Stock Market Update: S&P 500 Slips, Palo Alto Networks Soars
The S&P 500 slipped 0.2% on Tuesday, Aug. 20, ending a streak of eight consecutive positive trading days for the benchmark index. Despite the minor losses, there were notable performances from various companies in different sectors.
Medical Device Makers Face Pressure
Shares of medical device makers Insulet and DexCom moved lower as a popular drug from Eli Lilly showed promise in reducing diabetes risk. A study revealed that the blockbuster drug from Eli Lilly significantly reduces the risk of patients developing type 2 diabetes. This news caused shares of insulin pump manufacturer Insulet to plunge 6.9%, marking the weakest daily performance of any stock in the S&P 500. Shares of DexCom, known for its continuous glucose monitors (CGMs), were down 6.2%.
Crude Oil Futures Prices Decline
Crude oil futures prices moved lower amid hopes for alleviating tensions in the Middle East and as sluggish economic growth in China reduces demand. The downward move in oil prices put pressure on oil and gas stocks. Valero Energy shares fell 4.7%, while shares of Phillips 66 and Marathon Petroleum were down 4.2% and 4.1%, respectively.
Boeing Faces Setbacks
Boeing shares lost altitude on Tuesday, descending 4.2% after the aircraft manufacturer announced the grounding of its 777X test fleet. The decision to hit the pause button on the new jetliner came after an inspection revealed the failure of a key engine mounting structure. This setback adds to a series of safety and production-related issues for Boeing this year.
Palo Alto Networks Surges
Cybersecurity firm Palo Alto Networks posted better-than-expected sales and profits for its fiscal fourth quarter, and its shares notched the biggest gains in the S&P 500 on Tuesday, surging 7.2%. The strong results led several Wall Street analysts to boost their price targets on Palo Alto stock. They praised the company’s ongoing “platformization” efforts and early success with its artificial intelligence (AI) integration initiatives.
Darden Restaurants Gains Momentum
Shares of Darden Restaurants, operator of Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen, and other restaurant chains, gained 3.7% as Raymond James reaffirmed its “outperform” rating on the stock. In its most recent earnings report, Darden said it plans to open 45 to 50 new restaurants this fiscal year. Tuesday’s gains also followed an announcement that Darden chain Olive Garden will reinstate its popular “Never Ending Pasta Bowl” promotion starting next week.
PayPal Receives Positive Outlook
PayPal Holdings shares jumped 3.5% after analysts at JPMorgan reiterated their “overweight” rating on the payment provider’s stock and lifted their price target to $80. More positive commentary came from Josh Brown, CEO of Ritholtz Wealth Management, who discussed his bullish outlook on PayPal in an appearance on CNBC. In addition, PayPal announced on Tuesday that it is expanding its partnership with Ayden, a global financial technology platform, as it aims to speed up guest checkout processes.
Despite the minor losses in the stock market on Tuesday, there were several standout performances from companies in various sectors. The medical device industry faced pressure as Eli Lilly’s drug showed promise in reducing diabetes risk. Crude oil futures prices declined, impacting oil and gas stocks. Boeing faced setbacks with the grounding of its 777X test fleet. However, Palo Alto Networks surged after beating sales and profit estimates, while Darden Restaurants and PayPal received positive outlooks from analysts and investors.
