Major S&P 500 Movers on Friday
Decliners
- Shares of Applied Materials (AMAT) dropped 14%, marking the steepest decline among S&P 500 stocks. Despite exceeding sales and profit expectations in its fiscal fourth quarter, its forecast for the current quarter was lower than anticipated, affected by global economic uncertainties, particularly in China. Other chip equipment companies like KLA Corp. (KLAC) and Lam Research (LRCX) followed suit with respective falls of 8.4% and 7.3%.
- Shares of Paramount Skydance (PSKY) fell 4.6%, as the stock, which had seen significant rises earlier in the week due to “meme stock” comparisons, adjusted after its merger with Paramount Global.
- Cisco Systems (CSCO) saw a 4.5% decline following a downgrade to “hold” from “buy” by HSBC, which cited concerns over modest revenue growth and diminishing momentum due to the restocking cycle winding down.
Advancers
- UnitedHealth Group (UNH) shares surged after Berkshire Hathaway (BRK.A, BRK.B) increased its stake in the company. UnitedHealth’s stock climbed 12%, with other healthcare insurers also benefiting from this news.
- Sunrun (RUN) experienced a 33% jump after exceeding quarterly sales and profit estimates. The company is preparing for changes in clean energy tax credits, leveraging past experiences to mitigate impacts.
- Moderna (MRNA) climbed 5%, building on earlier gains after NIH director Jay Bhattacharya recognized the importance of mRNA technology, contrasting the Trump administration’s stricter stance on funding mRNA research.
Stock Valuations Echo Dotcom Bubble Warnings
As U.S. stock prices approach record highs, analysts are beginning to highlight valuations reminiscent of the dotcom bubble. The S&P 500’s price-to-book value ratio sits at 5.3, slightly above levels just before the 2000 crash, according to Bank of America’s Michael Hartnett.
Hartnett suggests, “It better be different this time,” emphasizing that key indicators are unlike those seen in the 1990s when tech stock valuations soared, only to crash.
External factors like bond allocations, the rise of artificial intelligence, and currency issues are indicating a potentially healthier market cycle. However, the prospect of the Federal Reserve cutting interest rates too soon could devalue the U.S. dollar and lessen investment attractiveness, according to Hartnett.
Notable Meme-Stock Movements
Excitement in the market includes meme-stock activity seen with Opendoor (OPEN), which gained around 10% after announcing changes in its executive team and a bullish outlook from a prominent money manager.
Not all meme stocks saw action, as traditional names like GameStop (GME) and AMC Entertainment (AMC) remained relatively quiet, alongside other stocks like Kohl’s (KSS) experiencing some movements.
