Who Pays for the Deal-Making
Energy stocks fell for a fourth straight day after President Donald Trump said he was close to making “a final determination” on a deal to end the U.S.-Iran war. That top-down decision-making rippled straight into the market, with OneOK leading the S&P 500 energy sector lower, losing more than 3%. Chevron and Exxon Mobil were down 0.8% each, and Occidental Petroleum shed more than 1%.
The people at the bottom of this arrangement do not get a vote in the boardroom or the war room. They get the consequences. CNBC said the companies making the biggest midday moves included Nextpower, AST SpaceMobile, Dell and NetApp, but the clearest sign of hierarchy on display was the way a presidential statement about a war deal sent energy stocks sliding again.
Corporate Winners, Corporate Losers
Nextpower jumped 13% after the company announced it acquired battery storage company Prevalon Energy for about $365 million and raised its full-year revenue guidance. Dell Technologies surged 29% after raising its full-year guidance. Dell said it sees $17.90 in adjusted earnings per share, with between $165 billion and $169 billion in revenue. Analysts polled by LSEG had expected $13.09 per share on $142.5 billion in revenue. CNBC said Friday's gain put the stock on pace for its second-best day ever.
Computer stocks rose as well, boosted by Dell's earnings. Hewlett Packard Enterprise was up more than 14%, Super Micro Computer rose 11.8% and HP was up 8%. The market’s celebration of guidance and earnings is a familiar ritual: executives announce numbers, analysts bless or punish them, and the rest of the economy is treated like a scoreboard for capital.
The Bottom Line Gets Cut
American Eagle Outfitters dropped 13% after comparable sales at the company's American Eagle banner fell 2% in the first quarter, while analysts polled by StreetAccount had expected 3.1% growth. Guidance for the second quarter also disappointed, as the company called for operating income of $45 million to $50 million, versus the FactSet consensus estimate of $65.3 million.
Gap tumbled more than 17% after cutting its sales outlook for the year and now expects companywide sales to grow between 1% and 2%, down from a prior estimate of 2% to 3%. Gap's first-quarter revenue was $3.50 billion, below the $3.52 billion analysts had expected, per LSEG, though adjusted earnings of 38 cents per share beat the anticipated 37 cents. The numbers move up and down, but the structure stays the same: workers, shoppers, and communities absorb the pressure while the market decides who gets rewarded.
What the Launchpad Explosion Left Behind
Space stocks fell after a Blue Origin rocket exploded on a launchpad during a ground test Thursday night in Florida. AST SpaceMobile, which has a partnership with Blue Origin, tumbled almost 17%. EchoStar was off 3.2% and Rocket Lab tumbled 6.2%. A failed test becomes another reminder that the machinery of high-tech ambition is built on risk pushed downward, while the fallout is priced in from above.
Okta added 25% after sharing current-quarter revenue guidance and full-year revenue guidance that exceeded what analysts polled by FactSet were expecting. Okta also reported first-quarter non-GAAP earnings, revenue and operating income that beat consensus estimates. NetApp popped 25% after sharing first-quarter and full-year guidance that beat what analysts polled by FactSet were expecting. The company also posted a fiscal fourth-quarter adjusted earnings and revenue beat. If it holds, the gain would mark NetApp's best daily performance since 2002.
PagerDuty advanced 29% after raising its full-year earnings guidance to between $1.27 and $1.32 per share, up from previous guidance of between $1.23 and $1.28 per share and above FactSet's $1.26 per share estimate. PagerDuty also reported a first-quarter adjusted earnings, revenue and adjusted operating income beat. SentinelOne shed nearly 9% after guiding for revenue in its current quarter of between $289 million and $291 million, below the $292 million analysts polled by LSEG had expected. Projections for adjusted earnings in the period also missed expectations. Reuters Take Five provided a broader global markets themes backdrop for the day.