Market Overview
There was a negative bias in today's session. The S&P 500 (-0.9%), Nasdaq Composite (-1.7%), Dow Jones Industrial Average (-0.4%), and Russell 2000 (-1.0%) closed near their lows of the day.
Key Drivers
- Selling activity was driven by normal consolidation interest after a solid run for the major indices.
- Downside moves were not extreme, leaving the S&P 500 1.7% off its all-time high.
- The equal-weighted S&P 500 declined only 0.3% today.
Sector Performance
Losses in mega caps and semiconductor-related shares had an outsized impact on index moves. The PHLX Semiconductor Index (SOX) registered a 3.4% loss and the Vanguard Mega Cap Growth ETF (MGK) fell 1.5%.
This price action led the heavily-weighted information technology sector (-2.1%) to log the biggest decline among the S&P 500 sectors. The next worst performing sector was consumer discretionary (-1.9%).
The only sectors to close higher were real estate (+0.6%), financials (+0.5%), and energy (+0.3%).
Economic Data
Today's economic data didn't garner a big response from stocks. The lineup featured:
- Slightly worse than expected initial jobless claims
- Weaker than expected preliminary manufacturing PMI data for August
- Stronger than expected preliminary Services PMI data for August
- Better than expected existing home sales for July, up 1.3% month-over-month but down 2.5% year-over-year
Upcoming Events
Friday's economic lineup is limited to the July New Home Sales report at 10:00 ET. Tomorrow's headline event is Fed Chair Powell's speech at the Jackson Hole Symposium.
Bond Market
The 10-yr note yield settled eight basis points higher at 3.86% and the 2-yr note yield settled nine basis points higher at 4.01%.
Guru Stock Picks
Bernard Horn has made the following transactions:
- Sold out in XKRX:032640
- Add in LSE:INCH by 3.21%
- New position in XSWX:BARN
Scotia Canadian Dividend Fund has made the following transactions:
Scotia Canadian Equity Fund has made the following transactions:
Today's News
Uber Technologies (UBER, Financial) announced a multiyear strategic partnership with General Motors' (GM, Financial) Cruise to integrate autonomous vehicles into its ride-sharing platform. Starting next year, Uber will deploy Chevy Bolt-based autonomous vehicles for selected rides. This move highlights Uber's ongoing efforts to enhance its autonomous vehicle capabilities.
Workday (WDAY, Financial) saw its shares fall 2% in extended trading despite reporting fiscal second-quarter results that exceeded expectations. The company earned an adjusted $1.75 per share on $2.09 billion in revenue, driven by $1.9 billion in subscription revenue. Workday also raised its adjusted operating margin guidance to 25.25% for fiscal 2025.
CAVA Group (CAVA, Financial) reported a 35.2% increase in revenue for the second quarter, reaching $231.4 million. The growth was fueled by 78 new restaurant openings and a 14.4% increase in same-restaurant sales. Digital sales accounted for 35.8% of total revenue, and the company's adjusted EBITDA rose 15% year-over-year to $34.3 million.
Altria (MO, Financial) declared a quarterly dividend of $1.02 per share, marking a 4.1% increase from the previous dividend. The forward yield stands at 7.91%, with the dividend payable on October 10 to shareholders of record as of September 16.
Faraday Future Intelligent Electric Inc. (FFIE, Financial) surged 103% in afternoon trading, reversing a week's worth of decline. The spike in volume came as the company announced a launch event for its China-U.S. Automotive Bridge Strategy, scheduled for September 19.
Intuit (INTU, Financial) reported Q4 non-GAAP earnings per share of $1.99, beating expectations by $0.14. The company also posted revenue of $3.18 billion, a 17.3% year-over-year increase, driven by strong performance in its Small Business and Self-Employed Group, which saw a 20% revenue increase.
B. Riley Financial's (RILY, Financial) shares plummeted 24% as lenders to Franchise Group, the firm at the center of B. Riley's issues, agreed to give the company a short reprieve to come up with a plan for its $1.5 billion debt. The reprieve allows them until mid-September to deliver a restructuring proposal.
Goldman Sachs analysts released a list of top 50 long positions favored by fundamentally driven hedge funds. This list includes stocks like Amazon (AMZN, Financial) and Microsoft (MSFT, Financial), which are frequently found among the top 10 holdings of these investors. The basket has outperformed the S&P 500 year-to-date.
Peloton (PTON, Financial) shares soared 41% as the company's fiscal Q4 results showed positive sales growth and progress towards profitability. Despite a decline in hardware sales and connected fitness subscriptions, investors focused on improved gross margins and favorable FY25 EBITDA projections.
Tesla (TSLA, Financial) lost another executive as Vaibhav Taneja stepped down, according to a LinkedIn post. Taneja, who was head of Tesla's finance operations, played a strategic role in factory construction and vehicle manufacturing. This departure leaves Laurie Shelby as the only senior female executive at Tesla.
Moderna (MRNA, Financial) and Pfizer (PFE, Financial), along with BioNTech (BNTX, Financial), received Emergency Use Authorization from the FDA for their new COVID-19 vaccines targeting the KP.2 variant. These vaccines are expected to be available in the coming days or weeks.
Ross Stores (ROST, Financial) reported Q2 GAAP earnings per share of $1.59, beating expectations by $0.10. Revenue for the quarter rose 7.3% year-over-year to $5.29 billion. The company maintained a cautious outlook for the second half of the year due to economic uncertainties.
GuruFocus Stock Analysis
- Recessionary Indicators by Freedom Holding Corp.
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- Ford: An Unjustified Falling Knife With Turnaround Potential by Akim Guerreiro
