Stocks closed slightly higher on Monday, with the Dow Jones Industrial Average (DJINDICES: ^DJI) and S&P 500 (SNPINDEX: ^GSPC) both up less than 0.1%.
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Today's stock market
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Shares of utility companies led the market higher as a weak report on durable goods lowered expectations for rising interest rates, and the Utilities Select SPDR ETF (NYSEMKT: XLU) gained 0.7%. Retail stocks continued rebounding from recent weakness, and the SPDR S&P Retail ETF (NYSEMKT: XRT) closed up 1.8%.
As for individual stocks, Avis Budget Group, Inc. (NASDAQ: CAR) rose sharply on news that the company will partner with Waymo, and Stratasys Ltd. (NASDAQ: SSYS) plunged on negative analyst comments.
Avis lands a valuable partner in mobility
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Shares of Avis Budget Group soared 14% after the company announced that it has signed an agreement with Alphabet's Waymo self-driving car unit. Under the multiyear deal, Avis will supply fleet support and maintenance for Waymo's early rider program in the Phoenix, Arizona area, including parking space for Waymo's self-driving cars and services such as cleaning, oil changes, tire changes, and other mechanical necessities.
Alphabet spun out Waymo as a separate, fully owned subsidiary last year with the charter to commercialize self-driving vehicles. The company has built a fleet of 100 self-driving Chrysler Pacific minivans that it is testing on public roads, and has announced it will grow that fleet to 600 vehicles this year to support its early rider program, a trial with volunteer riders in the Phoenix area.
"With members of the public using our growing fleet of self-driving cars, our vehicles need standard maintenance and cleaning so they're ready for our riders at any time of the day or night," said Waymo Chief Executive Officer John Krafcik. "Avis Budget Group is an ideal partner to provide fleet support and maintenance. With thousands of locations around the world, Avis Budget Group can help us bring our technology to more people, in more places."
Investors were excited by the news, as the comments about Avis' "thousands of locations" indicated that the arrangement has plenty of upside for growth in the future. Avis has much to offer in the future beyond just vehicle parking and maintenance, as well. The company seized leadership in the mobility space among car rental companies with its 2013 acquisition of car-sharing service Zipcar. The agreement with Waymo could open up an opportunity to make self-driving vehicles part of Avis' mobility offerings.
Stratasys gets a pessimistic review
The stock of 3D-printing specialist Stratasys plunged 11.7% following a downgrade by an analyst at Goldman Sachs. Shares were downgraded from neutral to sell with a $20 price target.
Shares of 3D-printing companies have been under pressure for a couple of years as growth in the highly competitive market has failed to meet expectations. In the first quarter of 2017, Stratasys reported a sales decline of 3% and a net loss of $0.26 per share.
Investors are also getting nervous about the entrance of HP, Inc. (NYSE: HPQ) into the market. Earlier this month, HP announced the launch of its 3D printers in Asia-Pacific, a region with a $6 trillion manufacturing sector. Analysts at Pacific Crest Securities concluded from discussions with company officials that HP is getting more traction with its offerings in the space than previously expected, and will be taking market share from Stratasys.
Although analysts can't always be counted on to give accurate predictions of long-term performance, Stratasys shares will likely be vulnerable to any negative evaluations until the company can get back on track with sales growth.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jim Crumly owns shares of GOOG and GOOGL. The Motley Fool owns shares of and recommends GOOG and GOOGL. The Motley Fool recommends Stratasys. The Motley Fool has a disclosure policy.