CarMax, Carvana shares climb; HubSpot stock retreats

<p>Angus Mordant / Bloomberg via Getty Images</p> Vehicles sit on a CarMax lot in Albany, N.Y., in December. The used-car retailer

Angus Mordant / Bloomberg via Getty Images

Vehicles sit on a CarMax lot in Albany, N.Y., in December. The used-car retailer’s shares rose Wednesday.

Key Takeaways

  • The S&P 500 added 1% on Wednesday, July 10, 2024, posting its sixth straight record close as Fed Chair Jerome Powell provided a boost to rate-cut expectations.

  • Shares of lithium producer Albemarle clawed back recent losses amid anticipation of an eventual recovery in slumping lithium prices. Shares of auto sellers CarMax and Carvana both climbed.

  • Deckers Outdoor shares tumbled after a report showed a June slowdown in sales of its Hoka and Ugg footwear brands.

Major U.S. equities indexes climbed Wednesday as Federal Reserve Chair Jerome Powell wrapped up a two-day stint of Congressional testimony.

In Wednesday’s appearance before the House Financial Services Committee, Powell focused on the cooldown in the U.S. labor market — a potential indication that the Fed could be moving closer to cutting interest rates following months of speculation about the timing of its first rate cut.

The S&P 500 added 1% in the midweek session, posting a record closing high for the sixth consecutive session and crossing the 5,600-point milestone for the first time. Outperformance in the tech sector helped lift the Nasdaq 1.2%, extending that index’s streak of record closes to seven trading days. The Dow posted a gain of 1.1%.

Shares of Albemarle (ALB), the world’s largest lithium producer, jumped 7.1%, notching the strongest daily performance of any S&P 500 stock. With Wednesday’s gains, the stock clawed back a significant portion of the steep losses posted in the prior session after analysts at two banks reduced their price targets, citing weak lithium prices and an uncertain demand trajectory for electric vehicles (EVs). Other analysts have suggested that lithium prices are poised to recover in the medium to long term.

CarMax (KMX) shares drove 6.5% higher. The gains came after Needham analysts upgraded shares of fellow vehicle retailer Carvana (CVNA) to “buy” from “hold,” highlighting the firm’s growth potential and new features designed to streamline the process of buying cars that qualify for EV tax credits. Carvana shares gained 4.2%.

Shares of pharmacy giant Walgreens Boots Alliance (WBA) were up 4.4%. The stock plunged to 27-year lows at the end of June after the company fell short of profit estimates, lowered its guidance, and announced it would shutter underperforming stores amid sluggish consumer demand. The health care provider’s shares remain down more than 55% year to date.

Deckers Outdoor (DECK) shares dropped 4.9%, suffering the steepest losses in the S&P 500, after a report from data analytics firm M Science pointed to slower June sales of the company’s Hoka and Ugg footwear brands. The deceleration for the popular shoe brands corresponds with broader pressure on discretionary spending, with consumers cutting back on high-end purchases in response to elevated inflation and limited wage growth.

Shares of software companies moved lower, suggesting that a potential rotation from red-hot semiconductor stocks into likely artificial intelligence (AI) beneficiaries in the software industry could be losing steam. Shares of cybersecurity software provider CrowdStrike Holdings (CRWD) fell 3%. Meanwhile, financial software firm Intuit (INTU) said it would lay off 10% of its workforce. Its shares dropped 2.6%. HubSpot (HUBS) fell 12% following reports that Google parent Alphabet (GOOGL) was no longer interested in buying it.

Uber Technologies (UBER) shares skidded 2.9% after Hong Kong said it would begin to regulate ridesharing services. The Transport and Logistics Bureau in the special administrative region announced it would require licensing for Uber and competing platforms while aiming for more rigid enforcement of rules and penalties for violations.

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