U.S. stocks rallied to close out the trading week on Friday after two lackluster sessions as a cooler-than-expected inflation report and comments from Federal Reserve officials eased worries about the path of interest rates.
The latest inflation report in the form of the Personal Consumption Expenditure (PCE) index showed a 2.4% rise in November on an annual basis, just below the 2.5% estimate of economists polled by Reuters.
Market Snapshot
The Dow Jones Industrial Average rose 498.82 points, or 1.18%, to 42,841.06, the S&P 500 gained 63.82 points, or 1.09%, to 5,930.90 and the Nasdaq Composite gained 199.83 points, or 1.03%, to 19,572.60. NVIDIA rose 3%, Palantir Technologies Inc. rose 9%, MicroStrategy rose 12%.
Market Movers
FedEx was flat after the shipping and logistics firm said it would spin off the freight trucking business, and reported fiscal second-quarter adjusted earnings per share of $4.05, topping analysts' forecasts. FedEx said its goal was to complete the separation of the freight business, the largest less-than-truckload operator in the U.S., within 18 months. The company did, however, cut fiscal-year guidance, saying it expects earnings per share of $19 to $20, down from prior guidance of earnings per share of $20 to $21, and revenue roughly flat with a year earlier compared with a previous forecast for a low single-digit percentage increase. Rival United Parcel Service Inc rose 2.5%.
U.S.-listed shares of Novo-Nordisk A/S dropped 18% after a late-stage trial of the company's CagriSema obesity drug helped patients lose an average of 22.7% of their body weight, less than the company's expectations for 25%. Analysts noted that the success rate is roughly the same as that of Zepbound, a rival weight-loss drug from Eli Lilly that is already on the market. Shares of Eli Lilly gained 1.4%.
U.S. Steel declined 5% after saying it expects a fourth-quarter adjusted loss per share of 25 cents to 29 cents, well below analysts' expectations that called for a profit of 22 cents. The steel company also reduced its outlook for adjusted earnings before interest, taxes, depreciation, and amortization to $150 million, down from $225 million to $275 million. "Steel prices remained depressed," said CEO David B. Burritt in a statement.
Tesla Motors fell 3.5%. The stock fell 0.9% on Thursday, with some pressure being placed on the stock by an idea proposed by Sen. Rand Paul, a Kentucky Republican, that Elon Musk, CEO of the electric-vehicle maker, be named speaker of the House of Representatives. Tesla didn't respond to requests for comment from Barron's about Paul's idea.
Carnival rose 6.4% after the cruise operator posted fiscal fourth-quarter adjusted earnings per share of 14 cents on record fourth-quarter revenue of $5.94 billion. Earnings per share topped expectations for 8 cents, while revenue was in-line with estimates. Carnival expects 2025 net income of $2.3 billion, a 20% jump from this year's record.
Trump Media & Technology fell 2% after President-elect Donald Trump transferred his entire stake in the parent of Truth Social to a revocable trust. The transaction was described as a gift, with Trump receiving no money for the transfer of his nearly 115 million DJT shares -- worth more than $4 billion -- to Donald J. Trump Revocable Trust. His stake amounted to 53% of Trump Media's shares, according to FactSet.
BlackBerry stock surged 24% after the company reported third-quarter adjusted profit per share of 2 cents, better than Wall Street estimates that called for an adjusted loss of 1 cent, but reduced its fiscal-year outlook ahead of the sale of its Cylance endpoint security assets. The $160 million deal is expected to close in BlackBerry's fourth fiscal quarter, roughly six years after the company acquired Cylance for $1.4 billion.
Occidental rose 3.9% and Sirius XM gained 12% following disclosures that Warren Buffett's Berkshire Hathaway purchased shares in the companies in recent days. Berkshire's largest purchase was about $405 million of Occidental Petroleum. The purchase of around 8.9 million shares raised Berkshire's stake in the energy company to 264.2 million shares, roughly a 28.1% stake.
Market News
Arm Lawsuit Ends in Mistrial with Qualcomm Securing Key Win
ARM Holdings', lawsuit against Qualcomm ended in a mistrial on Friday, with a jury delivering a mixed verdict that found for Qualcomm on a crucial issue, saying Qualcomm had properly licensed its central processor chips.
Arm's shares were down 1.4% in extended trading after the news, and Qualcomm's shares were up 1.8%.
The outcome means the case could be tried again in the future. Judge Maryellen Noreika, who presided over the case in U.S. federal court in Delaware, encouraged Arm and Qualcomm to mediate their dispute.
MicroStrategy Expands Board, Enhances Governance Strategy
MicroStrategy Incorporated has expanded its Board of Directors from six to nine members, adding Brian Brooks, Jane Dietze, and Gregg Winiarksi as new directors. The board’s amendment to the 2023 Equity Incentive Plan allows these new directors to receive equity awards valued at $2 million upon their election, subject to stockholder approval, which highlights the company’s strategic efforts to enhance governance and potentially influence its market positioning.
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