GM Stock Pops as EVs and SUVs Drive Earnings Beat

Major U.S. equities were mixed and little changed on Tuesday as investors reacted to an array of earnings reports and increasing uncertainty around the Federal Reserve’s plans for additional interest-rate cuts.

After fluctuating throughout the day, the S&P 500 and the Dow ended with minimal losses of less than 0.1%. The Nasdaq eked out a daily gain of 0.2%.

Auto parts distributor Genuine Parts (GPC) did not fare as well with its third-quarter earnings results, falling short of profit forecasts. The parent company of NAPA Auto Parts cited softness in European markets and in its industrial business as a factor behind the underwhelming quarter. The company’s CEO said macroeconomic pressures on international markets are likely to persist for the remainder of 2024, and the firm trimmed its full-year projections. Genuine Parts shares plummeted 21.0%, the steepest daily drop of any S&P 500 constituent.

GE Aerospace (GE) beat overall sales and profit forecasts for the third quarter, but revenue from its commercial engines and services division fell short of expectations, and its shares dropped 9.1%.

Shares of homebuilder PulteGroup (PHM) fell 7.2% on Tuesday. Although the company exceeded quarterly sales and profit estimates, its home sales gross margin declined year-over-year. In addition, incentives designed to attract potential homebuyers increased from the previous quarter, and PulteGroup executives said these initiatives are likely to remain in place.

Walgreens Boots Alliance (WBA) shares tumbled 6.9% after the investment bank TD Cowen cut its price target on the pharmacy giant’s stock. Analysts attributed their more muted outlook on the stock to lower expectations for adjusted profits in fiscal 2025, pointing to the impact of Walgreens’ plans to shutter around 1,200 stores over the next three years as it aims to turn around its U.S. business.

Shares of tobacco giant Philip Morris International (PM) skyrocketed 10.5%, printing an all-time high and securing Tuesday’s top performance in the S&P 500. The maker of Marlboro cigarettes beat quarterly sales and profit forecasts, boosted by surging shipments of its nicotine pouches and heated tobacco devices. Philip Morris said its smoke-free business accounted for 40% of its gross profit, and the company raised its full-year earnings outlook.

General Motors (GM) shares surged 9.8% following the carmaker’s third-quarter earnings report. GM exceeded sales and profit estimates, highlighting successful cost discipline and capital efficiency, increased profitability from electric vehicles (EVs) and redesigned sport utility vehicles (SUVs), and strength in China. The largest U.S. automaker also lifted the low end of its full-year profit guidance.

A strong earnings report also helped lift shares of Quest Diagnostics (DGX), which jumped 6.9% on Tuesday. The health care diagnostics testing and services provider exceeded top- and bottom-line estimates with its third-quarter results, benefitting from strong demand for diagnostic tests. The acquisition of Canada-based diagnostics firm LifeLabs in August contributed to the strong performance, as did patients playing catch-up on medical procedures that they had postponed during the pandemic.