Important points
The S&P 500 rose 0.2% on Tuesday, October 29, as tech and communications stocks outperformed ahead of quarterly updates from some of the biggest names. Shares of electronic design automation provider Cadence Design Systems soared after the company beat expectations on strong revenue from its AI portfolio. Stanley Black & Decker shares plummeted as weak consumer and auto demand weighed on the company’s results.
Major U.S. stock indexes were mixed on Tuesday. Technology and communications sectors outperformed ahead of a flurry of big earnings releases, while other sectors such as energy and utilities stalled.
The S&P 500 ended up 0.2%. The Nasdaq index rose 0.8%, hitting a new all-time high on the strength of the tech sector. The Dow Jones Industrial Average did not fare well, falling 0.4%.
Cadence Design Systems (CDNS) stock soared 12.5% on Tuesday, upping the daily performance of S&P 500 stocks after the electronic design automation company reported better-than-expected quarterly results and raised its full-year guidance. I came out on top. Revenue from the company’s Cadence.AI portfolio, which incorporates generative AI and big data analytics into the design process, more than tripled year over year.
Incyte (INCY) reported third-quarter profits that were lower than analysts expected, but the pharmaceutical company’s revenue for the period beat expectations and the company’s stock price rose 12.0%. Insight said both the company’s flagship products, cancer drug Jakafi and topical eczema treatment Opzerla, enjoyed strong demand and sales trends during the period.
Application delivery company F5 (FFIV) posted quarter-over-quarter revenue and profit for its fiscal fourth quarter, sending its stock price up 10.1%. F5’s CEO highlighted the company’s transformation from a hardware focus to a provider of security and software solutions better suited to today’s hybrid and cloud-based technology environments.
Shares of IT services provider Leidos Holdings (LDOS) rose 9.5% after third-quarter revenue and profit results beat consensus estimates. Strong booking numbers for the quarter suggest Leidos is poised for further growth, and the company raised its full-year outlook. Major US defense contract wins contributed to the strong performance and positive outlook.
Shares of tool maker Stanley Black & Decker (SWK) fell 8.8%, the biggest decline in the S&P 500, due to a weak quarterly earnings report. The company said weak demand from consumers and the auto industry weighed on its results, leading to missed sales and profits for the quarter. Tuesday’s decline puts Stanley Black & Decker’s 2024 earnings into negative territory.
Ford Motor Co. (F) shares plunged on Tuesday, falling 8.4% after the company announced third-quarter profits that fell short of expectations. JPMorgan and Bank of America lowered their price targets for Ford stock after the earnings slump. But analysts pointed to several reasons for optimism, including high warranty costs contributing to the profit shortfall and highlighting the potential of the Ford Pro division.
Homebuilder DR Houghton (DHI) reported year-over-year declines in sales and net income, missing revenue and bottom line expectations. The company also issued a weaker-than-expected full-year sales outlook, indicating it sees potential homebuilders under pressure to lower mortgage rates. DR Horton stock fell 7.2%.
