Stocks Making the Biggest Moves Midday

Today, there are a number of stocks making the biggest moves midday. These stocks include Caterpillar, which gains 1.9%, Ally Financial, which tumbles 2.7%, and CarMax, which drops 6.4% despite a better-than-expected quarterly report. Let’s take a look at some of these stocks in order to make sense of the market’s behavior.

Caterpillar gains 1.9%

The stock of Caterpillar Inc. rose by more than 1% in midday trading Tuesday. The company reported better-than-expected revenue for the first quarter, as demand for mining and construction equipment improved. The company’s results suggest that the global economy is stabilizing. Investors had previously been concerned about lower demand in China and higher costs.

Caterpillar also announced plans to repurchase shares. Its board of directors recently approved a new authorization to buy shares for up to $ 15 billion. That’s roughly 13% of its market cap. The company says the new authorization won’t be spent all at once. The company still has $1.4 billion remaining under its prior authorization.

Ally Financial falls 2.7%

As shares of Ally Financial fell 2.7% midday, investors should be cautious. The financial services firm reported first-quarter earnings that were down 17% from a year earlier. While the company’s revenue was up overall, used-car prices fell 6.7% in the first quarter. Nevertheless, rising rates may be good for Ally’s balance sheet and future dividend growth prospects.

The company’s asset quality remains strong. It has modest exposure to subprime borrowers. In addition, it has a strong franchise and a seasoned management team. Nevertheless, Ally’s profitability remains constrained by its focus on the retail auto segment and historically weak credit performance. However, Fitch expects the company’s profitability and credit performance to return to normal levels over the next two years.

PayPal stumbles after reporting lower revenue

PayPal shares are down 25% after the company issued disappointing revenue and profit forecasts for 2022. It cited higher inflation, which is impacting consumer spending, as one reason. The company’s shares fell from a high of over $360 per share in the summer of 2016 to $133 a share in Thursday’s trading. The company expects to report non-GAAP earnings per share of $0.87 in the first quarter of 2022, missing analyst expectations of $1.16.

PayPal expects to add 55 million net new users this year. It’s hoping to become the next “super app,” combining commerce and social media. It recently added a high-yield savings account and shopping features to its service.

CarMax falls 6.4% despite better-than-expected quarterly report

CarMax’s quarterly report showed mixed results, but the company’s sales and profit increased. The used-car retailer sold more than one million cars and trucks in the fourth quarter. Revenue rose 49.3% year over year to $7.99 billion, and its retail used unit sales increased 6.7%. CarMax also increased its wholesale sales by 41 percent to 188,098 vehicles. However, CarMax’s gross profit was down slightly compared to a year ago. Meanwhile, average retail selling prices rose nearly 30% to $6,000 a car. The company blamed this rise on higher acquisition costs.

CarMax fell 6.4% Tuesday in midday trading despite a better-than-expected quarterly report. The company sold 240,950 used vehicles and incurred $65.8 million in occupancy costs, but its dealership network continues to generate higher revenue than Vroom’s central facilities. Nevertheless, CarMax continues to face competition in the used car retailing sector from Shift (SFT) and Carvana (CVNA).

Tesla rallies 7.5% after CEO Elon Musk says he sold “enough stock” to reach his goal of selling 10% of his shares

While Elon Musk hasn’t yet sold his entire stake in Tesla, he’s been exercising his stock options as he sells shares. According to the company’s Form 4 filing, he sold 340,564 shares worth $333.6 million. He’s expected to sell the rest of his shares at a later date. In the meantime, he reiterated his Hold rating and $950 price target. He also estimates Tesla will deliver about two-thirds of its vehicles in the fourth quarter.

Meanwhile, CarMax slipped 6.4% in midday trading, despite reporting better-than-expected quarterly earnings. Revenue topped $8.53 billion, beating estimates. Elon Musk has pledged to sell about 10% of his shares. However, he’s still ahead of schedule.