Key Highlights

  • Accenture finished among the four worst performers in the S&P 500 on Friday, a sharp Reversal after Thursday's session, described as the company's best day ever, when shares closed at $212.30.
  • Fiscal fourth-quarter Revenue of $18.68 billion beat analyst estimates, but forward guidance came in slightly below estimates and the organic-growth outlook was described as measured.
  • Friday's decline was described by market commentators as profit-taking after an outsized one-day rally, with peers Gartner and hard-drive makers Seagate and Western Digital also among Friday's weaker names.
  • The broader market rallied on a weak jobs report, with the S&P 500 up 56.27 points to 7,722.72 and the Nasdaq-100 closing at a record, even as Accenture, in the same technology sector, was a notable laggard.

What goes up the fastest often comes down first. Accenture (NYSE:ACN), the Dublin-based consulting and technology services giant, found that out on Friday. Shares slid and finished among the four worst performers in the S&P 500, a sharp reversal from the day before. The decline came after Thursday's earnings-driven surge, and market commentators described Friday's move as profit-taking.

Thursday's Fireworks

On Thursday, October 1, Accenture shares rocketed to close at $212.30, in what was described as the company's best day ever.

The catalyst was its fiscal fourth-quarter report. Revenue came in at $18.68 billion, up from a year earlier and ahead of analysts' estimates. That beat powered Thursday's record session.

But the details were not perfect. Accenture's forward guidance was slightly below estimates, and its organic-growth outlook was described as measured. In other words, the quarter was strong, but the road ahead looked steady rather than spectacular.

Why Traders Took Profits

When a large, established stock jumps by an unusually big amount in one day, some investors seize the chance to lock in gains. Market commentators described Friday's decline in Accenture in exactly those terms, as profit-taking after Thursday's outsized rally.

Accenture's peers in research and IT services were also soft on the day. Gartner, the research and advisory firm, also fell, with no company-specific news found.

Accenture's drop is notable because it came on a day when technology stocks broadly rallied. Information technology was the second-best sector in the S&P 500, yet Accenture, which sits in that sector, was one of its biggest decliners, alongside hard-drive makers Seagate and Western Digital.

The Rest of the Market

The broader market had a good day. The September jobs report showed the US added just 29,000 jobs, far below the roughly 84,000 expected. Traders sharply cut the odds of another Federal Reserve rate hike in October, after the Fed's September 16 increase.

That lifted chipmakers and AI hardware stocks. Nvidia hit a record high during the session, Teradyne topped the S&P 500, and the Nasdaq-100 closed at a record 30,807.93. The S&P 500 rose 56.27 points to 7,722.72, and the Dow added 250.40 points to 51,176.96. Ten of the 11 S&P 500 sectors finished higher, with health care the only decliner, and the Nasdaq Composite touched an intraday all-time high before closing up 319.27 points at 27,190.86.

Accenture's Business is different from those chip names. It earns money by helping companies plan and carry out technology projects, including AI adoption. That makes it sensitive to how confident corporate clients feel about spending, which in turn depends on the health of the economy. A weak jobs report cuts both ways for a consultant: lower rates could help clients invest, but a slowing economy could make them cautious.

Watching Whether the Gains Hold

Investors will watch whether Accenture can hold most of Thursday's gains as the dust settles, and whether analysts adjust their targets after the results.

The Federal Reserve meets on October 27-28, and the outcome will shape corporate spending plans. Third-quarter Earnings season starts soon, with PepsiCo on October 8, Delta on October 9 and the big banks on October 13 and 14. Analysts expect strong double-digit earnings growth for the S&P 500, with 72 of 116 companies that offered guidance issuing positive outlooks. Comments from corporate leaders on technology and consulting budgets will be especially relevant for Accenture.