On Friday, August 16, the S&P 500 closed with a modest gain of 0.2%, marking the end of a strong week for U.S. stocks and completing its recovery from a selloff earlier in the month. This positive movement was mirrored by the Nasdaq and Dow, which also posted slight gains of around 0.2%, reinforcing a broader trend of market resilience amidst fluctuating conditions.
DexCom (DXCM) was a standout performer on Friday, with shares jumping 3.2%. The company announced that its G7 continuous glucose monitoring (GCM) system would soon be available through Quebec’s public prescription drug plan, a significant development that fueled investor optimism. DexCom’s stock had faced a steep decline late last month after a disappointing second-quarter earnings report. However, the announcement regarding the G7 system helped the company recover some of the ground it had lost earlier in the quarter, signaling a potential turnaround.
Ulta Beauty (ULTA) also saw a significant boost, with shares rising 3.1%. This increase built on gains from the previous session, driven by news that Berkshire Hathaway, the holding company led by Warren Buffett, had acquired a stake in the cosmetics retailer. The move by Berkshire Hathaway was seen as a vote of confidence in Ulta’s business model, which is anchored by a loyal customer base, a broad range of products across different price points, and ambitious expansion plans, including ventures into the Mexican market. Morningstar, a leading investment research firm, echoed this sentiment, highlighting Ulta Beauty as a strong investment opportunity with solid growth potential.
Tapestry (TPR), the luxury goods company behind well-known brands like Coach, Kate Spade, and Stuart Weitzman, saw its shares rise by 3.1% after reporting better-than-expected sales and profits for its fiscal fourth quarter. The company’s performance was bolstered by strong demand for Coach products, particularly the popular Tabby shoulder bags. However, Tapestry did face some headwinds, including softer sales in its Kate Spade and Stuart Weitzman lines, as well as a slowdown in its business in China. Despite these challenges, the strong performance of the Coach brand was enough to lift investor sentiment and push the stock higher.
Bath & Body Works (BBWI) gained 2.4% as the retailer continued to benefit from its strategic partnership with Netflix’s hit series “Stranger Things.” The company recently launched a new line of fragrances and candles inspired by the show, tapping into the series’ broad appeal to drive sales. In addition to the product launch, Bath & Body Works declared a quarterly cash dividend of 20 cents per share, underscoring its commitment to returning value to shareholders. The company is set to release its second-quarter earnings results on August 28, with investors keenly awaiting further details on its performance.
On the other hand, Amcor (AMCR) was the worst performer in the S&P 500, with its shares dropping 3.7%. The global packaging company reported a revenue shortfall in its fiscal fourth-quarter earnings, driven by soft customer demand and inventory destocking in key markets like North America and Europe. Despite these challenges, Amcor remains optimistic about its future, projecting growth in volumes and earnings for fiscal 2025. However, the disappointing quarterly results weighed heavily on the stock, leading to the sharp decline.
Chipotle Mexican Grill (CMG) also faced a tough day, with its stock falling 2.8%. The decline followed news earlier in the week that CEO Brian Niccol would be leaving the company to take up the top position at Starbucks. Niccol’s departure raised concerns among analysts and investors, given his pivotal role in driving Chipotle’s recent growth and turnaround efforts. Several analysts, including those from Evercore and Baird, lowered their price targets for Chipotle, citing uncertainty over the company’s future leadership and its potential impact on investor sentiment.
Palo Alto Networks (PANW) shares fell 2.7% ahead of the company’s fiscal fourth-quarter earnings report, which is scheduled for release on Monday. The decline marked a reversal from earlier in the week when the stock had gained following several Wall Street analysts raising their price targets. However, concerns over a projected slight year-over-year decline in earnings per share for the quarter led to a pullback in the stock on Friday.
Finally, Vistra Corp. (VST) saw a 2.6% drop after a filing with the Securities and Exchange Commission (SEC) revealed that Stephanie Moore, the company’s executive vice president and general counsel, had sold nearly 35,000 shares for a total value of almost $2.8 million. Insider selling often raises red flags among investors, as it can be interpreted as a lack of confidence in the company’s future prospects. Despite Vistra’s potential to supply power to energy-intensive data centers, the stock declined following the news of Moore’s share sale.
Overall, the stock market’s performance last week demonstrated its resilience in the face of various challenges. While certain sectors and individual companies faced difficulties, the broader market’s gains underscored investor confidence in the continued strength of the U.S. economy and corporate earnings. However, the mixed performance across different industries highlights the importance of diversification and careful stock selection in navigating the current market environment.