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Key Takeaways
- The S&P 500 jumped 2.0% on Thursday, April 24, with surging tech stocks and hopes for thawing trade relationships helping drive a third consecutive day of gains.
- ServiceNow, an enterprise software company, posted strong results for the third quarter, highlighting the demand for its AI enabled products. Its shares moved higher.
- Fiserv’s shares fell as softness in the company’s point-of-sale business and payment processing weighed on its results.
The major U.S. equity indexes have gained ground for a third consecutive session. The Trump administration has offered mixed comments on the trade policy. This week’s rally coincides, however, with an increase in optimism that negotiations may result in lower tariffs.
The S&P 500 advanced 2.0%, while the Dow ended 1.2% higher. The Nasdaq rose 2.7% thanks to the strength of the tech sector.
ServiceNow shares (NOW) jumped 15.5%, notching the top performance in the S&P 500, after the cloud-based enterprise software firm topped sales and profit forecasts with its first-quarter results. ServiceNow stated that tariffs, government efficiency initiatives and trade negotiations are not a threat to its products. Instead, they represent an opportunity for the company.
Hasbro (HAS), the maker of Play-Doh and Nerf, reported sales and profits that were better than expected for the first quarter. Shares of the toymaker soared by 14.6%. The company behind brands like Nerf, Play-Doh and others also maintained their full-year guidance despite uncertainties regarding the potential impact of tariffs. Hasbro has also announced an extension to its licensing agreement with Disney, meaning that the company will produce toys for popular franchises from the entertainment giant such as Marvel and Star Wars.
Microchip Technology, a semiconductor manufacturer, has unveiled a new module to improve power management in data centers and industrial automation. Microchip’s new product aims at boosting efficiency and minimizing power loss through a compact, board-space-saving solution. Microchip’s shares rose 12.4% on Friday.
Shares of financial technology firm Fiserv (FI) plunged 18.5%, suffering the steepest drop of any S&P 500 constituent, following a mixed quarterly earnings report. Profits exceeded expectations, but revenue fell short, due to slower growth at the Clover Point-of-Sale business of the company and lower payment processing in its Merchant Solutions segment. Fiserv announced an agreement with Brazilian fintech company Money Money to provide financing to small business in Brazil.
LKQ, a provider of auto parts, also missed its quarterly sales forecasts and its shares fell 11.6%. LKQ’s adjusted earnings per share (EPS), which were down on a year-over-year basis, also showed a negative free cash flow. The company, which left its guidance unchanged despite the fact that it was monitoring possible tariff effects, has formed a taskforce to evaluate potential challenges as well as opportunities in the changing global trade climate.
International Business Machines’ (IBM) top executive warned, despite the company posting better-than-expected sales and profits for its latest quarter, that customers may be forced to cut back on their spending due to economic uncertainty and changes in government policy. IBM shares dropped 6.6% on Thursday.
