Market Performance
The stock market had a solid showing following last week's broad retreat. The major indices exhibited some up and down action, but maintained gains through the entire session, ultimately selling near session highs.
- The Dow Jones Industrial Average (+1.2%) bounced nearly 500 points.
- The Nasdaq Composite (+1.2%) logged a roughly 200 point gain.
- The S&P 500 (+1.2%) jumped more than 60 points.
Many stocks participated in upside moves, driven by buy-the-dip interest, but mega caps and semiconductor shares had an outsized impact on index performance.
Sector Performance
All 11 S&P 500 sectors logged a gain, and seven of them were higher by 1.0% or more. The communication services sector registered the slimmest gain due to the price action in Alphabet (GOOG), while the consumer discretionary (+1.6%) and information technology (+1.4%) sectors closed near the top of the leaderboard.
Notable Stocks
- Vanguard Mega Cap Growth ETF (MGK) settled 1.2% higher.
- PHLX Semiconductor Index (SOX) jumped 2.2%.
- Alphabet (GOOG 149.54, -2.39, -1.6%) dropped after the start of Google's antitrust trial.
- Apple (AAPL 220.91, +0.09, +0.04%) unveiled new iPhones and other products at today's "It's Glowtime" event, settling the session slightly higher.
Treasuries
Treasuries settled mixed after last week's big gains, which acted as fuel for selling in the stock market. The 10-yr note yield settled one basis point lower at 3.70%, and the 2-yr note yield settled two basis points higher at 3.67%.
Year-to-Date Performance
- S&P 500: +14.7% YTD
- Nasdaq Composite: +12.5% YTD
- Dow Jones Industrial Average: +8.3% YTD
- S&P Midcap 400: +6.2% YTD
- Russell 2000: +3.5% YTD
Economic Data
Reviewing today's economic data:
- July Wholesale Inventories 0.2% (consensus 0.3%); Prior 0.2%
- Consumer credit increased by $25.5 billion in July (consensus $11.5 billion) after increasing a downwardly revised $5.2 billion (from $8.9 billion) in June.
The key takeaway from the report is that consumer credit was flowing in July for both revolving and nonrevolving credit, aided by falling interest rates.
Looking Ahead
Tuesday's economic lineup features the August NFIB Small Business Optimism Survey at 6:00 ET.
Guru Stock Picks
Dodge & Cox has made the following transactions:
PRIMECAP Management has made the following transactions:
Ron Baron has made the following transactions:
Today's News
Oracle (ORCL, Financial) shares rose 5.9% in extended trading on Monday following the company's robust first-quarter results and new partnerships with Amazon Web Services (AMZN, Financial) and Google Cloud (GOOGL, Financial). Oracle reported an adjusted $1.39 per share on $13.31B in revenue, surpassing analyst expectations. Despite cloud revenue slightly missing estimates, infrastructure revenue surged 45% year-over-year to $2.2B. Oracle also declared a cash dividend of $0.40 per share.
Summit Therapeutics (SMMT, Financial) saw its shares jump over 64% on Monday after Citi promoted the company as a top pick following positive clinical trial data for its bispecific antibody, ivonescimab. The data showed a 49% reduction in disease progression or death compared to Merck's (MRK, Financial) Keytruda in lung cancer patients. Citi raised its price target for Summit from $13 to $19, citing the drug's potential as a blockbuster.
SoFi (SOFI, Financial) CEO Anthony Noto predicted that the Federal Reserve would reduce interest rates by 75 basis points in 2024, which he said would boost loan demand and investment opportunities. Speaking at the Goldman Sachs Communacopia + Technology Conference, Noto emphasized the benefits of an immediate 50 basis point cut to spur economic activity.
Shares of CVS Health (CVS, Financial) and Humana (HUM, Financial) fell on Monday after the White House announced new health insurance requirements aimed at improving access to mental health services. Leerink also warned that insurers could face heightened risk to their Medicare Advantage Star ratings. In contrast, Elevance (ELV, Financial) and Cigna (CI, Financial) saw their shares rise.
Apple (AAPL, Financial) unveiled its new iPhone 16 models at the "Glowtime" event on Monday, but shares fell 1.4%. The new iPhones feature advanced AI capabilities and a new camera control feature, along with the 3 nanometer A18 chip. The iPhone 16 and iPhone 16 Plus come in new colors such as ultra marine and teal.
IBM (IBM) CFO Jim Kavanaugh highlighted the company's focus on hybrid cloud and generative AI as long-term growth drivers. Speaking at the Goldman Sachs Communacopia and Technology conference, Kavanaugh noted that IBM's strategic acquisitions, including Red Hat, have been pivotal in its transformation and growth in free cash flow.
Rubrik (RBRK) shares fell 3% in extended trading despite reporting better-than-expected fiscal second-quarter results and raising its full-year guidance. The cybersecurity company now expects revenue between $830M and $838M for fiscal 2025, up from a prior range of $810M to $824M. CEO Bipul Sinha emphasized the increasing recognition of the need for robust cyber resilience plans.
Super Micro Computer (SMCI) gained attention as Glasshouse Research praised its risk-reward profile and dismissed concerns raised by Hindenburg Research. Glasshouse noted that Super Micro's recent filing delay was likely a precautionary measure, and that the company's accounting metrics did not align with Hindenburg's short thesis.
Workhorse (WKHS) shares surged in premarket trading on Monday following an order from FedEx (FDX) for 15 W56 step vans. The electric delivery trucks met FedEx's operational requirements and significantly outperformed traditional delivery trucks in fuel economy and emissions reduction.
Wolfspeed (WOLF) introduced a new silicon carbide module aimed at transforming the renewable energy and fast-charging sectors. The company also announced a partnership with EPC Power to employ these modules in utility-grade solar and energy storage systems.
Schwab Trading Activity Index (SCHW) edged down to 53.16 in August from 54.81 in July, reflecting increased risk aversion among retail investors. Despite the dip, the index remained at moderate levels compared to historical averages, as investors rotated out of equities and into fixed income securities.
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