Top risers in the S&P 500 on Friday

32 minutes ago

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• Shares of the building materials supplier Builders FirstSource (BLDR) was the best performing stock in the S&P 500, rising 8.7%. While more clarity on upcoming rate cuts and the promise of lower mortgage rates bode well for construction activity, the company has also attracted attention for its aggressive share buybacks and acquisitions. A report published Thursday in The Wall Street Journal highlighted that Builders FirstSource has managed to reduce net debt despite repurchasing shares and acquiring competitors, putting the company in a strong position despite the uncertain development of the real estate market.
• Cruise companies also benefited from the increasing likelihood that interest rates will fall following Powell’s speech. Cruises are highly discretionary purchases and operators tend to be heavily leveraged, making them particularly sensitive to interest rate changes. Norwegian Cruise Line Holdings (NCLH) rose 7.7% on Friday, while carnival (CCL) shares rose 7.4%.

• Warner Bros. Discovery (WBD) shares rose 7.3% after a report was released on the entertainment giant’s plans to re-orient its cable network strategy. According to The Wall Street JournalThe conglomerate plans to increase spending on programming on its TNT network and focus on high-intensity dramas designed to appeal to the network’s male audience. The strategy marks a shift away from a focus on streaming services and comes after the company lost its broadcast deal with the NBA.
• The prospect of interest rate cuts also boosted shares in the solar industry. Lower interest rates reduce financing costs and make solar systems more attractive. Shares of the manufacturer of solar microinverters Enphase Energy (ENPH) rose 6.5%. Earlier this week, analysts at Truist reiterated their buy rating for Enphase shares, pointing to a possible operational expansion. Shares of the solar module manufacturer First Solar (FSLR) rose 5.9% on the day.

Rejecting

• Intuitive (INTU) shares fell 6.8%, the steepest loss of any S&P 500 stock, after the financial software company reported an unexpected quarterly loss and issued a lackluster full-year earnings forecast. The company behind TurboTax and Credit Karma said last month it plans to reduce its workforce by about 10%, though it intends to replace departing employees with new talent to focus on artificial intelligence (AI) skills.
• Shares of a design automation software company Contents (SNPS) fell 1.6% following the release of the company’s latest quarterly report. Earnings per share (EPS) beat forecasts, but revenue was essentially in line with expectations. In January, Synopsys announced its plan to acquire engineering software provider Ansys (ANSS) in a cash-and-stock deal valued at $35 billion, but British regulators said earlier this week that they are reviewing the proposed transaction’s potential impact on competition in the country.
• Shares of storage and data storage providers Micron technology (MU) fell 1.4% after Susquehanna cut its price target on the stock. The more muted analyst expectations follow an update from Micron that said DRAM and NAND bit shipments will be relatively flat compared to the previous quarter. However, Susquehanna remains positive on the stock, predicting tight supply and demand dynamics that will support a rebound in the memory industry.

–Michael Bromberg

Intuit plunges after surprise loss and weak forecast

3 hours ago

Intuit (INTU) was the worst performer in the S&P 500 on Friday, a day after the company reported a surprise fourth-quarter loss and weak earnings guidance.

The parent company of TurboTax and Credit Karma expects first-quarter fiscal 2025 earnings per share to be between 61 cents and 66 cents and full-year earnings per share to be between $12.34 and $12.54, both below expectations.

Intuit reported revenue of $3.18 billion in the fourth quarter of fiscal 2024, up 17% year over year and above estimates. However, the company reported a loss per share of 7 cents compared to profit of 32 cents a year ago, missing analysts’ expectations for profit of 22 cents.

The results come after Intuit announced plans in July to lay off 1,800 employees, about 10% of its workforce, but to replace them in fiscal 2025 with a nearly equal number of employees focused on artificial intelligence (AI).

Intuit shares fell 7% in recent trading.

–Andrew Kessel

Nvidia earnings will be in focus next week

3 hrs 50 mins ago

Now that Powell’s speech is behind us, attention turns to next week’s earnings from AI chip maker Nvidia (NVDA).

The darling of AI investors will report second-quarter results for fiscal 2025 on Wednesday after the market closes. Investors will be looking for continued data center growth and any updates on reported delays to the new Blackwell chip.

Analysts expect revenue to rise to $28.84 billion, according to estimates from Visible Alpha. That would be more than double Nvidia’s revenue in the same period a year ago. Net income is also expected to more than double year-on-year to $14.95 billion. However, earnings per share (EPS) are expected to decline sharply, largely due to the company’s 1:10 stock split.

Nvidia has beaten earnings expectations in recent quarters, and investors will no doubt be expecting another stunning set of results next week.

You can read the full results preview here.

Nvidia shares rose 3.5% on Friday afternoon. The stock has gained nearly 160% so far in 2024.

–Naomi Buchanan

Market expects stronger interest rate cuts after Powell’s comments

5 hrs 54 mins ago

Following Fed Chairman Jerome Powell’s highly anticipated speech at the Jackson Hole Economic Policy Symposium on Friday, market participants are now expecting an aggressive interest rate cut by the Federal Reserve.

As of midday Eastern time, traders were expecting a 35 percent chance that the Fed would cut its benchmark interest rate by half a percentage point to a range of 4.75 percent to 5.00 percent at the Sept. 18 Monetary Policy Committee meeting, according to CME Group’s FedWatch tool, which forecasts interest rate moves based on Fed Funds Futures trading data. That’s up from the 24 percent probability priced in Thursday.

Traders also estimated a 76 percent probability that the Fed will cut the key interest rate, which is at a 23-year high, by a full percentage point by the end of 2024. Yesterday, the probability was 64 percent.

Powell said on Friday he was confident that inflation was moving toward the Fed’s annual 2 percent target while “the labor market has cooled significantly.”

“It is time to adjust policy,” Powell told economists gathered in Jackson Hole. “The direction is clear, and the timing and pace of rate cuts will depend on upcoming data, the evolving outlook and the allocation of risks.”

Powell pointed out that the risks to the labor market are currently higher than the risk of a renewed flare-up of inflation. The Fed has the dual mandate of maintaining price stability and promoting full employment.

Cava shares boom, new steak offer exceeds expectations

6 hrs 39 mins ago

Cava Group (CAVA) shares jumped on Friday, a day after the company raised its 2024 forecast and said its new grilled steak is “significantly exceeding” expectations.

The Mediterranean fast-casual chain raised its 2024 revenue forecast to 9% from 5.5% midpoint and its adjusted EBITDA forecast to $111.5 million from $102.5 million. In the second quarter, store sales growth was 14.4% year-over-year and Cava opened 18 new locations.

Revenue rose 35% to $233.5 million in the period, but diluted earnings per share (EPS) fell 4 cents to 17 cents. Both figures exceeded analysts’ expectations.

Cava shares rose 17% in recent trading. So far in 2024, the stock has gained 178%.

–Andrew Kessel

Major indices expect gains for second week in a row

8 hrs 24 mins ago

As trading began on Friday, major indices remained virtually unchanged for the week as stock prices fluctuated sharply ahead of Fed Chairman Jerome Powell’s speech on Friday.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average, which are expected to post weekly gains for the second week in a row, were also nearly unchanged for the month. The S&P 500 and Nasdaq rose slightly, while the Dow declined slightly.

Workday shares rise rapidly thanks to positive outlook

8 hrs 43 mins ago

Workday (WDAY) shares rose 14% in premarket trading after the human resources and capital management software provider reported quarterly results that beat estimates and pointed to growth opportunities in international markets.

The stocks formed a double bottom between June and August, a well-known chart pattern that indicates an upward reversal after a prolonged downtrend.

Investors should keep an eye on Workday shares’ key price levels at $264, $279 and $306.

Read our full technical analysis article here.

–Timothy Smith

Futures point to higher opening for major indices

9 hrs 37 mins ago

Futures for the Dow Jones Industrial Average rose 0.4%.

S&P 500 futures rose 0.5%.

Nasdaq-100 futures rose 0.8 percent.