The stock market took investors on a roller-coaster ride last week, with losses on Thursday and Friday taking away much of the ground major market benchmarks had regained early in the week. However, market participants generally seem as though they want to believe in the staying power of consumers and the broader economy. Stock index futures were up Monday morning as much as half a percent.
A couple of big-name stocks made it into the spotlight, although the news behind the moves was mixed. Lululemon Athletica (LULU 1.31%) got a nice boost to its share price as it earned a highly prestigious accolade in the investing community. However, Pfizer (PFE 0.55%) shares moved lower on a company warning about what the future will bring. Below, you'll see all the details you need to know.
Lululemon gets an invitation
Shares of Lululemon Athletica were higher by about 6% in premarket trading Monday morning. The move came as the yoga and athletic apparel pioneer got an invitation to join the S&P 500 index.
S&P Dow Jones Indices announced that it had tapped Lululemon as a replacement to fill an open spot in the S&P 500. The spot was vacated by Activision Blizzard, which Microsoft acquired on Oct. 13 following a long battle with antitrust regulators who had challenged the deal. Shares of Lululemon will become part of the calculation process for the S&P 500 as of the beginning of trading on Wednesday, Oct. 18.
The move is noteworthy because Lululemon is headquartered in Canada. S&P Dow Jones Indices' methodology requires that index constituents be stocks of "U.S. companies." However, for the index manager's purposes, a company can meet that definition by making required reports with the U.S. Securities and Exchange Commission; having a listing on the New York Stock Exchange, Nasdaq, or certain other U.S. exchanges; and by having more fixed assets and revenue in the U.S. than in any other jurisdiction.
The size of the stock price move suggests that investors were equally surprised that S&P Dow Indices tapped Lululemon. Nevertheless, with the overall goal of providing representation of stocks of companies with a significant impact on the U.S. economy, Lululemon makes a worthy choice.
Pfizer sees lower COVID-19 product sales
Meanwhile, shares of Pfizer were volatile in premarket trading on Monday morning. Shares initially lost ground following an announcement from the drugmaker about its 2023 guidance, with sales of its COVID-19 vaccine Comirnaty and its antiviral treatment Paxlovid expected to fall short of previous projections.
Pfizer had originally expected sales of Paxlovid and Comirnaty to come in at around $21.5 billion for 2023. However, weaker demand for the two COVID-19 products has led the company to reduce that projection by roughly $9 billion. As a result, Pfizer now sees full-year revenue of between $58 billion and $61 billion, with the COVID-19-related shortfall being entirely responsible for the drop. Specifically, Pfizer sees Paxlovid sales coming in $7 billion under previous guidance, while Comirnaty could see a $2 billion shortfall. Pfizer did note that as vaccination season is beginning and new boosters are available, it's too early to make a strong projection about Comirnaty in the fourth quarter.
In addition, Pfizer cut its earnings guidance. The company now sees adjusted full-year earnings of between $1.45 and $1.65 per share, down by more than half from its original range of $3.25 to $3.45 per share.
Some of the hit came as Pfizer renegotiated its supply contract with the U.S. government to account for weak demand. Pfizer reiterated that its non-COVID-19 products are producing growth, and that's likely why its stock is performing better than vaccine stock partner BioNTech, whose shares dropped more than 4%.
