hurricane Hilary, a category 4 storm, is projected to hit Southern California as a tropical storm as early as Sunday.
Experts forecast up to 6 inches of rainfall and “damaging wind gusts” in parts of California that haven’t seen a tropical storm of this magnitude since 1939.
Generac shares surged in June and July amid a record heat wave that threatened widespread blackouts. Generac is one of several companies that benefit from the severe weather events that are becoming all the more common as climates change across the globe.
Applied Materials Beats Sales Estimates and Raises Its Guidance on AI, China Demand
3 hr 44 min ago
Chip tool maker Applied Materials (AMAT) saw its shares rise 1.7% in early trading Friday after reporting sales beat forecasts and raising its guidance on demand for artificial intelligence (AI) chips.
Applied posted revenue of $6.43 billion for its third quarter, down 1% year-on-year. Gross margins of 46.3% were up 0.2% for the same period. The company reported operating income of $1.8 billion, with earnings per share (EPS) of $1.85. The company’s sales were driven by its “Foundry, Logic and Other” segment as rising interest in AI drove up chip demand for Applied’s customer base.
Applied Material shares are up roughly 44% year-to-date.
-Kevin George
YCharts
Bitcoin Tumbles to Two-Month Low
4 hr 31 min ago
Bitcoin fell about 5% Friday to trade around $26,250, its lowest price since mid-June. The cryptocurrency plunged in the early evening Thursday, likely from the liquidation of about $500 million worth of leveraged positions.
Cryptocurrency exchanges liquidate traders’ positions when their margin account balances can no longer support their open positions.
Other cryptocurrencies followed Bitcoin, with Ethereum falling about 3% and Ripple tumbling 11%.
Shares Of Chinese EV Maker Xpeng Slide on Earnings Loss
4 hr 52 min ago
Shares in Chinese automaker Xpeng Inc. (XPEV) were about 5% lower in early trading Friday after the company reported a larger-than-expected quarterly loss due to rising competition.
The EV maker said its second-quarter revenue came in at an expected 5.06 billion yuan ($700 million), 32% lower than the prior-year quarter. However, gross margins were negative 3.9%, compared with 10.9% a year earlier, due to inventory writedowns on its G3i crossover sports utility vehicle. The company reported a record quarterly net loss of RMB2.8 billion ($390 million), or RMB3.25 ($0.45) per ADS, compared to RMB2.70 billion in the year-ago quarter.
Xpeng saw mixed results for its vehicle sales, which were up 25.9% on a quarterly basis, but still down 36.2% on the year. Management offered a silver lining, saying that higher demand for its SUV was the cause of the deterioration in margins.
Shares of Xpeng are down 31% over the last year, despite rallying 57% year-to-date.
-Kevin George
Autoworker Strike Could Cost $5B in 10 Days
5 hr 18 min ago
If the 143,000 United Auto Workers (UAW) employees who work at Ford (F), General Motors (GM), and Stellantis (STLA) strike for 10 days, it will create $5.6 billion in economic losses, according to a report from the Anderson Economic Group.
The report comes as the auto workers union and Big Three automakers are in talks for a new labor contract, which is renewed every four years. With less than a month before the contracts expire on Sept. 14, union leaders have warned that talks have slowed and begun scheduling procedural votes that can set the stage for a strike.
A 10-day strike against all three automakers would cost workers $859 million in lost wages, while the manufacturers would take a $989 million hit. The total impact of those losses would amount to $3.51 million once other economic factors are calculated.
But the losses don’t end with lost wages and sales. Anderson’s report estimates losses incurred by suppliers, auto dealers, and consumers could total $2.1 billion over a 10-day strike.
-Terry Lane
Stocks Making the Biggest Moves Premarket
6 hr 9 min ago
Gainers:
- Dolby Laboratories Inc. (DLB): Shares of the audio and video technologies company jumped 6% after it was announced it would replace Staar Surgical Co. (STAA) in the S&P MidCap 400.
- Blooming’ Brands Inc. (BLMN): Shares of the owner of Outback Steakhouse rose 10% after it was revealed activist investor Starboard Value had amassed a 5% stake in the company, making it one of its top five investors.
- Ross Stores Inc. (ROST): The discount retailer’s stock gained 5% after it beat analyst estimates for second-quarter revenue and earnings.
Losers:
- Farfetch Ltd. (FTCH): Shares of the online luxury fashion marketplace fell 42% after it reported revenue and earnings in the most recent quarter fell from a year ago. It also cut its full-year outlook and said it would shutter its beauty business.
- XPeng Inc. (XPEV): The Chinese electric vehicle maker’s shares fell 8% after it reported a wider-than-expected loss in the second quarter as deliveries slumped.
- Estée Lauder Companies Inc. (EL): The cosmetic company’s shares lost 6% after it offered a disappointing full-year earnings outlook, citing softer-than-expected demand in its Asian duty-free business.
5 Things to Know Before Markets Open
6 hr 28 min ago
Here’s what investors need to know to start their day:
- Applied Materials (AMAT) reported earnings that beat analyst estimates and raised its sales projections for the fourth quarter, with the largest U.S. producer of semiconductor chipmaking equipment crediting increased interest in artificial intelligence and internet-connected devices for the rise.
- Chinese electric vehicle (EV) maker XPeng (XPEV) reported a wider-than-expected loss for its second quarter, sending its ADRs lower by more than 6%.
- Shares of Deere & Co. (DE) were up 0.4% after it reported a third-quarter profit and guidance for 2023 that was better than analyst estimates, citing continued demand for agricultural equipment.
- Ross Stores (ROST) moved higher by nearly 5% after the discount retailer reported quarterly earnings of $1.32 a share on revenue of $4.9 billion, ahead of analyst projections of earnings of $1.16 a share on revenue of $4.75 billion.
- Moderna (MRNA) said its new Covid vaccine has been effective against the quickly-spreading Eris variant of the virus, as the company will join Pfizer (PFE) and Novavax (NVAX) in releasing new Covid vaccines in the coming weeks.
-Terry Lane
Stock Futures Under Pressure, Putting Stocks on Track for Losing Week
6 hr 47 min ago
Futures contracts connected to the Dow Jones Industrial Average were down 0.5% in early trading Friday.
S&P 500 futures were down 0.6%.
Nasdaq 100 futures contracts slumped 0.9%.
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