Progressive, Schwab Boosted by Strong Monthly Updates

Major U.S. equities indexes ticked higher as the latest Consumer Price Index (CPI) data revealed that inflation cooled slightly more than expected. The key inflation gauge rose 2.9% over the year in July, a slight downtick from the previous month.

The moderating CPI bodes well for consumers who have been contending with outsized price increases and boosts the likelihood of the Federal Reserve moving forward with interest-rate cuts at its upcoming meetings.

The S&P 500 was up 0.4% on Wednesday, while the Dow added 0.6%. The Nasdaq Composite eked out a gain of less than 0.1%.

Kellanova (K) shares soared 7.8%, outperforming the other stocks in the S&P 500, after candymaker Mars announced an agreement to acquire the snack company. Home to well-known brands like Cheez-It crackers and Eggo waffles, Kellanova separated from cereal giant WK Kellogg (KLG) in October 2023. The purchase would mark the biggest M&A deal this year and the largest transaction in the food industry since Heinz bought Kraft Foods in 2015, according to Dealogic.

Property and casualty insurer Progressive (PGR) posted strong figures in an update on its performance last month, and its shares popped 5.4% to reach a record high. Companywide insurance lines were up 11% year over year in July, while total personal auto lines increased 12% from a year ago. A report from Zacks Equities Research published Wednesday highlighted Progressive’s potential as a momentum stock, pointing to a steady string of recent gains.

Shares of fellow insurer Allstate (ALL) added 5.2% after the firm announced the sale of its employer voluntary benefits business to StanCorp Financial Group (The Standard) in a $2 billion transaction. The deal is expected to close in the first half of 2025.

Charles Schwab (SCHW) shares jumped 4.6% after the brokerage and financial services firm reported solid asset and customer gains for July. Core net new assets entering the firm reached $29 billion, more than doubling the figure from the same month a year ago. Schwab also added 327,000 brokerage accounts in July, up 8% year-over-year.

Shares of Albemarle (ALB), the world’s largest lithium producer, turned in the weakest performance in the S&P 500 for the second day this week. Wednesday’s loss of 5.7% followed an even steeper drop on Monday and a relatively flat Tuesday. The stock has been under pressure as declining lithium prices, driven by lower demand for electric vehicles, hinder the profitability of Albemarle’s business. The company’s CEO recently called on governments around the world to work on limiting China’s dominance in the lithium industry.

Etsy (ETSY) shares slipped 4.7%, extending losses posted earlier in the week when analysts at Loop Capital lowered their price target and reiterated their “sell” rating on the stock. The online crafts marketplace faces challenges related to shifting e-commerce trends, and it reported a year-over-year decline in gross merchandise sales for the second quarter. Activist investor Elliott Investment Management has taken a sizable stake in Etsy and earlier this year appointed a partner to the company’s board.

Shares of Tesla (TSLA) fell 3.1% on Wednesday, giving back a portion of the strong gains posted in the previous session. The EV maker’s stock has been trending downward since the company reported a significant year-over-year decline in profits in its second-quarter results released last month.