Weekly Rise of 3% In S&P 500 and Nasdaq Indexes

Barry Adams
12 Aug, 2022
New York City

Benchmark indexes continued their 2-month long ascend after investors surmised inflation may have peaked, easing pressure on the Federal Reserve in lifting rates. 

Optimism reigned on Wall Street on the hopes that the recent continued decline in crude oil prices will be reflected in the inflation data for August. 

The inflation peaking theory is taking hold among investors and may are betting that the interest rate hike at the next Fed's policy meeting may be lower than 75 basis points. 

The S&P 500 index gained 1.7% to 4,280.15 and the Nasdaq Composite index added 2.1% to 13,047.19. 

For the week, the S&P 500 index gained 3.3% and the Nasdaq Composite index jumped 3.1%. 

The market rally since mid-June has extended the S&P 500 index by 16.7% and the Nasdaq Composite index by 22.6%. 

Tech stocks led the gainers for the fourth week in a row and energy stocks led the losers after crude oil prices continued to slide the for the second month in a row. 

Futures of crude oil declined $2.46 to $91.88 a barrel and natural gas inched 9 cents lower to $8.78. 

The yield on 10-year U.S. Treasury notes declined to 2.84% and 2-year notes inched up to 3.25%. 

Alphabet, Apple, Microsoft, Tesla, and Meta jumped between 1.7% and 5%.

Exxon Mobil, Chevron, Schlumberger, EOG Resources, and Valero gained less than 1%.  

Movers: Illumina, Peloton, Poshmark, LegalZoom 

Illumina, Inc dropped as much as 20% after closing down 8.4% to $208.33 after  after the gene-sequencing technology company said second quarter revenues increased 3% to $1.26 billion from $1.13 billion a year ago. 

The company swung to a net loss of $535 million from $185 million a year ago. 

The current quarter included $609 million in legal contingencies for the potential fine that the European Commission may impose of up to 10% of our consolidated annual revenues and an estimated accrual of $156 million related to the settlement of litigation with the U.K.-based BGI Group in July 2022. 

In the quarter, the diluted loss per share was $3.40 compared to a profit of $1.26 a year ago.  

The company also lowered its 2022 revenue growth outlook to between 4% and 5% and GAAP diluted earnings per share loss between $2.93 and $2.78.  

The company earlier guided in May at the time of the release of the first quarter results consolidated revenue growth in the range of 14% to 16% and GAAP earnings per diluted share of $2.33 to $2.53.

LegalZoom.com Inc jumped 18% to $12.97 after the online legal content forms and support provider said revenues in the second quarter increased 9% to $163.8 million from $150.4 million a year ago. 

Net loss in the quarter shrank to $13.8 million or 7 cents a diluted share from $38.4 million or 31 cents a diluted share a year ago. 

Average order value increased 5% to 296 from $282 a year ago and subscription revenues increased to $91.3 million from $69.4 million a year ago. 

The company guided third quarter revenues between $149 million and $151 million. 

The company lowered its full-year 2022 revenues estimate in the range of $612 million to $616 million from the previous estimate between $650 million and $660 million.

Poshmark Inc fell 8.4% to $11.80 after the social fashion marketplace operator said second quarter revenues increased 9% to $89.1 million and gross merchandise value increased 8% to $483.5 million from $449.6 million a year ago. 

Active buyers in the twelve months ending in 12 months to the second quarter increased 14% to 8 million from 7 million a year ago. 

Second quarter loss jumped to $22.9 million from $2.5 million a year ago and diluted loss per share rose to 29 cents from 3 cents. 

Poshmark guided third quarter revenues between $85 million and $87 million and adjusted operating loss between $9 million and $11 million. 

Peloton Interactive Inc rose 13.6% to $13.53 after the expensive fitness equipment maker said it plans to eliminate 780 positions, close a significant number of its 86 retail stores, and increase prices on some of its products.  

The company is shifting its model away from a manufacturer to serving its loyal customer base through variable revenue streams.