The major US stock averages fell again on Monday, led by a 1% drop in the Nasdaq. Stocks were dragged lower by continued momentum on Friday, when a stronger-than-expected jobs report raised fears the Federal Reserve would have to stick with its falcon stance longer than expected.
While the broader market pushed lower, AI stocks remained a bright spot. With recent headlines about the industry fueling retail interest in the group, C3.ai (New York Stock Exchange: AI) posted its fifth consecutive day of earnings. BigBear.ai (BBAI) and SoundHound AI (SOUN) also rose.
Looking at individual shares, Life Storage (LSI) posted a double-digit percentage advance after receiving a hostile takeover offer from Public Storage (PSA). Meanwhile, the earnings news sent NAPCO Security (NSSC) to a fresh 52-week high.
On the downside, The Children’s Place (PLCE) slumped after posting a disappointing forecast.
Sector in focus
Continued interest in artificial intelligence led to further gains in industry-linked stocks. This included C3.ai (AI), which extended its recent gains with an advance of more than 6%.
This marked the fifth consecutive day of gains for C3.ai (AI) and the tenth highest result in the last 12 sessions. The rally included an 18% rally on Friday, when DA Davidson began covering the stock with a Buy rating, characterizing the company as a “truly scarce asset.”
Monday’s rise allowed AI to set a new 52-week intraday high of $30.92. Overall, the stock has soared nearly 150% so far in 2023.
The latest rally also led to the rise of other names in the sector. BigBear.ai (BBAI) jumped nearly 18% on Monday, while SoundHound AI (SOUN) soared 43%.
featured winner
Life Storage (LSI) got a boost after receiving an unsolicited takeover bid from rival Public Storage (PSA). The advance sent shares up more than 11%.
Under the proposed deal, each LSI share would exchange for 0.4192 of a PSA share. This equated to an acquisition price of $129 per share, valuing the potential transaction at $11 billion.
On the news, LSI rose $12.47 to close at $123.05. This added to a rally that began in early January. The stock is up 28% so far in 2023, hitting its highest close since September.
prominent decliner
While the stock pared its early losses significantly, The Children’s Place (PLCE) slumped after posting weak preliminary fourth quarter results. The stock ultimately ended down 4%.
The children’s clothing retailer said fourth-quarter net sales would total between $454 million and $456 million. Analysts were looking for a figure of around $468 million. The company attributed the disappointing forecast to a challenging macroeconomic environment.
Following the guidance, PLCE posted an anticipated loss of 14%. The stock rallied in the middle of the day, but still ended lower at $1.91. This led to a closing mark of $44.75.
Monday’s decline retraced a portion of the gains the stock had made over the past month. Last Thursday, the PLCE posted its highest close since August. Even with the drop, shares are still 26% higher for 2023 so far.
new notable high
NAPCO Security (NSSC) posted better-than-expected financials to a new 52-week high, with shares up 10%.
The security products maker reported second-quarter non-GAAP EPS of $0.28, beating projections by more than 85%. Revenue increased 27%, also beating estimates. Adjusted EBITDA more than tripled from last year to $10.3 million.
Based on the earnings news, NSSC rose to a 52-week intraday high of $36.78. The stock retraced some of the gains later in the session, but still ended at $34.37, up $3.23 on the day.
The rally added to a recent rally. The shares are up 25% in the last month and more than 77% in the last year.
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