Markets
Robert Half Rose 22% and LKQ Fell 22% on the Same Morning. American Express Raised Its Outlook, Announced About 3,500 Job Cuts and Lost 3.7%
Robert Half rose 21.74% on Friday and LKQ fell 22.47%, the two largest moves in the S&P 500 on a day of earnings. Robert Half posted its first rise in earnings per share since 2022. LKQ withdrew its guidance, took a $111 million impairment and replaced its chief executive. In between, American Express beat, raised its full-year forecast and announced a restructuring of about 5% of its jobs. It fell 3.68%.
The best and worst stocks in the S&P 500 on October 23 moved by almost exactly the same amount, in opposite directions, for the same reason: what their quarterly reports said about the next one. Robert Half, the staffing company, rose 21.74% to $45.87 after third-quarter earnings of 49 cents a share on revenue of $1.359 billion, its first year-on-year increase in earnings per share since 2022, according to The Motley Fool. For a business that lives on companies hiring temporary and permanent staff, the first rise in nearly four years read as a sign the white-collar hiring slump has turned, which matched the strongest hiring in October's flash PMI survey since mid-2022.
LKQ, which distributes replacement car parts in North America and Europe, fell 22.47% to $17.42. Its preliminary release put third-quarter revenue at about $3.32 billion and showed a net loss that included a $111 million impairment charge. It withdrew its guidance, named Salvatore Abbate as chief executive and described problems with a new enterprise software system in Europe. Withdrawing guidance is the move investors punish most, because it replaces a number they can model with one they cannot, and a change of chief executive on the same morning told them the board had decided the problem was not temporary.
American Express sat between the two and still lost 3.68%, to $313.22. Its numbers were good: reported earnings of $5.42 a share, up 31%, including a $1.11 gain from selling its stake in Global Business Travel Group; adjusted earnings of $4.68, up 13%; revenue of $20.06 billion, up 9%; and card spending, or billed business, of $454 billion, up 8%. It raised its full-year earnings forecast to $18.30 to $18.60 a share on a reported basis. It also took a $336 million restructuring charge covering about 5% of its positions, roughly 3,500 jobs according to press reports, which the Associated Press described as its first major job cuts in about a decade. Because the Dow weights its members by share price, the $11.95 drop alone cost the index about 73 of its 653 points.
The rest of the board fitted the same pattern. Deckers Outdoor, which had fallen about 8% after hours on Thursday when it cut its full-year sales forecast to $5.70 billion to $5.725 billion, closed down 4.91% at $81.09, after Piper Sandler downgraded it to underweight. Bloom Energy fell 11.24% despite revenue of $1.24 billion against $1.06 billion expected, as negative operating cash flow of $27.1 million drew more attention than the beat. Western Digital, which had dropped 6.3% after hours on its own beat, finished the regular session down 2.97%. A third of the S&P 500 reports next week, including Alphabet, Microsoft and Amazon, with third-quarter earnings growth for the index tracking above 32%, according to LSEG data cited by Reuters. Friday's lesson for those reports was that a beat is the starting point, not the verdict.