Closing Bell: Markets Rise: Oil Falls, SpaceX Files, Walmart and Deere Fumble
Oil dropped, volatility plunged and indexes were buoyant with signs that Iran and the U.S. are closer to terms that could end a war threatening global commodity flows and economies.
The Dow Jones Industrial Average ($DJI) rose 0.55% to 50,285.66, the S&P 500 (SPX) gained 0.17% to 7,445.72 and the Nasdaq Composite Index (NDX) rose fractionally to 26,293.09. U.S. crude oil futures fell $1.08 to $98 per barrel.
Everyone got to dig into the financial details in the SpaceX S-1 registration with the Securities and Exchange Commission that posted after the close Wednesday. It is required before initial public offering pitches to potential investors. Intuit (INTU) was the worst performer in the S&P 500 on the day, down 20%, after it said it expects to take a mostly 4Q $300M to $340M restructuring charge related to a 17% workforce reduction. Other technology stocks took a breather. Nvidia (NVDA) stock declined by 1.5% despite its fiscal Q1 results after the bell Wednesday. Its results beat Wall Street estimates thanks to data center sales strength.
Some notable earnings tie together the war's impact on oil prices, transportation costs and consumer spending decisions:
· Machinery giant Deere & Co. (DE) declined –5.19%. Its quarterly results topped analyst estimates, and it maintained its outlook. But management noted global farmer sentiment remains weak. Crop price gains have been offset by high fuel and fertilizer costs – due to the war in Iran – and elevated interest rates, according to reports. In Deere’s Production & Precision Agriculture business, net sales fell 14% to $4.503 billion and operating profit declined 39% to $706 million, due to lower shipment volumes and higher production costs that pressured margins, according to reports. The company said it expects U.S. and Canada large agriculture markets to decline 15% to 20% this year.
· Walmart (WMT) shares sank –7.27%. It reported earnings per share roughly in line with analyst expectations, but offered weak guidance, blaming higher gasoline prices for pinching consumer budgets. The big box retail giant’s CFO David Rainey cited as a sign of this consumer stress: Walmart fuel station customers are buying less gas, with average purchases falling below 10 gallons for the first time since 2020. He suggested grocery prices could rise if the strain on fuel price remains elevated.
· A bright spot: Ralph Lauren (RL) surged more than +13.86% after beating on the top and bottom line with strong sales in China. The company, which makes apparel, fragrances, and home products, cited a marketing push including branding at the Winter Olympics. Asia revenue rose 31%, with sales in China growing more than 50% due to strong Lunar New Year sales. The company raised its quarterly dividend by 10% to $1.00 per share.
Economic Events for Friday, May 22:
- 10:00AM ET Consumer Sentiment
- 10:00AM ET Leading Indicators
- 1:00 PM ET Baker Hughes Rig Count
Earnings Calendar:
- Before Market Open: BJ, BAH, FRO, GSL
- After Market Close: None
