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We're Back: S&P 500 Reaches All-Time High, Walmart, Home Depot Earnings, Oracle TikTok Play, Buffett Selling Stocks in 2020

By Jason Hall - Aug 18, 2020 at 6:27PM

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Mega-cap tech stock surge pushed the index above the prior high, retail giants delivered huge quarters, and Berkshire sold a lot of stock in the first half of 2020.

After standing on the threshold for almost a week, the S&P 500 Index (^GSPC 1.73%) is back at an all-time high. The index closed at 3389.78 on Aug. 18, up 7.8 points and surpassing the prior high, reached on Feb. 19. This marks the quickest bear-market recovery in history, with the index regaining all of its losses in 126 trading days. 

Leading the index today was Amazon.com Inc (AMZN 2.07%), gaining 4% after reports came out late yesterday that it was looking to acquire a minority stake in Rackspace, the cloud services company known for high-quality customer service that often partners with Amazon's AWS offering. Amazon also just announced plans to invest $1.4 billion in hiring and new office space. In other tech news, Oracle (ORCL 2.58%) is said to be entering the bidding for TikTok's North American and some other assets.  

On the earnings front, retail giants Walmart (WMT 1.85%) and Home Depot (HD 1.35%) released their most recent quarterly results, reporting huge same-store sales growth. In other news, a closer look at Berkshire Hathaway (BRK.A 1.66%) (BRK.B 1.71%) filings shows something surprising: Berkshire sold off stocks in 32 different companies in the first half of the year. 

Man forcing red line on a chart to turn back up.

Image source: Getty Images.

Index fully recovered, most stocks still down

Today marks a big statistical and emotional moment, with the S&P 500 Index regaining all of its losses since the February high. However, of the 505 stocks in the index, 284 are still below their prices at the beginning of the year. The influence of the tech giants at the top has buoyed the index. Amazon shares are up 72% year to date, while Apple has gained 56% and Microsoft shares are up 33%. The three combine for more than $5 trillion in market cap, pulling the index higher than smaller laggards pull it down. 

Is Oracle a player on TikTok bidding?

According to multiple news outlets, the database giant is supposedly engaged with ByteDance, the owner of TikTok, and is "strongly considering" making an offer to acquire the video-sharing app. Reports are that Oracle may offer as much as $50 billion to buy TikTok's North America, Australia, and New Zealand businesses. 

Whether there's any merit to the rumors remains to be seen, and there doesn't seem to be any business reason for this deal to happen. A cynical observer might think that automatically puts Oracle in the lead position. After all, big tech companies -- including Oracle -- have overpaid before for boneheaded acquisitions that didn't fit or create value. 

Walmart, Home Depot winning the coronavirus lockdown

Millions of Americans were stuck at home in the second quarter, and two of the country's biggest retailers emerged as huge winners. Walmart reported same-store sales increased a massive 9.3%, with e-commerce sales almost doubling in the period. The mega-retailer, which offers nearly everything under one roof, benefited as a one-stop shop: Transactions fell 14%, but the average ticket increased 27% as people stocked up on items and made the most of every shopping visit. 

Home Depot's sales surged even higher. The home improvement giant reported comps increased 25%, driving earnings per share up 27% as millions of homeowners took advantage of the lockdown to complete home improvement projects. 

Berkshire sold stocks in the first half of 2020

Berkshire Hathaway CEO Warren Buffett has long been bullish on American business, and his track record of success over the past half century shows us how rewarding this bullishness can be. However, Berkshire's actions in the first half of 2020 didn't exactly line up with Buffett's usual sentiment. 

As my colleague Sean Williams recently reported, Berkshire SEC filings disclosed that the company sold shares in 32 separate companies in the first half of the year. This included completely selling its stake in nine companies, double-digit reductions in another five, and more modest trimming of its stake in another 18. 

Did Uncle Warren miss out on the coronavirus crash? In a very real way, yes that seems to have been the case. However, Buffett clearly still sees some opportunity. Another filing disclosed that more recently, Berkshire has bought even more Bank of America (BAC 1.09%) shares. BofA is now Berkshire's second-biggest holding, worth more than $25 billion, and it controls about 12% of the bank's shares. 

Has Buffett lost his touch? Don't give up so quickly. Berkshire's best investments during the Global Financial Crisis happened in 2010, more than a year after stocks reached bottom. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Jason Hall owns shares of Bank of America. The Motley Fool owns shares of and recommends Amazon, Apple, Berkshire Hathaway (B shares), Home Depot, and Microsoft and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $120 calls on Home Depot, long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2021 $210 calls on Home Depot, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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Stocks Mentioned

Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.B
$301.55 (1.71%) $5.08
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,280.15 (1.73%) $72.88
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.A
$452,697.25 (1.66%) $7,395.26
The Home Depot, Inc. Stock Quote
The Home Depot, Inc.
HD
$314.89 (1.35%) $4.20
Bank of America Corporation Stock Quote
Bank of America Corporation
BAC
$36.30 (1.09%) $0.39
Oracle Corporation Stock Quote
Oracle Corporation
ORCL
$79.15 (2.58%) $1.99
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$143.55 (2.07%) $2.91
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$132.22 (1.85%) $2.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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