Walgreens Stock Ailing After Earnings Miss

Major U.S. equities indexes posted moderate gains on Thursday ahead of Friday’s Personal Consumption Expenditures (PCE) report.

The PCE report is a key gauge of inflation that could influence the Federal Reserve as it deliberates on the appropriate time to reduce interest rates. Market participants have responded to inflation and other economic data in anticipation of interest rate cuts.

Both the S&P 500 and the Dow edged 0.1% higher on the day. The tech-heavy Nasdaq fared slightly better, advancing 0.3%.

Shares of server and data storage provider Super Micro Computer (SMCI) jumped 7.1%, notching the top performance among S&P 500 components. Supermicro stock has drawn significant attention from investors as the company stands to benefit from artificial intelligence (AI) opportunities. The company has boosted capital expenditures in recent months as it aims to sustain its growth trajectory and maintain its market share in the competitive server market.

An analyst at Mizuho said software companies could be poised to receive an AI boost as enthusiasm about Nvidia (NVDA) and other chipmakers has shown signs of waning. The analyst highlighted cybersecurity firm Palo Alto Networks (PANW) as a likely beneficiary of a potential sector rotation into software, and its shares added 4.8%. Shares of customer relationship management firm Salesforce (CRM) were up 4.0% in the wake of its annual shareholder meeting.

McCormick & Co. (MKC) shares gained 4.3% after the spice manufacturer topped analysts’ estimates for second-quarter earnings per share (EPS) and net sales. Increasing consumer sales in the company’s Europe, Middle East and Africa (EMEA) division helped drive the strong performance.

Walgreens Boots Alliance (WBA) plummeted 22.2%, suffering the heaviest losses in the S&P 500, after the pharmacy giant reported lower-than-expected quarterly profits and reduced its forward outlook, citing a difficult operating environment. The company said its pharmacy margins came under pressure amid brand mix and reimbursement issues, and its retail sales declined year over year, reflecting the impact of increased promotions and high levels of theft. Walgreens also announced that it would close certain underperforming stores.

Shares of packaging provider International Paper (IP) tumbled 7.2% after Brazilian pulp and paper firm Suzano said it would no longer seek to acquire its U.S.-based rival. Suzano’s chief financial officer (CFO) said his company had terminated the negotiations because of a lack of engagement from International Paper. Shares of International Paper had posted significant gains amid reports of the possible transaction.

Micron Technology (MU) shares dropped 7.1% after the memory chipmaker missed profit estimates for its fiscal third quarter and issued muted guidance for the current quarter. Although the company has seen massive growth driven by its high-bandwidth memory (HBM) chips, which can help boost the efficiency of artificial intelligence (AI) systems, the underwhelming forecast raised questions about near-term demand.