Major European Markets Close Slightly Weak

By Katy Barnato

Carvana and two other stocks rallied on Monday after the news that they will join the S&P 500 this month.

• The online-car retailer, Irish building-materials supplier and ventilation contractor will enter the benchmark as part of its quarterly rebalancing, S&P Dow Jones Indices said late Friday.
• Carvana shares were up 12% in midday trading, setting an intraday record at about $450.
• Comfort Systems and CRH gained roughly 1% and 6% respectively.

The stocks may have further to run before they enter the S&P 500 on Dec. 22.

8.27%

That's how much the average stock has rallied this year from the news of its addition to the S&P 500 and its actual entry, according to Dow Jones Market Data.

Some stocks notched far greater gains: AppLovin and Robinhood, which both joined in September, jumped more than 20% in that period, as did Coinbase in May.

On Monday, other stocks also got a boost from the S&P rebalancing:

• Shares of and rallied on the news that they will join the S&P MidCap 400.
• Struggling will be deleted from that index and move to the S&P SmallCap 600, which is also set to join. Hawaiian shares were up 11% in midday trading, while Under Armour sold off.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

Paramount Skydance Corporation Class B (PSKY) is currently at $14.68, up $1.31 or 9.8%

• On pace for largest percent increase since Sept. 11, 2025, when it rose 15.55%
• Currently up three of the past five days
• Down 8.4% month-to-date
• Up 40.3% year-to-date; on pace for best year since 2013, when it rose 67.52%
• Down 85.37% from its all-time closing high of $100.34 on March 22, 2021
• Up 31.38% from 52 weeks ago (Dec. 9, 2024), when it closed at $11.17
• Down 25.62% from its 52-week closing high of $19.73 on Sept. 23, 2025
• Up 45.01% from its 52-week closing low of $10.12 on Aug. 11, 2025
• Traded as high as $14.76
• Up 10.4% at today's intraday high; largest intraday percent increase since Nov. 11, 2025, when it rose as much as 12.52%
• Best performer in the S&P 500 today
• 10th most active stock in the S&P 500 today

All data as of 12:39:30 PM ET

Source: Dow Jones Market Data, FactSet

The DAX is up 17.87 points or 0.07% today to 24046.01

• Up for three consecutive trading days
• Up 352.30 points or 1.49% over the last three trading days
• Largest three day point and percentage gain since Friday, Nov. 28, 2025
• Up nine of the past 11 trading days
• Off 2.30% from its record close of 24611.25 hit Thursday, Oct. 9, 2025
• Highest closing value since Wednesday, Nov. 12, 2025
• Off 2.30% from its 52-week high of 24611.25 hit Thursday, Oct. 9, 2025
• Up 22.24% from its 52-week low of 19670.88 hit Wednesday, April 9, 2025
• Rose 18.19% from 52 weeks ago
• Off 2.30% from its 2025 closing high of 24611.25 hit Thursday, Oct. 9, 2025
• Up 22.24% from its 2025 closing low of 19670.88 hit Wednesday, April 9, 2025
• Month-to-date it is up 0.88%
• Year-to-date it is up 4136.87 points or 20.78%

Source: Dow Jones Market Data, FactSet

The FTSE 100 Index is down 21.92 points or 0.23% today to 9645.09

• Down for two consecutive trading days
• Down 65.78 points or 0.68% over the last two trading days
• Largest two day point and percentage decline since Wednesday, Nov 19, 2025
• Down five of the past six trading days
• Off 2.69% from its record close of 9911.42 hit Wednesday, Nov. 12, 2025
• Up 52.18% since the pre-Brexit vote level of 6338.10 hit Thursday, June 23, 2016
• Lowest closing value since Tuesday, Nov. 25, 2025
• Off 2.69% from its 52-week high of 9911.42 hit Wednesday, Nov. 12, 2025
• Up 25.60% from its 52-week low of 7679.48 hit Wednesday, April 9, 2025
• Rose 15.48% from 52 weeks ago
• Off 2.69% from its 2025 closing high of 9911.42 hit Wednesday, Nov 12, 2025
• Up 25.60% from its 2025 closing low of 7679.48 hit Wednesday, April 9, 2025
• Month-to-date it is down 0.78%
• Year-to-date it is up 1472.07 points or 18.01%

Source: Dow Jones Market Data, FactSet

By Mackenzie Tatananni

Carvana headed for a record closing high Monday following confirmation that the stock would join the S&P 500 later this month, and as investors rallied around what they see as a clear winner in the used-car space.

The steep gains came on the heels of announcement Friday that Carvana would join the benchmark index as part of its quarterly rebalancing. The changes will go into effect on Dec. 22.

The stock reaction Monday came as no surprise to BofA Securities, which identified Carvana's potential inclusion in the index as its "top potential catalyst" for the shares as far back as June. Analyst Michael McGovern reiterated a Buy rating and lifted his price target to $455 from $385.

Shares surged 12% to $449, putting them on pace for an all-time closing high and the largest same-day percentage increase since a 17% jump in July, according to Dow Jones Market Data.

Shares have run up sharply in recent weeks, which McGovern sees as a direct result of positive third-party data on unit volumes, after the company's fourth-quarter guidance sparked concerns over a possible slowdown.

Carvana reported 156,000 units in the third quarter but guided to just 150,000 in the fourth quarter, while Wall Street is now eyeing 155,000 units, McGovern noted. He expects consumer demand to remain stable, in part fueled by share gains against CarMax, Carvana's next-closest rival in the used-car market.

Wall Street has evidently soured on CarMax, as shares have slumped 52% this year. McGovern, for one, expects Carvana to surpass CarMax in quarterly units sold "at some point in 2026."

Counting Monday's gains, shares have surged nearly 117% this year, outstripping a 16% gain for the S&P 500. CarMax, by comparison, has slumped 52%.

It's easy to be suspicious of the gains, considering Carvana was in the news earlier this year after famed short-seller Hindenburg Research dubbed it "a father-son accounting grift for the ages." The firm's allegations of accounting manipulation and lax underwriting caused shares to fall sharply over two trading sessions.

However, Carvana swiftly rejected the allegations, and many on Wall Street scrambled to defend the company. Even in the face of heightened scrutiny, Carvana continually has posted strong quarterly results, fueling further stock gains.

The higher price target reflects discounted cash flow, McGovern said on Monday. Although cyclicality remains a risk to Carvana's expected level of growth, the current trajectory of share gains versus a flat industry underscores its "idiosyncratic" potential.

He noted that Carvana "is also seeing tailwinds in its capital structure and potential for lower cost of capital, with recent credit rating upgrades and now S&P inclusion."

S&P Global raised its rating on Carvana's senior secured debt to BB- from B in August with a '3' recovery rating, signaling an expected "meaningful" recovery for debt holders if the company were to default.

The agency also raised its rating on Carvana's senior unsecured debt to 'B' from 'CCC+' with a '6' recovery rating, denoting an expectation of negligible recovery in the event of default, ranging from 0% to 10%.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

The FTSE MIB was flat on Monday in a muted session as investors stayed cautious ahead of a widely expected 25 bp Fed rate cut this week.

A pause would shock markets, shifting attention to potential dissents among increasingly divided policymakers.

Focus also turned to the ECB, with markets now assigning a small chance of a hike next year, after ECB hawk Isabel Schnabel said the next move could be an increase rather than a cut.

Italian financials gained, led by MPS (+4.36%) after a report that Consob found no evidence of a secret pact among its top shareholders to seize control of Mediobanca (+1.7%).

UniCredit and Intesa Sanpaolo rose 0.2%, while BPM added 2% and Unipol 1%.

Leonardo gained 2.1% amid the lack of progress on a Ukraine–Russia peace plan.

On the downside, autos fell, with Ferrari down 3.5% after a Morgan Stanley downgrade and Stellantis down 1.3%.

Utilities also slipped, including Enel (-0.1%), Snam (-1.1%) and Terna (-0.6%).