The S&P 500 index, Nasdaq composite and Russell 2000 hit record highs during the week, while the Dow Jones also moved toward all-time bests, amid shifting Trump trade-war winds. A U.S.-Mexico trade deal buoyed markets, though President Donald Trump threatened new trade tariffs vs. China and Europe.
Marijuana stocks soared on Tilray (TLRY) and fell as a short seller targeted Cronos Group (CRON). Lululemon Athletica (LULU) delivered blowout earnings amid booming online sales, but many retailers struggled. Salesforce.com (CRM) beat views but guidance worried investors.
S&P 500, Nasdaq Composite Hit Record Highs
Stocks rallied as Trump trade war winds turned favorable, with a U.S.-Mexico trade deal. The U.S. and Canada failed to reach a deal by Friday, but talks will continue on a revised Nafta. The Nasdaq composite, S&P 500 index and Russell 2000 hit fresh record highs.Lululemon stock soared on blowout earnings. So did Guess (GES), DSW (DSW) and Shoe Carnival (SCVL), but many other top retailers struggled, following their results and guidance. Recent IPOs BJ's Wholesale Club (BJ) and marijuana play Tilray reported earnings for the first time since going public. Several more top stocks broke out into buy zones.
Salesforce Tops Views; Earnings Guidance Light
Salesforce.com soundly beat earnings views while revenue rose 27% vs. a year earlier. But the provider of customer-relationship management software guided low on earnings. Shares fell slightly Thursday but closed the week slightly higher.Lululemon Earnings Crush Estimates
Lululemon Athletica destroyed Street estimates with 82% profit growth to 71 cents a share on a 25% rise in revenue to $724 million, including total comparable sales growth of 20%. That compares to views for 49 cents EPS, $669 million in sales and 9.8% comps. Lululemon guided Q3 high and lifted full-year guidance to $3.45 to $3.53 EPS on $3.185 billion to $3.235 billion in sales, well above consensus for $3.23 EPS and $3.08 billion in revenue. Shares skyrocketed 13% to a new high Friday.
Citron Sinks 'All Talk' Pot Stock Cronos
Shares of Cronos Group plunged 28% Thursday after short-seller Citron Research called the Canadian marijuana producer "all talk" and expressed skepticism about the size of its supply agreements in Canada.Cronos pared losses somewhat Friday and closed the week down just 1%. Meanwhile, Chicago-based cannabis company Green Thumb said that hedge fund billionaire Leon Cooperman had invested in the company.
Recent marijuana IPO Tilray reported its first quarterly earnings as a public company and said "we're a lot closer to federal legalization in the U.S. than most people realize." Tilray vaulted 49% for the week and 195% for the month.
Apparel Earnings, Guidance Mixed
Abercrombie & Fitch (ANF) missed sales and comps estimates but posted a surprise profit. American Eagle Outfitters (AEO) and Calvin Klein parent PVH (PVH) topped but guided low. Tilly's (TLYS) more than doubled EPS, topping all around. Guess (GES) profit rose 90% to 36 cents a share. Sales rose 12.5% to $646 million, slightly missing. But investors are liking the continued turnaround. Shares of Guess and Tilly's rallied while American Eagle, Abercrombie and PVH fell.BJ's Earnings Top; Stock Swings
Membership warehouse BJ'S Wholesale Club (BJ), which was recently taken public again, reported 31 cents in per-share earnings Tuesday, beating views by 4 cents. But 4.4% revenue growth to $3.1 billion wasn't enough to top estimates for $3.28 billion. Full-year guidance was mixed; BJ's sees $1.17 to $1.24 EPS and $12.6 billion to $12.7 billion in revenue. Analysts were looking for $1.14 EPS and $13.01 billion. Shares fell 0.9% Tuesday on earnings but recovered in the following sessions, hitting a new high.Best Buy Disappoints With Earnings Outlook
The consumer electronics retailer beat Wall Street second-quarter estimates and guided higher for full-year sales and earnings. But shares fell on a disappointing third-quarter profit outlook. Best Buy (BBY) CFO Corie Barry cautioned that the adjusted operating-income rate could decline in Q3 as it invests in its multichannel strategy.Specialty Discounters Fall
Burlington Stores (BURL) reported better-than-expected Q2 earnings while revenue and same-store sales were in line with views. But the off-price retail chain sees Q3 earnings of $1-$1.04, below views for $1.09. Deep-discounter Dollar General (DG) reported EPS of $1.52 and a 9.3% increase in sales, both beating views. But Dollar Tree (DLTR) earnings and sales fell short. Burlington and Dollar General shares fell slightly on Thursday, but closed the week little changed. Dollar Tree stock tumbled.Tiffany Reverses; Signet Sparkles
Tiffany (TIF) stock jumped before reversing lower after the high-end jeweler announced better-than-expected earnings and revenue. The firm also reported strong same-store sales and raised its guidance for the year, with revenue growth seen in the high single digits. Meanwhile Signet Jewelers (SIG) stock exploded after the midrange firm scored a surprise double beat. In addition to crushing estimates, the company raised its full year guidance on both earnings and revenue.DSW, Shoe Carnival
DSW (DSW) stock gapped up to a three-year high, after the shoe retailer easily ran past profit and sales estimates, and raised its full-year guidance with the midpoint above consensus. Meanwhile Shoe Carnival (SCVL) also popped after it kicked ahead of views on earnings and sales, with women's nonathletic footwear a big driver. Guidance was raised far above analyst expectations.
Toyota Hails Uber
Toyota (TM) will invest $500 million in the ride-hailing giant to speed development of self-driving cars. It will develop Sienna minivans with Uber's self-driving technology, Bloomberg reported. A third company, Bloomberg said, would operate the fleet. The investment will value Uber at around $72 billion, according to the Wall Street Journal. Toyota also invested in Uber in 2016.
News In Brief
Pfizer (PFE) said its drug called tafamidis reduced the risk of death in patients with a rare heart disease by 30% and the risk of cardiovascular-related hospitalizations by 32%. Analysts were quick to compare it to Alnylam Pharmaceuticals' (ALNY) drug Onpattro, which was recently approved to treat a similar group of patients. Pfizer stock fell 2.1%; Alnylam stock soared nearly 27%.
Zuora (ZUO) shares plunged 19% Friday despite a quarterly earnings beat. The April software IPO's third-quarter forecast for adjusted EPS and revenue came in below expectations.
Yext (YEXT) reported second-quarter results that topped expectations but gave an outlook for Q3 that missed views. Shares fell 1.7% on Friday.
Berkshire Hathaway (BRKB) has taken a small stake in One 97 Communications, the parent of Paytm, India's largest digital payments platform, Reuters reported.
Shares of Box (BOX) fell after the data-storage firm reported second-quarter results that beat analyst estimates but provided an outlook that was below expectations.
Ulta Beauty (ULTA) earnings topped estimates, but the beauty products retailer missed on same-store sales growth, while profit guidance also fell short. Ulta stock fell late Thursday but rallied 6.4% Friday, testing a buy point.
Hewlett Packard Enterprise (HPE) easily topped Wall Street estimates for its fiscal third quarter. For the second quarter in a row, its adjusted earnings per share doubled year over year.
Networking equipment maker Ciena (CIEN) delivered a beat-and-raise fiscal third-quarter report. Earnings growth was the fastest in 10 quarters, up 37% year over year.
Roku (ROKU) stock slipped after a news report said Amazon.com (AMZN) is planning a free, ad-supported streaming video service like the Roku Channel.
Electronic Arts (EA) will delay the release of "Battlefield 5" by a month, to Nov. 20, after many other video titles are released ahead of the holiday season. EA stock crashed 12%.
Coca-Cola (KO) will pay $5.1 billion for U.K. coffee chain Costa. Starbucks (SBUX) was little changed Friday.
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