Stocks had a solid performance today. Despite some choppiness, major indices maintained gains throughout the session. The S&P 500 (+1.1%), Nasdaq Composite (+1.0%), Dow Jones Industrial Average (+1.6%), and Russell 2000 (+1.7%) all closed over 1% higher in a broad advance.
Advancers led decliners by a better than 4-to-1 margin at the NYSE and nearly 3-to-1 at the Nasdaq.
The positive trend was driven by favorable earnings news, a drop in market rates, and encouraging economic data. The June Personal Income and Spending Report showed stable behavior in the PCE and core-PCE price indexes year-over-year, supporting the market's belief that the Fed will cut rates in September.
The 10-year note yield settled six basis points lower today and four basis points lower this week at 4.20%. The 2-year note yield settled five basis points lower today and 13 basis points lower this week at 4.39%.
In earnings news:
- 3M (MMM, Financial) closed at $127.16, up $23.77 (+23.0%)
- Mohawk (MHK, Financial) closed at $160.71, up $26.21 (+19.5%)
- Charter Comm (CHTR, Financial) closed at $367.62, up $52.39 (+16.6%)
- Norfolk Southern (NSC, Financial) closed at $247.22, up $24.32 (+10.9%)
- Dexcom (DXCM, Financial) logged the largest decline in the S&P 500, closing at $64.00, down $43.85 (-40.7%) after disappointing FY24 revenue guidance
Broad buying activity led all 11 S&P 500 sectors to close higher. The industrial (+1.7%) and materials (+1.7%) sectors led, while the energy sector logged the smallest gain, up 0.4%.
- Nasdaq Composite: +15.6% YTD
- S&P 500: +14.5% YTD
- Russell 2000: +11.5% YTD
- S&P Midcap 400: +10.6% YTD
- Dow Jones Industrial Average: +7.7% YTD
Reviewing today's economic data:
- June Personal Income: 0.2% (consensus 0.4%); Prior revised to 0.4% from 0.5%
- June Personal Spending: 0.3% (consensus 0.3%); Prior revised to 0.4% from 0.2%
- June PCE Prices: 0.1% (consensus 0.1%); Prior 0.0%
- June PCE Prices - Core: 0.2% (consensus 0.2%); Prior 0.1%
- The key takeaway is that the price indexes didn't worsen year-over-year, supporting the likelihood of a Fed rate cut in September.
- July Univ. of Michigan Consumer Sentiment - Final: 66.4 (consensus 66.0); Prior 66.0
- Consumer sentiment remains guarded due to inflation, election uncertainty, higher interest rates, and a softening labor market.
Monday's calendar does not feature notable economic data.
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Today's News
Nvidia (NVDA, Financial) stock may continue to face downward pressure in the short term, according to a Raymond James note. The chipmaker has dropped 7.20% over the past five days and about 8% in July, with its price moving below the 50-day moving average. Analyst Javed Mirza pointed out that Nvidia has triggered a mechanical sell signal, indicating an intermediate-term corrective phase. The stock may test support around $94.94 if it continues to close below the 50-day moving average.
3M (MMM, Financial) experienced its largest one-day gain since at least 1980, soaring +23% on Friday. This surge followed better-than-expected Q2 earnings and an optimistic full-year outlook. The company has navigated past legal settlements and spun off its healthcare business, leading to a fresh start. J.P. Morgan and RBC analysts praised the strong operating profit and free cash flow, attributing the positive results to new CEO Bill Brown's conservative approach.
EVgo (EVGO, Financial) has added executives from Tesla (TSLA, Financial) and General Motors (GM, Financial) to its leadership team, boosting its stock price by 66% since the start of the month. The company reported a 118% increase in Q1 revenue and significant expansion in gross margin. EVgo aims to further solidify its position as the preferred charging network for electric vehicle drivers amid a competitive landscape.
DexCom (DXCM, Financial) shares plunged to their lowest level in over four years after the company slashed its full-year revenue outlook. Despite beating Q2 earnings estimates, DexCom's revenue missed forecasts by $40M. The revised guidance fell short of analyst expectations, leading to downgrades from J.P. Morgan and Baird. The stock recorded its biggest intraday drop ever, with nearly 48.5M shares changing hands.
Pitney Bowes (PBI, Financial) rose 1.1% following news that logistics startup Stord is acquiring its e-commerce fulfillment services operations. The sale is part of Pitney Bowes' strategic review of its Global E-commerce segment, under pressure from activist investor Hestia Capital Management. The company recently appointed Lance Rosenzweig as interim CEO and elected four board nominees proposed by Hestia Capital.
Intel (INTC, Financial) is expected to report lower-than-anticipated Q2 financial results due to the loss of its Huawei export license, according to Bernstein analysts. The firm's estimated earnings per share for Q2 have been reduced to $0.08 from $0.10, and revenue to $12.74B from $13B. The analysts also lowered Q3 estimates, noting that the stock remains in a challenging position despite better PC market conditions.
Warner Bros. Discovery (WBD, Financial) has filed a lawsuit against the NBA, alleging breach of contract after the league signed a broadcasting deal with Amazon. The suit claims that Turner Broadcasting System Inc. has telecasted NBA games for nearly 40 years and had the legal right to match Amazon's offer for future telecast rights. The NBA's recent $76B-plus package deal excluded long-time partners TNT and TBS.
Tellurian Inc. (TELL, Financial) fell 2% after announcing a sale to Woodside Energy (WDS). The deal includes interim financing from Woodside, which will provide a loan of up to $230M to maintain momentum at the Driftwood LNG site. United First Partners views the deal as a "bailout" and suggests the loan could allow Woodside to reduce the price or exit the transaction.
Teck Resources (TECK, Financial) gained 3.3% after reports indicated it is attracting takeover interest from major mining companies due to its copper assets. Anglo American and Vale are considered logical merger partners, while larger rivals like BHP, Rio Tinto, and Freeport-McMoRan are also monitoring Teck closely. However, any potential deal could face hurdles, including opposition from Teck's founding family.
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