Stocks rise on tech recovery, strong earnings and hopes of rate cuts

Top S&P 500 moves on Friday

5 hours 59 minutes ago

The Advancer

• In addition to being the top performer among the 30 stocks in the Dow Jones Industrial Average, 3M 3M shares jumped 23.0% to their highest level since 2022, leading the S&P 500 index. The shares surged after the maker of Scotch tape, Scotch-Brite and other well-known brands reported better-than-expected second-quarter profit and sales and raised its full-year outlook. Chief Executive Officer William Brown, who took the helm of 3M in early May, said the conglomerate was focused on organic revenue growth following the settlement of a class-action lawsuit and the spinoff of health-care unit Solventum (SOLV).
• of stocks Mohawk Industries Mohawk (MHK), a manufacturer of residential and commercial flooring, saw its shares soar 19.5% after the company reported better-than-expected second-quarter earnings per share (EPS) and a better-than-expected third-quarter profit outlook. The strong quarterly results led Bank of America to upgrade Mohawk shares to a buy rating from underperform and significantly increase its price target. Analysts expressed confidence in Mohawk's ability to continue expanding profit margins while navigating a challenging macroeconomic environment.
• Cable and Internet Providers Charter Communications Charter Telecom (CHTR) also reported second-quarter earnings that beat expectations on revenue and profit, sending shares up 16.6%. Charter reported a decline in broadband subscribers amid tough competition, but saw growth in rural markets thanks to the expansion of mobile phones and government programs aimed at improving internet access in more remote areas.

Rejectors

• Dexcom Shares of DXCM, a maker of blood glucose monitoring devices for diabetics, fell 40.7%, the sharpest drop among S&P 500 companies, after the company missed second-quarter earnings expectations and lowered its sales outlook for the current quarter and full year. The company said a restructuring of its sales team, slower-than-expected new customer acquisition and lower revenue per user contributed to the weak results and more subdued outlook.
• Biogen Biotechnology company BIIB Inc.'s shares fell 7.2% after European regulators rejected Lukembi, an Alzheimer's disease treatment developed by the company in collaboration with Japanese pharmaceutical company Eisai Co., Ltd. The U.S. Food and Drug Administration (FDA) approved Lukembi last year, but the European Medicines Agency's Committee for Medicinal Products for Human Use did not recommend marketing approval for the drug, saying the risk of serious side effects outweighed the potential benefits of the treatment. Eisai's American Depositary Receipts (ADRs) fell 12.9% on the day.
• Aerospace and Defense Company Stocks L3Harris Technologies (LHX) fell 5.7% after the company beat second-quarter profit expectations and raised its full-year guidance, citing strong demand for weapons amid rising global tensions, but Deutsche Bank downgraded the stock to “hold” heading into Friday trading, saying it was valued after its year-to-date gains.

–Michael Bromberg

What the dot-com bubble can tell us about today's markets

7 hours 54 minutes ago

A recent report from Deutsche Bank drew parallels between the current Big Tech exodus and the collapse of the tech bubble in 2000, giving reason to believe history is repeating itself.

In the nine months after the bubble peaked in March 2000, tech stocks fell by more than 50%, while the consumer staples, utilities, and health care sectors each rose by more than 35%.

Research analyst Jim Reed sees parallels between that moment and the current sector rotation among big tech stocks. The Magnificent Seven fell about 12% between July 10 and Thursday but are recovering some of their losses in today's trading. The S&P 500 is down about 4% in the same period. But seven of the 10 sectors in the index have risen over that period, just as they did in 2000, led by utilities and health care.

Read the full story here.

–Colin Laidley

AI chip stocks rise again

9 hours 35 minutes ago

Shares of chip makers including Nvidia (NVDA), Advanced Micro Devices (AMD), and Broadcom (AVGO) rose on Friday, recovering from recent declines, as analysts said they believe the surge in semiconductor stocks this year, fueled by surging demand for artificial intelligence, is far from reaching its peak.

The iShares Semiconductor ETF (SOXX) was up more than 2% in afternoon trading on Friday, recovering from Thursday's decline, but the fund is still down about 7% since the beginning of the month after a tough few weeks for semiconductor stocks.

Semiconductor stocks have been hit this month by concerns about tighter trade restrictions and as investors bet they will benefit from Federal Reserve interest rate cuts and move into smaller caps.

However, analysts suggest the recent pressure on semiconductor stocks may not last, as the overall rally in semiconductor stocks this year is likely to be driven by strong fundamentals and rising demand for AI.

–Kara Greenberg

3M shares rise 20% to highest in two years after earnings announcement

11 hours 2 minutes ago

3M (MMM) shares soared after new CEO William Brown reported better-than-expected profit and sales results, and the Post-it and Scotch tape company also raised its full-year profit outlook.

The strong financial performance comes as 3M refocuses on growth following the settlement of two large class action lawsuits and the spinoff of its health care division, Solventum (SOLV).

3M shares were up about 20% by early afternoon Friday, trading at their highest level since August 2022. The stock's surge helped drive a 700-point rise in the Dow Jones Industrial Average.

–Bill McCall

Hoka and Ugg sales soar, Deckers stock soars

12 hours 1 minute ago

Shares of Deckers Brands (DECK) soared on Friday, a day after the company reported earnings and reported sales growth of 30% and 14%, respectively, for its popular Hoka and Ugg brands compared to the same period last year.

Deckers reported first-quarter fiscal 2025 revenue of $825.3 million, up more than 22% from $675.8 million in the same period last year and beating analyst expectations, according to estimates compiled by Visible Alpha.

The company earned net income of $115.63 million, more than double the $55.25 million it reported in the first quarter last year and beat expectations.

–Aaron McDaid

Charter Communications soars on better-than-expected profit

12 hours 38 minutes ago

Shares of cable, phone and Internet provider Charter Communications (CHTR) soared on Friday after the company reported better-than-expected earnings thanks to increased demand for mobile services.

Charter reported second-quarter earnings per share of $8.49 on revenue that rose less than 1% to $13.69 billion, both of which beat expectations of analysts surveyed by Visible Alpha.

Mobile services revenue rose 36.9 percent to $737 million. Revenue from Internet services, the company's largest division, rose 1.3 percent to $5.81 billion.

Charter shares rose 16% in recent trading, leading the Nasdaq gains.

–Bill McCall

Dexcom Slumps on Weak Revenues and Guidance

13 hours 55 minutes ago

Dexcom (DXCM) shares fell 40% at the open on Friday after the company reported weaker-than-expected second-quarter profit and sharply cut its full-year revenue outlook.

The blood glucose monitor maker said it lowered its full-year organic revenue growth forecast to 11% to 13% from a 17% to 21% forecast in April.

Dexcom shares are expected to decline from a symmetrical triangle, a chart pattern that often precedes a trend move in the direction of a breakout.

Dexcom stock could attract buying interest at key chart levels such as $70, $52, $37, and $24.

It's also worth noting that in the four instances since 2016 when the Relative Strength Index fell below the 30 threshold, stock prices rose by at least 40% within the following six months.

See the full technical analysis here.

–Timothy Smith

Stock index futures rise ahead of key inflation data release

15 hours 22 minutes ago

Futures tracking the Dow Jones Industrial Average rose 0.7%.

S&P 500 futures rose 0.9%.

Nasdaq 100 futures rose 1.1%.