Last week, the S&P 500 (SNPINDEX:^GSPC) jumped almost 26 points, or about a percent and a third, and set new daily closing record highs on every single day except Tuesday. With investors having put first-quarter earnings season behind them and now focusing on prospects for mid-year earnings reports, economic data and policy are getting more attention, and favorable news on U.S. jobs and policy moves from the European Central Bank helped send many stocks higher. Within the S&P, Broadcom (NASDAQ:BRCM), Joy Global (NYSE:JOY), and Under Armour (NYSE:UAA) were the best performers on the week.
Broadcom climbed close to 20% as the chip company made a bold strategic decision, choosing to stop playing in the cellular baseband chip market. Although Broadcom had hoped to become a competitive force in the niche, the company had failed to stand up to its primary rival, and giving up on cellular baseband should save Broadcom hundreds of millions of dollars in research and development and overhead expenses related to the endeavor. Even though the loss of revenue will make overall sales look ugly in future quarters, the actual hit to the bottom line shouldn't be nearly as severe, and in the long run, the move will give Broadcom greater financial flexibility to pursue more promising areas in the future.
Joy Global picked up 12% as investors and analysts alike looked to a potential bottoming process for the mining-equipment maker. Joy Global has suffered for a long time due to low prices for commodities, especially coal, which have led mining companies to cut their capital expenditures and reduce purchases of mining equipment. But even though Joy Global's earnings report from earlier this week showed that revenue dropped 32% from year-ago levels, bookings came in just 7% lower, and bookings in surface-mining equipment actually jumped 34% from 2013 levels. It's far too early to say that Joy Global is out of the woods, but value investors are starting to look more seriously at the company as a candidate for bottom-fishing.
Under Armour gained 10%, with most of the athletic apparel-maker's gains coming after analysts upgraded the stock at midweek. Even though Under Armour is much smaller than its chief rival in the athletic industry, the upstart has had increasing success catering to a new generation of young shoppers, and its efforts to woo women while keeping its male customer base have reaped rewards as well. As Under Armour looks to compete on the global stage, shareholders hope that its success in the North American market can translate to a worldwide challenge against what has been a dominant opponent for decades.
The S&P appears aimed squarely at 2,000, but that's still a good distance away. Investors need to watch whether these three stocks can keep gaining ground and lift the S&P 500 to a new milestone.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.