The stock market crushed it again today, with the S&P 500 clipping an all-time high at 2,958, before dropping a tad to close at 2,954.
With fears of a recession fading and the prospect of a rate cut from the Fed, investors are plowing money back into the stock market.
The day’s top winner in the S&P 500 was Oracle, the legendary software company, which crushed earnings estimates after the close yesterday. Oracle ended the day by increasing $4.31 to $56.99, up 8.2%.
Oracle delivered a quarterly profit of $1.16 per share, beating analyst estimates of $1.07.
Oracle is one of the few companies from the 90’s that managed to reinvent and reinvigorate itself. Its cloud application business breathed new life into a company that was in danger of becoming moribund like IBM.
Instead, Oracle generated an astonishing $40 billion in revenue in 2018, with two-thirds of it coming from its cloud business.
Co-CEO Safra Catz pointed out that:
“Our high-margin Fusion and NetSuite cloud applications businesses are growing rapidly while we downsize our low-margin legacy hardware business…”
The second best S&P 500 performer of the day was Noble Energy, rising $1.26 or 6.15 percent, to $21.75.
Noble Energy acquires, explores, develops, and produces both crude oil and natural gas all over the world. The 87-year-old independent energy company had struggled to recover from the oil price crash a few years ago.
Things have improved over the past two years, though, with Noble Energy generating a billion dollars in operating profit.
Today’s move, however, was due to the spike in oil prices. The black gold surged about 6 percent thanks to tensions between the US and Iran, after Iran apparently shot down a US drone in international airspace.
The third place winner in the S&P 500 today was Halliburton, up $1.07, or 4.9 percent, to $22.88. In fact, nine of the top 11 S&P 500 stocks today were in the energy sector.
The spike up in oil prices is a welcome relief to most energy companies. Halliburton itself saw revenue cut almost in half during the oil price crash in 2016.
A $4.11 per share profit in 2014 evaporated to a $0.79 per share loss in 2015, followed by a devastating crash to a loss of $6.69 per share in 2016.
Yet Halliburton is on the mend. 2017 saw a loss of only $0.53 per share, and the company turned a profit of $1.89 per share last year.
Most energy companies like Halliburton carry billions in debt. A disruption in oil prices can wreak havoc with cash flow, threatening a debt default.
Halliburton stock remains near 5-year lows.
Last modified: July 2, 2020 7:23 PM UTC