The S&P 500 (SP500) fell 4.25% during the holiday-shortened week, marking its worst weekly performance since early March 2023.
Nonfarm payrolls data showed weaker-than-expected job growth in August and significant downward revisions to figures for June and July. The inflation data raised further concerns about growth and sparked debate among experts about the size of the Federal Reserve’s expected interest rate cut later this month.
September continues to be a weak month for the S&P 500, which saw a massive sell-off last month after a disappointing July jobs report raised concerns that the economy was headed toward a recession. Adding to those concerns, of the five S&P 500 companies reporting earnings this week, three missed revenue estimates. Three also reported year-over-year earnings per share declines.
Consumer sector companies such as Dollar Tree (NASDAQ:DLTR) and Hormel Foods (NYSE: HRL) with Copart (NASDAQ:CPRT) failed to meet revenue expectations for the quarter.
Dollar Tree Inc. (DLTR) shares fell in early trading Wednesday after the company reported fiscal second-quarter earnings that missed expectations. Earnings per share were reported at $0.67, compared to the consensus of $0.74 and $0.91 a year ago.
The company also lowered its full-year outlook to below consensus due to unfavorable developments in general liability claims, higher depreciation expenses from store investments, and higher utility costs.
Hormel Foods (HRL) had a similar story to tell as it cut its FY24 sales guidance below Wall Street expectations due to production disruptions at its Suffolk, Virginia, facility due to a listeria-related recall, and reduced manufacturing business.
Hormel (HRL) now expects sales to be between $11.8 billion and $12.1 billion, down from a previous forecast of $12.2 billion to $12.5 billion. That’s below the consensus estimate of $12.13 billion.
In contrast to the consumer sector, the technology sector performed well, with both Broadcom (NASDAQ: AVGO) and Hewlett-Packard (NYSE:HPE) beating revenue and EPS estimates.
In the third quarter, Broadcom (AVGO) reported adjusted earnings of $1.24 per share, as revenue rose 47% year over year to $13.07 billion. Analysts’ consensus forecast was for the company to report adjusted earnings of $1.20 per share on revenue of $12.96 billion.
HP Enterprise (HPE) raised its outlook on the back of demand for artificial intelligence and now expects adjusted earnings for the fiscal year to be between $1.92 and $1.97 per share, up from a previous forecast of $1.85 to $1.95 per share.
Several names are set to announce their results next week, with Oracle (NYSE:ORCL) reports on Monday, while Kroger is expected to report on Thursday.NYSE: KR) and Adobe (NASDAQ:ADBE).
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