Key takeaways
- The S&P 500 gained 0.8% on Friday, May 31, 2024, closing out a strong month as investors digested the latest inflation data.
- Shares of Caesars Entertainment soared after reports that activist investor Carl Icahn bought a sizable stake in the casino operator.
- Paycom Software shares plunged amid a shakeup in the payroll software provider's executive team.
The major US stock indices closed the trading week and the month of May with mixed results.
Investors had the opportunity to digest the latest personal consumption expenditure (PCE) data, which increased 0.3% in April, matching the previous month's results. “Core” inflation, which excludes more volatile food and energy prices, posted a slight decline in April, which could help ease concerns about a possible reacceleration of price increases.
After trading in negative territory for much of Friday's session, the S&P 500 rebounded in the final hour of trading to end the day up 0.8%. Underperformance in the technology sector kept the Nasdaq limited, which ended minimally below the flat line. The Dow Jones soared 575 points, or 1.5%, to record its best day so far this year, boosted by a rally in shares of Salesforce (CRM) and UnitedHealth (UNH) after they posted big losses at beginning of the week.
Shares of Caesars Entertainment (CZR) rose 11.7%, hitting the S&P 500's top daily performance. Reports say billionaire and activist investor Carl Icahn has built up a large stake in the casino operator. In an interview, Icahn said that he is comfortable with Caesars' current management team and that he has no intention of driving significant transformations.
Salesforce shares advanced 7.5% on Friday, recovering some of the sharp declines recorded on Thursday after customer relationship management (CRM) provided a disappointing sales growth forecast. Despite the lackluster outlook, the company remains confident in its ability to emerge a winner from a potential artificial intelligence (AI) boom.
Dollar General (DG) shares rose 7.0%. Although the discount retailer beat sales and profit estimates when it reported quarterly results Thursday morning, its shares sank that day amid concerns about headwinds, including losses from shoplifting. According to a Friday report from BuscaAlpha, the initial reaction to the results may have overlooked Dollar General's operational improvements and progress on its turnaround plan.
Shares of Paycom Software (PAYC) suffered the day's biggest losses in the S&P 500, falling 8.6% after co-CEO Christopher Thomas resigned after less than four months on the job, citing personal reasons. Chad Richison will remain at the helm of the payroll software provider as sole CEO, as well as chairman and president. The company also announced a further restructuring of its executive team, with the addition of three new leaders to senior management.
Shares of Moderna (MRNA) fell 5.9%, even though the biotech company received approval from the Food and Drug Administration (FDA) for its vaccine to protect against respiratory syncytial virus (RSV). The company's first non-COVID product given the green light by regulators could provide a key source of revenue as pandemic-related sales decline, but Moderna's shot faces competition from RSV vaccines launched in 2023 by GSK (GSK) and Pfizer (PFE). Friday's stock price declines also came amid reports that the U.S. government is close to a deal to fund a trial of Moderna's bird flu vaccine.
Although Dell Technologies (DELL) reported better-than-expected quarterly sales and earnings, analysts expressed concern that rising demand for AI servers could negatively impact the company's margins. Dell shares plunged 17.9% on Friday, with losses spreading to other companies with exposure to servers. Super Micro Computer (SMCI) shares fell 5.3%. HP (HPQ) stock fell 4.9%, giving back a portion of solid gains following Thursday's results.
