Stocks opened with modest gains ahead of Fed Chair Jerome Powell’s speech at Jackson Hole, Wyoming. The chairman said he expects the strong economy to continue while inflation remains under their 2% target rate. He also expects further rate tightening if the strong growth continues. The market digested the comments and gained upside momentum allowing the S&P to hit a new all-time high and keep the Dow on pace for its seventh weekly gain in the past eight weeks. ECONOMIC NEWS: In the U.S., durable goods orders dropped 1.7% in July following June’s 0.7% gain. In Fed news, Fed chairman Jerome Powell said in his Jackson Hole speech that there is “good reason” to expect that recent strong economic performance will continue. Powell also reiterated that gradual hikes remain appropriate is growth continues to be strong. COMPANY NEWS: Shares of HP Inc. (HPQ) were 1.6% lower after the company reported third quarter results, provided guidance for the fourth quarter, and raised its fiscal 2018 earnings outlook. Following the report, Loop Capital analyst Ananda Baruah maintained his Buy rating and $28 price target on the stock, saying that it was “another thesis confirming quarter” of “multiple undervalued aspects” to its investment story… Gap (GPS) shares slipped 10.1% despite better-than-expected second quarter results and maintained guidance for fiscal 2018. Following the results, Deutsche Bank analyst Paul Trussell said that challenges at the Gap brand present risk to estimates in the second half of the year, despite momentum at Old Navy and improvement at Banana Republic… Meanwhile, shares of T-Mobile (TMUS) were in focus after the company and its Metro PCS unit informed customers about a potential security breach that was “discovered and shut down by the company”… Additionally, Reuters reported that Papa John’s (PZZA) has hired Bank of America and Lazard as financial advisers in an effort to find ways to “stabilize” the pizza chain. Papa John’s shares rose 5.2% after the news. MAJOR MOVERS: Among the noteworthy gainers was Geron (GERN), which jumped 29% after Johnson & Johnson (JNJ) posted a job opening on LinkedIn for an “EMEA Strategic Pricing Manager” role that would “also be accountable for shaping our pricing approach for Imetelstat.” Also higher were Splunk (SPLK) and Autodesk (ADSK), which gained a respective 16% and 15% after reporting quarterly results. Among the notable losers was Acacia Communications (ACIA), which slipped 7.5% after BofA/Merrill analyst Tal Llani downgraded the stock to Underperform from Neutral, saying shares have re-rated since the ZTE (ZTCOY) export ban. Also lower were Hibbett Sports (HIBB) and Foot Locker (FL), which fell 29% and 13.3%, respectively, after reporting quarterly results. INDEXES: Near midday, the Dow was up 162.53,0.63%, to 25,819.51, the Nasdaq was up 67.31, or 0.85%, to 7,946.65, and the S&P 500 was up 16.93, or 0.59%, to 2,873.62.
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