With no clear reason not to, the bulls mustered another winning session on Thursday … the fifth consecutive daily gain. This one was unique though (at least for the S&P 500), in that the index pushed its way to a record high and a record close. After reaching 2,415.72 on an intraday basis, the large-cap index settled to a close of 2,145.07 — up 0.44% — forcing traders to reassess everything regarding the market’s technical situation.
Not every name was on board the bullish trading though. HP Inc (NYSE:HPQ), Hormel Foods Corp (NYSE:HRL) and Marathon Oil Corporation (NYSE:MRO) each ended the day alarmingly deep in the red mostly — though not entirely — thanks to earnings news.
Marathon Oil Corporation (MRO)
Thursday was a miserable day for crude oil, and by extension, for oil stocks. Leading the charge was Marathon Oil, with MRO shares losing 7.1% of its value.
The prompt for the 5% setback in oil prices was news from OPEC. The oil cartel chose to extend its currently curtailed production cuts, but investors were hoping they would be more significant than the 1.8 million barrels per day presently being stifled.
Still, some observers aren’t terribly concerned. Barclays energy markets chief Michael Cohen commented “When those things weren’t included, then this kind of movement happens. We remain constructive on oil prices for next couple months as inventories drawdown.”
Hormel Foods Corp (HRL)
Food company Hormel whiffed on the top- and bottom-line last quarter.
For the quarter ending in late-April, Hormel Foods earned 39 cents per share on sales of $2.19 billion. Analysts, however, were expecting a profit of 40 cents per share of HRL and revenue of $2.22 billion. Perhaps worse, sales as well as profits fell on a year-over-year basis.
Grocery products and Jennie-O Turkey Store sales were the weakest links, more than offsetting strength in sales of its refrigerated foods. That headwind could linger for a while too. CEO Jim Snee commented, “We expect the pressure on Jennie-O Turkey Store to continue for the remainder of the fiscal year given the oversupply in the turkey industry.”
HRL ended the day down 6.4%.
HP Inc (HPQ)
Finally, the computer and printer giant may have posted surprisingly encouraging second-quarter sales and profits after Wednesday’s close, and topped it off by upping its guidance. That still wasn’t enough to satisfy investors though, who sent HPQ to a loss of 3.3%.
Last quarter, HP earned 40 cents per share versus expectations of 39 cents, while sales of $12.39 billion topped estimates of only $11.88 billion. For the quarter underway the company believes it will earn between 40 and 43 cents per share, and for all of 2017 it’s now looking for a profit of between $1.59 and $1.66 per share of HPQ. Both outlooks were, on average, a little better than analysts’ outlooks.
Despite the stock’s pullback — perhaps a “buy the rumor, sell the news” effect — its fiscal Q2 may mark a key turning point. CEO Dion Weisler explained, “This was a breakthrough quarter for HP, and marks the first time both Personal Systems and Print have grown in the same quarter since 2010. We’re delivering solid performance across our portfolio, in all regions, and on key financial metrics. Our team is taking profitable share, out-executing our competitors and delivering some of the best innovation in HP’s history. It’s clear our reinvention is paying off.”
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.