Adobe Stock Drops on Underwhelming Outlook

Major U.S. equities indexes climbed Friday to wrap up a week of gains as recent data on inflation and the jobs market helped lift expectations that the Federal Reserve could be set for a steeper interest rate cut at its meeting next week. The S&P 500 advanced 0.5% Friday, while the Dow and the Nasdaq both closed around 0.7% higher.

Warner Bros. Discovery (WBD) shares notched the top performance of any S&P 500 stock for the second straight day, surging 10.8% on Friday. The entertainment giant said Thursday that it renewed its distribution deal with Charter Communications (CHTR), a year before the existing agreement was set to expire.

Shares of online crafts marketplace Etsy (ETSY) jumped 7.6% on the day, bouncing off a 52-week low set by the stock in intraday trading earlier in the week. A proposal by the Biden administration to limit tariff exemptions that often benefit Chinese e-commerce companies helped push Etsy shares higher.

Align Technology (ALGN) shares added 6.5% on Friday as Piper Sandler reiterated its “overweight” rating for shares of the provider of clear teeth aligners and other dental products. Analysts pointed to strong trends in the U.S. orthodontics market over recent months that could drive strong quarterly results.

Adobe (ADBE) shares dropped 8.5%, the biggest daily decline in the S&P 500, following the release of the software firm’s results for its fiscal third quarter. Although sales and profits grew from a year ago and exceeded analysts’ forecasts, Adobe’s fourth-quarter sales guidance came in below expectations.

Shares of GPS navigation and wearable technology provider Garmin (GRMN) slid 5.1% after the investment bank Barclays downgraded the stock to “underweight” and reduced its price target. Analysts suggested Garmin’s valuation has become overextended following a year of strong gains for the stock. Barclays analysts also said Garmin could see softer sales in the second half of the year.

Boeing (BA) shares fell 3.7% as thousands of workers for the aviation giant went on strike Friday. The first strike at the company in more than 16 years began after workers voted overwhelmingly to reject a contract deal. The labor dispute could complicate Boeing’s efforts to stabilize its supply chains and resolve production issues after a series of safety incidents.