The stock market rally pulled back after several weeks of gains, but only modestly, especially on the Nasdaq. Fed chief Jerome Powell reiterated expectations for renewed rate hikes after several more central banks upped rates, but not China. FedEx headlined a relatively limited number of earnings reports.
Stock Market Pulls Back
The major indexes retreated modestly from 2023 or 52-week highs while market breadth weakened. But most leading stocks held up relatively well. A pullback had been expected, especially on the Nasdaq, after several weeks of gains. Treasury yields fell modestly. Crude oil prices fell solidly.
Powell Sticks To Rate-Hike Forecast
Fed chief Jerome Powell, testifying before Congress, reiterated recent statements that the Fed will likely raise rates further. On June 14, the Fed left interest rates alone, but a majority of policymakers expect two more quarter-point hikes this year. Markets expect one more hike soon, but see little chance of another. Meanwhile, the Bank of England hiked rates by 50 basis points, with Norway and Switzerland also increasing rates. China's central bank cut two more lending rates, but investors weren't satisfied.
Pullback Healthy So Far, Apple Hits High; What To Do Now
FedEx Earnings Mixed, Guidance Light
FedEx reported a 28% EPS decline, though that slightly topped fiscal Q4 views. Revenue fell 10%, declining more than expected for a third straight quarter. The shipping giant's fiscal 2024 EPS guidance was generally below consensus. Shares initially fell on results, then rebounded.
Commercial Metals Jumps On Results
The steel and metal products firm reported a 22% fiscal Q3 EPS decline with revenue down 7% to $2.345 billion, both beating. Commercial Metals sees Q4 results in line with Q3. CMC stock jumped to a three-month high, moving up in a four-month consolidation. Earlier, U.S. Steel guided Q2 results above views. That followed Nucor guiding higher and Steel Dynamics guiding lower in the prior week.
Accenture Outlook Disappoints
Global tech services and consulting firm Accenture beat fiscal Q3 estimates for its fiscal third quarter with 14% EPS gain and sales up 3% to $16.56 billion. But new bookings disappointed as did its Q4 sales guidance. Shares fell.
KB Home Bests Views
KB Home announced fiscal second-quarter earnings fell 16% while revenue grew 2% to $1.76 billion. The U.S. is in a long-term housing shortage, with the construction of new homes failing to keep pace with the growing population. Housing starts and builder confidence also pointed to a strengthening housing market.
News In Brief
Exact Sciences announced that its next-generation Cologuard colon-cancer test outperformed the original in a study of 20,000 patients. EXAS stock fell.
Eli Lilly said Tuesday it would spend $2.4 billion to acquire Dice Therapeutics. Dice is working on treatments for immunological conditions, including plaque psoriasis. Dice stock hit a record high after Lilly announced the deal.
GMS unexpectedly reported fiscal Q4 EPS and revenue gains of 1%. The building products distributor rose to record highs.
Winnebago topped EPS views with a 48% tumble. Revenue missed, tumbling 38% to $901 million. RV sales were supercharged during the Covid pandemic, but buyer demand has waned.
MongoDB popped Thursday after making a series of AI-related announcements and an expanded Google Cloud partnership.
Patterson Cos. crushed EPS views. The dental and pet care products maker reported an 18% EPS gain with sales up 5% to $1.72 billion, marking three quarters of accelerating profit and revenue growth. PDCO stock bolted out of a base on those results.
Darden Restaurants narrowly topped fiscal Q4 views with a 15% EPS gain and a 6% revenue rise. But the Olive Garden parent gave mixed guidance. Shares fell.
Spirit AeroSystems tumbled after the Boeing supplier shut down production after machinists authorized a strike. Boeing also fell.
