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The Key Takeaways
- The S&P 500 slipped 0.4% on Wednesday, Nov. 27, as the latest PCE report revealed a slight month-over-month uptick in inflation during October.
- The shares of HP & Dell dropped after the mixed results of the two computer companies raised questions about PC demand & the pace of AI adoption.
- Ulta Beauty’s shares rose after an analyst suggested that the retailer of cosmetics could experience a reduction in competitive pressure.
The major U.S. equity indexes fell on the final trading day prior to Thanksgiving.
In October’s Personal Consumption Expenditure data (PCE), released on Wednesday, prices rose by 2.3%, a higher rate than September, when they increased 2.1%. PCE is closely monitored by the Federal Reserve, which could have an impact on policymakers when they consider additional rate cuts.
The S&P 500 slipped 0.4% during the pre-holiday session. The Dow closed down by 0.3% while the Nasdaq, which is dominated by technology stocks, ended 0.6% lower.
Personal computer (PC) manufacturer Dell Technologies (DELL) released a mixed quarterly report, edging out profit estimates but missing sales forecasts. Dell Technologies’ chief operating officer said that while artificial intelligence demand helped to boost networking and server revenues, the AI business was not a priority. “will not be linear,” According to him, AI-driven technology will grow gradually as consumers adapt to the new landscape. Dell shares plunged 12.3% on Wednesday, the steepest drop of any stock in the S&P 500.
HPQ, a printer and PC specialist that also reported its fourth-quarter results in the same quarter as HP (HPQ), saw their shares plummet 11.3%. Sales were a little below expectations but profits for this period were in line with predictions. Profit guidance for this quarter was also below the consensus estimate. HP raised concern over the PC market’s overall trends, as AI PCs only accounted for 17% of total sales.
Design, engineering, and construction software provider Autodesk (ADSK) reported better-than-expected quarterly sales and profits, but its shares fell 8.6% as the company announced a transition in its chief financial officer (CFO) role. Janesh moorjani, the new interim CFO, will take over the job from Betsy Rafael. Rafael assumed her role as Interim Chief Financial Officer in May, amid concern about the firm’s accounting practices.
Texas Pacific Land Corp. (TPL) shares logged Wednesday’s top performance in the S&P 500, adding 4.1%. Originally created to manage land for long-defunct nineteenth-century railroads, Texas Pacific Land Corp. (TPL) has discovered many lucrative uses for the acreage it owns in the Permian, America’s most productive oil producing region. The firm, in addition to offering water and wastewater for fracking, has also found opportunities working with wind farms, solar panels, bitcoin miners and carbon sequestration.
Ulta Beauty shares (ULTA) rose 4.1%. Analysts with investment bank DA Davidson say that although Ulta has been navigating some difficult trends, they anticipate competitive pressures will moderate. Davidson cited a slowdown of sales growth at Sephora “store within a store” Business at Kohl’s and signs that Amazon (AMZN), in the category of beauty, is flattening its market share.
VeriSign, a provider of internet infrastructure services (VRSN), announced it had renewed its agreement with ICANN (Internet Corporation for Assigned Names and Numbers), a non-profit organization which coordinates DNS (domain name system) and IP (internet protocol) addresses. Analysts at Citi claim that the new agreement does not change the provisions that govern the pricing VeriSign charges domain names. According to Citi analysts, VeriSign has not yet renewed its contract with the Department of Commerce. This will likely have more impact on pricing.
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