Stocks notched back-to-back wins Friday, with today's upside enough to pare most of the main indexes' weekly deficits incurred from Monday's market meltdown.
Amid a bare economic calendar, single-stock headlines swayed sentiment. Palantir Technologies (PLTR), for instance, continued its impressive climb after Wedbush analyst Daniel Ives called the data analytics firm's new partnership with Microsoft (MSFT, +0.8%) "game-changing." PLTR stock rose 2.5%, bringing its weekly gain to 21%.
Sweetgreen soars on strong earnings
Sweetgreen (SG) was another stock making waves Friday, surging 33.4% after earnings. The fast-casual restaurant chain specializing in salads said second-quarter revenue jumped 21% year-over-year to $184.5 million while its quarterly loss narrowed to $14.5 million. The company also raised its full-year revenue and same-store sales guidance.
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"We're particularly encouraged by positive traffic as initiatives across menu innovation and marketing accelerated trends through Q2 despite industry pressures," says UBS Global Research analyst Dennis Geiger, who maintained a Buy rating on the consumer discretionary stock but raised his price target to $37 from $31. For reference, SG closed today at $35.01.
Intel sinks after Moody's lowers credit outlook
Intel (INTC) plunged after Moody's lowered the chipmaker's unsecured ratings outlook to negative from stable. The firm also downgraded INTC's senior unsecured rating to BAA1 from A3. "The downgrade of the ratings reflects our expectations for Intel's significantly weaker profitability over the next 12 to 18 months," Moody's explained.
Today's 3.8% drop made Intel the worst Dow Jones stock on Friday, though this is nothing new for INTC. Indeed, shares are down more than 35% for the month to date thanks to the company's ugly Q2 earnings report, which included news it has suspended its dividend to cut costs.
"We believe Intel faces a long road to recovery," wrote Argus Research analyst Jim Kelleher (Hold) in a post-earnings note. "As it seeks to maintain its aggressive node and product roadmap in client and data center, Intel likely faces an extended period of low- to no-profit quarters even on the planned reduced cost base."
As for the main indexes, the S&P 500 closed Friday up 0.5% at 5,344, the Nasdaq Composite was 0.5% higher at 16,745, and the Dow Jones Industrial Average added 0.1% to 39,497. All three indexes finished with modest weekly losses.
Inflation data, blue chip earnings on deck
Looking ahead, next week has the potential to be another volatile one for stocks. Indeed, the highly anticipated July Consumer Price Index (CPI) report will be released Wednesday morning and Wall Street will be watching to see if the recent trend lower in inflation will continue.
"The July CPI report is likely to further the case that inflation is quieting down even if it has not yet returned all the way back to the Fed's target," says Wells Fargo senior economist Sarah House. "We look for headline CPI to have advanced 0.2% in July, which would keep the year-over-year rate steady at more than a three-year low of 3.0%." She expects core CPI to also be up 0.2% month-over-month "amid a rebound in some of the more volatile 'super core' components."
Meanwhile, several blue chips will be featured on the earnings calendar, including Cisco Systems (CSCO, -0.8%). The networking equipment maker made news today amid rumors it is planning another round of layoffs. As for its fiscal Q4 results, Wall Street is expecting more top- and bottom-line weakness.
"The networking market continues to be depressed with the remnants of the supply chain boom and bust still playing out in the calendar year's Q2, the telecom winter persisting, and now the economic backdrop showing slowing signs due to the restrictive Fed policies," says Needham analyst Alex Henderson (Hold).
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