The market started November with a few sparks after a difficult October, which saw the benchmark indexes fell for their third month in a row. The S&P 500 had a few bright spots and some major drags. Some unexpected names led the index in October, while banks and solar companies tumbled.
The S&P 500 slid about 2.2% in October, marking its third consecutive monthly decline. The S&P 500 is down about 6.4% over the three months to Tuesday's final October session, and held a 9.2% gain for the year.
Meanwhile, the Nasdaq composite index fell nearly 2.9% in October. The Dow Jones industrial average's losses slowed to 1.4%.
Best Of The S&P 500
Insurance provider Allstate topped the S&P 500 with a 15% gain in October. That was its best monthly gain since November 2020. Shares broke out above the 129.25 buy point for a cup-with-handle base early Thursday after its Q3 report late Wednesday.
Adjusted earnings improved to 81 cents per share from a loss of $1.53 per share last year. Analysts polled by FactSet expected earnings of 45 cents. Total revenue increased 9.8% to $14.49 billion, driven by higher premiums. Wall Street predicted $14.12 billion in revenue.
Insurance peer Progressive rallied 13.5% on the month after an earnings-fueled breakout on Oct. 13. The company beat earnings forecasts and reported a 20% spike in net written premiums in its Q3 results. Piper Sandler upgraded PGR stock to buy and hiked its price target to $186 from $133 following results.
U.K.-based insurance broker Willis Towers Watson advanced 12.9% in October, its largest rally since April 2021. Willis Towers Watson gapped-up on its Oct. 26 earnings, advancing above its 200-day line.
Defense stocks surged early in the month following the Oct. 7 Hamas attack on Israel. RTX, formerly known as Raytheon Technologies, jumped 13.1% in October. The missile and jet manufacturer topped earnings forecasts on Oct. 24 and noted "significant progress" on its assessment of the Pratt & Whitney engine defect that prompted shares to dive in late July. RTX stock reclaimed its 50-day moving average after results.
Fellow defense manufacturer Lockheed Martin swung 11.2% higher on the month as its earnings beat in mid-October helped sustain its gains from the Israel-Hamas conflict. LMT stock jumped 8.9% on Oct. 9 to push above its 50-day moving average.
Discount retailer Dollar General rallied 12.5% after tapping former CEO Todd Vasos to navigate its recent downturn. The company also updated its sales guidance for the year on Oct. 13.
Power utility NRG Energy rose 10% in October and broke out from a massive cup-with-handle base on Oct. 11.
Worst S&P 500 Performers
SolarEdge tumbled 41.4% on the month to its lowest level since April 2020. The solar components maker cut its Q3 guidance on Oct. 19 due to "substantial unexpected cancellations and pushouts of existing backlog" from its European distributors. Analyst were lined up to cut price targets and announce downgrades this week. GLJ Research said SolarEdge's long-standing "stranglehold" on the most profitable solar inverter market in the world "is now decidedly over," according to TheFly.com.
SolarEdge rival Enphase Energy warned of a "substantial demand reduction in Europe" during its third-quarter report that included a 13% revenue decline and guided sales well below the FactSet consensus. Meanwhile, the California-based solar company is seeing a demand slowdown in its own backyard after the Golden State changed the way it calculates the value of excess solar energy put back into the grid. ENPH stock tanked 33.8% in October.
Align Technology, maker of the Invisalign clear teeth-straightening devices, fell 39.5% to a 10-month low in October. Tempe, Ariz.-based Align missed Q3 expectations and lowered its fourth-quarter guidance, noting a "more difficult macro-environment."
Chipmaker ON Semiconductor plummeted 32.6% — back to its January levels. Most of the plunge occurred Oct. 30, on the company's Q4 outlook. A parade of semiconductor manufacturers including Lattice Semiconductor, Texas Instruments and STMicroelectronics lowered their outlooks amid weakening demand.
Zooming Out
Over the past three months, Arista Networks has been the index's best performer, up 29.2% in that period and now holding a 65.1% year-to-date gain. Insurer Progressive is up 25.2% in the past three months and up 21.9% in 2023. Eli Lilly has a three-month gain of 21.9%, and rallied 51.4% since Dec. 31.
Nvidia and Meta Platforms are best performers so far this year. NVDA stock soared nearly 190% while shares of Facebook-parent META stock bolted 159% through Wednesday's close.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
