Sign In5 Insights To Know Before Markets Open on Thursday, July 11
Alex Vellor
S&P 500 Hits New Milestone
The S&P 500 reached a new milestone on Wednesday, closing above 5,600 for the first time, driven by a surge in semiconductor stocks.
The broad market index jumped 1.02%, marking a seventh consecutive day of gains. The Nasdaq Composite also hit a record high, climbing 1.18%. Meanwhile, the Dow Jones Industrial Average rose by 429.39 points, or 1.09%.
Taiwan Semiconductor rose 3.5%, Nvidia (NASDAQ: NVDA) gained 2.7%, and Qualcomm (NASDAQ:QCOM) and Broadcom (NASDAQ: AVGO) increased by 0.8% and 0.7%, respectively, leading the day's gains.
Hubspot Shares Plummet on Alphabet's Decision
In contrast, shares of software company Hubspot (NYSE:HUBS) plummeted 12% after Bloomberg reported that Google parent Alphabet had shelved plans to acquire the company.
Although Alphabet had shown interest earlier this year, the sides never progressed to detailed discussions about due diligence. Hubspot, known for its marketing automation software, has seen strong revenue growth recently. An acquisition could have bolstered Google’s business software and cloud infrastructure revenue. However, U.S. regulators' scrutiny of Big Tech deals likely influenced Alphabet's decision to halt the acquisition.
Premarket Movers:
| Company | Stock Change | Reason |
|---|---|---|
| Delta Air Lines (NYSE:DAL) | slumped 9.5% | Forecast lower profits in the current quarter than expected, citing discounting pressure in the low end of the market. |
| Alcoa (NYSE:AA) | rose 2.3% | Disclosed positive second-quarter results, helped by higher alumina and aluminum prices. |
| Spotify (NYSE:SPOT) | rose 1.2% | Jefferies assumed coverage of the music streaming service with a ‘buy’ rating, saying it is increasingly confident in its ability to “comfortably deliver sustainable 15%+ rev growth over the next 3 years.” |
| Apple (NASDAQ:AAPL) | fell 0.2% | Reached an agreement with EU antitrust regulators to allow access to its tap and go payments technology to rivals. |
| Pfizer (NYSE:PFE) | rose 2.4% | Announced that it was advancing the development of its key anti-obesity drug, a likely profitable market. |
| PepsiCo (NASDAQ:PEP) | fell 2.3% | Released disappointing second-quarter revenue, hit by declining demand in North America for its beverages and snacks. |
| WD-40 Company (NASDAQ:WDFC) | surged 12% | Reported higher-than-expected earnings and revenue in the third quarter. |
Costco Raises Membership Fees
Costco (NASDAQ:COST) announced it will increase membership fees for the first time in seven years. Starting September 1, the price of a standard annual membership in the U.S. and Canada will rise by $5 to $65.
The Executive Plan membership will increase by $10 to $130 annually. This fee hike comes despite Costco delaying its usual timeline due to high inflation. Traditionally, the retailer raises fees every five and a half years.
PepsiCo Misses Revenue Expectations
PepsiCo (NASDAQ:PEP) missed its Q2 revenue expectations due to slowing sales from price hikes and competition from private-label brands, particularly in the U.S.
Analysts noted prices are stabilizing but remain higher than pre-pandemic levels, limiting further increases. PepsiCo raised average product prices by 5% during the quarter ending June 15, but organic volumes fell by 3%. Executives acknowledged subdued performance in many food categories, including snacks, as value-conscious consumers affect spending.
Shares fell 2.2% in premarket trading after adjusting fiscal 2024 organic revenue growth expectations to about 4%, down from at least 4%.
Don Nesbitt of F/m Investments noted the company's projections are low due to ongoing weakness among lower-income consumers. Despite these challenges, PepsiCo reported an adjusted profit of $2.28 per share, beating estimates of $2.16. Revenue rose 0.8% to $22.50 billion, missing estimates of $22.57 billion. Easing production costs and price hikes contributed to profitability despite the revenue miss.
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Alex Vellor
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