FRC - Hot Stocks: EV selloff; PTON drops; FRC falls on forecast; NTNX jumps on takeover speculation

The major U.S. equity averages turned back towards the downside on Friday, retracing most of the gains posted in Thursday's unexpected rally. The Nasdaq led the slide, falling by more than 3%.

The risk-off trade led to a sharp decline in the electric vehicle sector. With earnings season about to ramp up, Tesla ( TSLA ), Rivian Automotive ( RIVN ), Nio ( NIO ), XPeng ( XPEV ) and Lucid Group ( LCID ) all finished notably lower.

The downbeat sentiment also spurred selling in Peloton ( PTON ), with a discrimination lawsuit from a former employee also contributing to a double-digit percentage slide. Meanwhile, the release of quarterly results prompted First Republic Bank ( NYSE: FRC ) to lose about a sixth of its value.

Looking to the upside, Nutanix ( NTNX ) expanded its value by about a quarter amid reports that it was looking for a potential buyer.

Sector In Focus

Electric vehicle stocks experienced steeper declines than the overall market, as a general risk-off trade disproportionately punished the sector. The slide also came ahead of an upcoming rush of earnings reports from key players in the sector.

Tesla ( TSLA ), which is slated to announce its results in the middle of next week, posted a decline of almost 8%. The retreat was even more pronounced in Rivian Automotive ( RIVN ), which fell almost 12%.

The downdraft also impacted Nio ( NIO ) and XPeng ( XPEV ), which both dropped about 8%. Lucid Group ( LCID ) declined by around 9%.

Standout Gainer

Nutanix ( NTNX ) experienced a wave of buying interest following reports that the company was considering a possible sale . Takeover chatter sent the stock higher by 25%.

According to the Wall Street Journal, the cloud-computing firm will look at both private-equity and strategic buyers, although there is no certainty that a deal will eventually come to pass.

NTNX closed the session at $26.35, an advance of $5.20 on the day. With the climb, the stock jumped above a recent trading range to record its highest close since April.

Even with the upswing, the stock remains 17% lower for 2022 as a whole.

Standout Decliner

Ending a news-heavy week for the exercise equipment maker, Peloton ( PTON ) dropped nearly 17%. With investors shedding higher-risk stocks during the session, PTON was spurred lower by news of a lawsuit filed by a former instructor.

One-time employee Daniel McKenna has sued the company for discrimination, asking the court to award him $1.8M in damages. The high-profile suit represented the latest headline in a turbulent year for the one-time pandemic darling, which has lost about 79% of its value since the end of last year.

For the session, PTON dropped $1.47 to close at $7.24. Still, shares remained off a 52-week low of $6.66 reached earlier this year.

Notable New Low

First Republic Bank ( FRC ) endured a massive selling spree following the release of its quarterly results , falling by 16%. The regional bank beat expectations with its Q3 results but warned that higher interest rates would impact funding costs, leading to a margin squeeze.

The firm's headline Q3 results were solid, including a 17% rise in revenue. The top-line figure totaled $1.57B.

However, net interest margin dropped to 2.71% compared to 2.8% for the prior quarter. Meanwhile, the firm said this figure could continue to trend down as the year rolls on.

"Given the increase in funding costs following the Fed’s recent rate hikes and additional rate hikes expected this year, we now expect to be at the lower end of our guided net interest margin range of 2.65% to 2.75% for the full year 2022," the firm's acting CFO told investors at the firm's post-earnings conference call .

Weighed down by this forecast, FRC slumped to an intraday 52-week low of $110.79. The stock trimmed its losses from there, although it still closed at $112.59, a decline of $22.14 on the day.

Friday's slide added a longer-term retreat. For 2022, the stock has fallen about 43%.

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