Wall Street's major indexes ended higher on Friday as investors flocked back to tech megacaps that had triggered broad sell-offs earlier in the week, and inflation data boosted optimism that the Federal Reserve will soon commence cutting interest rates.
Five members of the so-called Magnificent Seven rose on Friday, led by Meta Platforms which climbed 2.7%. The two exceptions were Tesla and Alphabet, whose lackluster earnings had triggered Wednesday's big market sell-off. They both fell 0.2%, with Alphabet dropping to its lowest close since May 2.
Market Snapshot
The S&P 500 gained 59.88 points, or 1.11%, at 5,459.10 points, while the Nasdaq Composite climbed 176.16 points, or 1.03%, to 17,357.88. The Dow Jones Industrial Average rose 654.27 points, or 1.64%, to 40,589.34.
Market Movers
DexCom, Tandem Diabetes Care - DexCom, the maker of glucose monitoring devices, dropped 40.7% aftercutting its fiscal-year sales forecast. The company said it expects fiscal-year revenue of $4 billion to $4.05 billion, down from a previous estimate of $4.2 billion to $4.35 billion. Analysts had been expecting 2024 revenue of $4.33 billion. “While DexCom advanced several key strategic initiatives in the second quarter, our execution did not meet our high standards,” said Kevin Sayer, DexCom chairman, president and CEO. Tandem Diabetes Care, the insulin delivery and diabetes technology company, dropped 1.5%.
3M - 3M surged 23% aftersecond-quarter earningsbeat analysts’ estimates. report. The consumer-and industrial-products company boosted its earnings guidance range in 2024 to $7 to $7.30 a share, up from a prior range of $6.80 and $7.30.
Deckers Outdoor - Deckers Outdoor raised its profit outlook for fiscal 2025after reporting first-quarter earnings and revenue that beat analysts’ estimates. The maker of Hoka sneakers and Ugg boots said it expects earnings in the fiscal year of $29.75 to $30.65 a share, up from a prior outlook of $29.50 to $30. Shares jumped 6.3%.
Coursera - Coursera, the online learning platform, reported a jump of 11% in second-quarter revenue to $170.3 million, beating analysts’ estimates of $164.7 million. The company said itsurpassed more than two million enrollmentsin its generative artificial-intelligence “catalog of courses, credentials, and hands-on projects.” The stock surged 44.7%.
Ford - Ford Motor ticked 0.3% higher after shares of the auto maker tumbled 18.4% on Thursday,the stock’s worst daily percentage declinesince it fell 25% on Nov. 19, 2008. Ford reported second-quarter adjusted earnings of 47 cents a share that missed analysts’ estimates by a wide margin and left its profit outlook for the year unchanged, disappointing investors.
Alphabet - Alphabet closed Thursday down 3.1% and finished down 0.2% on Friday after OpenAI announced it has been testingnew artificial-intelligence search capabilitieswith a temporary prototype called SearchGPT. Alphabet’s Google is the most dominant global search engine. Alphabet declined 5% on Wednesday after the company topped second-quarter profit and sales expectations but ad revenue from YouTube disappointed.
Nvidia - Nvidia rose 0.7%. While shares of the chip maker have risen almost 129% this year, they havehit a rough patch, tumbling over the past week as Alphabet stuck to, rather than raised, its spending guidance for the rest of 2024, and as investors rotated out of big technology stocks.
Biogen - Biogen declined 7.2% after European drug regulators rejected the request of the company and partner Eisai for approval of their Alzheimer’s medicine Leqembi. The regulators highlighted safety and efficacy issues in the rejection of the drug.
Norfolk Southern - Norfolk Southern posted second-quarter earnings that rose from a year earlier and beat Wall Street estimates. The railroad operator reported adjusted earnings of $3.06 a share, higher than forecasts of $2.86. The stock rose 10.9%.
Bristol-Myers Squibb - Bristol Myers, the pharmaceutical company, jumped 11.4% after reportingsecond-quarter adjusted earningsthat beat estimates and raising its full-year guidance. Global sales of Eliquis, a drug used to reduce the risk of stroke and blood clots, rose 7% in the quarter from last year to $3.4 billion.
Charter - Charter Communications rose 16.6% after the cable company reportedearnings and revenue in the second quarterthat beat Wall Street estimates. Mobile service revenue jumped 37%.
Windtree Therapeutics - Windtree Therapeutics shares surged 152% as the biotechnology company withdrew its May 9 filing for a stock and warrant offering.
Market News
Fed’s Key Inflation Gauge Rose 2.5% in June from a Year Ago, Easing Path to Rate Cut
An important gauge for the Federal Reserve showed inflation eased slightly from a year ago in June, helping to open the way for a widely anticipated September interest rate cut.
The personal consumption expenditures price index increased 0.1% on the month and was up 2.5% from a year ago, in line with Dow Jones estimates, the Commerce Department reported Friday. The year-over-year gain in May was 2.6%, while the monthly measure was unchanged.
Fed officials use the PCE measure as their main baseline to gauge inflation, which continues to run above the central bank’s 2% long-range target.
Core inflation, which excludes food and energy, showed a monthly increase of 0.2% and 2.6% on the year, both also in line with expectations. Policymakers focus even more on core as a better gauge of longer-run trends as gas and groceries costs tend to fluctuate more than other items.
Ackman's Pershing Square USA Postpones IPO, NYSE Website Shows
Pershing Square USA, a fund managed by billionaire Bill Ackman, has postponed its initial public offering, according to a notice on the New York Stock Exchange's website on Friday.
The delay follows Ackman's recent slashing of the fundraising target for the U.S. fund.
The IPO was originally scheduled to price on Monday.
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