What Happened in the Stock Market Today
U.S. stocks declined on Friday, extending yesterday's losses as rising Treasury interest rates overshadowed an encouraging September jobs report. All told, the Dow Jones Industrial Average (DJINDICES: ^DJI) fell another 0.7%, while the S&P 500 (SNPINDEX: ^GSPC) dropped a more modest 0.6%.
Today's stock market
Index | Percentage Change | Point Change |
|---|---|---|
Dow | (0.68%) | (180.43) |
S&P 500 | (0.55%) | (16.04) |
Data source: Yahoo! Finance.
Tech stocks led the market lower once again, leaving the Technology Select Sector SPDR ETF (NYSEMKT: XLK) down 1.2%. But consumer staples names largely resisted the broader downturn; the Consumer Staples Select Sector SPDR ETF (NYSEMKT: XLP) edged just into negative territory at the close.
As for individual stocks, Snap (NYSE: SNAP) endured a particularly volatile session following a leaked internal memo, while disappointing preliminary results sent shares of IPG Photonics (NASDAQ: IPGP) south.
Image source: Getty Images.
Snap plans for profitability
Shares of Snapchat parent Snap initially rose more than 5% in pre-market trading, but gave back their gains to close down 0.4% after a leaked internal memo revealed the company is targeting sustained profitability for next year.
According to a memo to employees obtained by Cheddar, CEO Evan Spiegel wrote that Snap has not only "made remarkable progress this year executing toward [its] stretch goal" of a breakeven fourth quarter, but also set a goal to achieve accelerated revenue growth and profitability for the full-year 2019.
Spiegel further admitted that Snap "rushed" the recent redesign of its flagship app, "solving one problem but creating many others."
The timing of Spiegel's thoughts is no coincidence; Snap shares plunged more than 5% to an all-time low on Thursday after multiple analysts downgraded the stock. Those downgrades included a note from Evercore's Anthony DiClemente, who argued that Facebook's Instagram is "irreversibly reducing" Snap's ability to live up to investors' longer-term expectations.
In the end, it's encouraging to see Spiegel lauding Snap's recent progress and outlining its ambitious long-term goals. But until investors have more concrete results indicating that those targets are achievable, I suspect the stock will remain under pressure.
IPG Photonics' underwhelming update
IPG Photonics stock plunged 13.8% after the high-performance laser manufacturer announced weaker-than-anticipated preliminary third-quarter 2018 results.
IPG now expects quarterly revenue in the range of $355 million to $356 million, down from its previous guidance (provided in July) for $360 million to $390 million. On the bottom line, that should translate into earnings per share of $1.83 to $1.87, also well below IPG's prior outlook for an EPS range of $1.80 to $2.05.
"The global geopolitical and macroeconomic environment remained challenging as we progressed through the third quarter," explained IPG Photonics CEO Dr. Valentin Gapontsev. "These tariff and trade-related headwinds were the primary driver of weaker than expected performance for our business in China and Europe."
As such, Gapontsev added that IPG's full-year revenue "may" arrive below the company's previous guidance for 7% to 9% growth. But investors will need to wait until IPG reports its final third-quarter results in late October for a revised full-year outlook.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends FB and IPG Photonics. The Motley Fool has a disclosure policy.
