Major benchmarks ended a turbulent week on a positive note Friday, despite any significant new developments in the economic issues that have unsettled the market. The Dow Jones Industrial Average (^DJI 1.76%) and the S&P 500 (^GSPC 2.47%) posted nice gains but were still down for the week. Advancing issues outnumbered losers by almost 4 to 1 on the New York Stock Exchange and all sectors rose.
Today's stock market
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Investors grow optimistic about NVIDIA
NVIDIA reported second-quarter results and guidance that had investors believing that the chipmaker is recovering from its recent slump, and shares jumped 7.3%. Revenue of $2.58 billion represented a year-over-year decline of 17% but was 16% above the company's sales last quarter. Non-GAAP earnings per share of $1.24 fell 36% compared to the year-ago period but increased 41% sequentially. Analysts were expecting EPS of $1.14 on revenue of $2.54 billion.
Gaming revenue, which had been hurt by the disappearance of the cryptocurrency mining market, fell 27% from last year but recovered 24% from Q1. Data center revenue was down 14% year over year but up 3% sequentially. Professional visualization and automotive revenue grew 4% and 30%, respectively, compared with Q2 a year ago.
The setback in gaming was old news earlier this year, but softness in sales to data centers had raised investor concerns. Growth in gaming notebooks and new chips supporting real-time ray tracing are improving the outlook for NVIDIA's gaming segment, while sales into data centers seem to be heading upward again. Analysts on the conference call were also happy to see gross margin improve from 59% in Q1 to 60.1% in the second quarter, with company officials saying to expect between 62% and 62.5% in Q3.
The trade war hits Deere's results
Shares of Deere rose 3.8% despite the farm equipment maker reporting fiscal third-quarter earnings that missed expectations and lowering full-year sales guidance. Revenue declined 2.6% to $10.0 billion, compared with the consensus analyst estimate of $9.39 billion. Adjusted earnings per share increased 4.6% to $2.71, missing expectations for $2.85.
Deere said that the high degree of uncertainty hanging over the agriculture sector due to the U.S.-China trade war is affecting sales of farming equipment. "Concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases," said CEO Samuel Allen in the press release. "At the same time, general economic conditions remain positive and are contributing to strong results for Deere's construction and forestry business."
Deere said it now expects sales to rise 4% this year, down from earlier guidance of 5%. The stock had fallen 16% from its high last month, so the company's outlook was probably more optimistic than investors had feared.