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SoFi's debt deal boost, Advance Auto Parts' plunge, HP earnings: Market check

The Yahoo Finance Live team breaks down some of the top moving stocks of the day. SoFi shares jumped on the debt deal moving through Congress. Under the terms of the deal, student loan repayments would restart, which would be good for SoFi's business.

Advance Auto Parts shares plummeted more than 30% after slashing its guidance and dividend.

Shares of both HP Inc. and Hewlett Packard Enterprise ended the day lower after the companies reported earnings that didn't meet investor expectations. Click here to see what HPE's CFO had to say about his company's results.

Video Transcript

- Let's take a look at some of the individual movers of the day. And first up, Advanced Auto Parts. That stock plunging 35%. The company cut its full-year guidance. Also slashed its dividend. Now sees full year 2023 EPS forecast in a range of $6 to $6.50. That's down from its prior forecast of $10.20 to $11.20. About a 40% cut that we are looking at to its outlook here, Diane. And when you take into account what we're hearing from the CEO Tom Greco, he did warn that some of the competitive dynamics that Advanced Auto Parts experienced in the first quarter, he expects that to continue, at least for now.

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- Right. And what's interesting, though, in terms of what's happening to the stock, you had a little bit of a contagion effect to some of the competitors, like AutoZone, which also got dinged as well, but nothing like what we're seeing with Advance Auto Parts, which that looks to be like its worst day ever for that stock. Have to do a historical check just to confirm that. But, again, you're seeing a little bit of a knock-on effect. But Oppenheimer put out a note saying that they think that the issues for Advance Auto Parts are kind of contained to that company and maybe just isolated operational issues there compared to its peers.

On the flip side, though, you have shares of SoFi surging today, up about 15% as it reaps the reward of the debt deal. As it stands, the debt deal, which we know will be voted on tonight, includes language that would trigger student loan repayments. Why is that beneficial to SoFi? The payments had been paused for some time now. SoFi had sued the government earlier this year to end the repayment pause. We know that SoFi is a key player in the student loan sector. So hence being a beneficiary, reaping the rewards of the debt deal.

- Yeah. The stock closing up the last two trading sessions. Up over 28%. The best two-day rally that we've seen since last August. Really just speaks to the role that SoFi does play in student loan payments. Piper Sandler out with a note today saying that they do expect demand for Federal student loan refinances, obviously, to ramp up here in the third quarter. SoFi produced $1.7 to $2.1 billion worth of loans per quarter prior to the start of the moratorium. So a massive player within the space. The fact that the repayments will come back into play by the end of this summer, clearly, SoFi will see a boost from that.

Let's also take a look at shares of Hewlett-Packard Enterprise. The stock is falling today after the company missed revenue expectations. Also reduced its annual sales guidance for the rest of the year. You're looking at losses of just about 7% in HPQ. HP there also off just about 6%. The computing giant did report weaker than expected results. That PC demand weighing on the company's earnings here. Personal system sales down 29% for the quarter. Both of the CEOs of HPE and HPQ speaking with Brian Sozzi earlier today. They're both playing up the role that they are going to play within AI and how that that could potentially boost their business here down the line.

- It didn't help the stock, though, obviously.

- Well, not yet. No. Right. But that's what they're saying, though. They're saying that it's going to be more of a longer term play. And we're not going to see that until at least 12 to 24 months.

- Right. I know. Because we've been talking about this AI and. Every tech sector company obviously has to go big or go home on AI. But it's interesting to see the effect on both of these companies. Sister stocks experiencing sister problems today.

- Yeah. Certainly, both out of favor for investors. But Hewlett-Packard, HP there, obviously really hurt by this slump that we've seen in PC sales. [INTERPOSING VOICES] Much of that--

- --post-pandemic.

- --mostly expected with these results.