After Hours Summary: GME +7.4% jumps on 4-for-1 stock split announcement; USNA -9.8% falls on weak guidance; VERU +18.9% extends move after hoursAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SLP +1.4%
Companies trading higher in after hours in reaction to news: VERU +18.9% (extends momentum from +13% move during regular session), GME +7.4% (announces 4-for-1 stock split), BBBY +5.8% (interim CEO purchases 50,000 shares), SPCE +4.7% (chooses BA unit to design and manufacture next generation motherships), CPG +2.1% (increases dividend), SHBI +1.7% (authorizes new $5 mln share repurchase program), GVA +1.3% (secures $55 mln for improvements to major Alaskan roadway), CWT +0.9% (receives approval from commission to acquire assets of HOH Utilities), RKLB +0.5% (introduces Responsive Space Program), BX +0.2% (invests $400 mln in Xpansiv)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: USNA -9.8% (guides Q2 EPS and revs below consensus; lowers its FY22 outlook), ABBV -0.1%
Companies trading lower in after hours in reaction to news: CTMX -26.9% (Phase 2 results for praluzatamab ravtansine), ATRA -6.1% (to announce completion of ATA188 Phase 2 EMBOLD Study interim analysis), NAPA -6% (files mixed securities shelf offering; also selling stockholder to offer 5 mln shares), CLVS -1.4% (FDA will require an advisory meeting is sNDA filed, which co intends to do in Q3), SBOW -1.3% (stock offering), OIS -0.2% (stock offering), WDFC -0.1% (names new CFO), CBOE -0.1% (reports June monthly trading volume)
Closing Stock Market SummaryThe stock market exhibited a bit of volatility today in the face of general growth concerns. The major indices were trading lower most of the day before closing with modest gains after a late session rally attempt.
The early going was marked by a lack of buyer conviction with declining issues leading advancing issues by an 11-to-5 margin at the NYSE and an 8-to-5 margin at the Nasdaq. Buyers stepped in some by the close, narrowing the spread of decliners to advancers to an 8-to-5 margin at the NYSE and a 6-to-5 margin at the Nasdaq.
The mega caps offered some support to the broader market. The Vanguard Mega Cap Growth ETF (MGK) closed up 0.6% versus a 0.4% gain in the S&P 500. The Invesco S&P 500 Equal Weight ETF (RSP) closed flat.
The top performing S&P 500 sectors today were utilities (+1.0%), information technology (+0.9%), health care (+0.7%), materials (+0.6%), and industrials (+0.6%).
The only three sectors to close in negative territory were consumer discretionary (-0.2%), financials (-0.3%), and energy (-1.7%) which lagged by a wide margin.
Energy futures mostly fell this session. WTI crude oil futures fell as low as $95.10/bbl before settling the session down 0.7% to $98.69/bbl. Unleaded gasoline futures closed near the intraday low, down 3.1% to $3.24/gal. Natural gas futures went against the grain, settling up 0.2% to $5.50/mmbtu.
Treasury yields saw some whipsaw action with the 2s10s spread remaining inverted. The 2-yr note yield settled up 12 basis points to 2.94%, after hitting 2.76% before the open, while the 10-yr note yield settled up ten basis points to 2.91% after scraping 2.74% before the open.
The U.S. Dollar Index closed up 0.5% to 107.06 as the euro continues to slip toward parity with the dollar (EUR/USD -0.8% to 1.0185).
The minutes for the June 14-15 FOMC meeting were released this afternoon. All in all, there was nothing surprising in the minutes, which conveyed the Fed's commitment to restoring price stability.
Reviewing today's economic data:
- Weekly MBA Mortgage Applications Index -5.4%; Prior 0.7%
- June IHS Markit Services PMI - Final 52.7; Prior 51.6
- June ISM Non-Manufacturing Index 55.3% (consensus 54.2%); Prior 55.9%
- The key takeaway from the June report is that business activity for the non-manufacturing sector was better than expected, although growth slowed for the third straight month as businesses continued to grapple with pricing pressures, supply chain issues, and labor supply constraints.
- May JOLTS - Job Openings 11.254 mln; Prior was revised to 11.681 mln from 11.400 mln
Looking ahead to Thursday, market participants will receive the weekly initial jobless claims (consensus 234,000; prior 231,000) and continuing claims (prior 1.328 million) as well as the May trade balance (consensus -$84.9 billion; prior -$87.1 billion) at 8:30 a.m. ET, the EIA natural gas inventories (prior +82 bcf) at 10:30 a.m. ET, and EIA crude oil inventories (prior -2.76 million) at 11:00 a.m. ET.
- Dow Jones Industrial Average: -14.6% YTD
- S&P 400: -19.8% YTD
- S&P 500: -19.3% YTD
- Russell 2000: -23.1% YTD
- Nasdaq Composite: -27.4% YTD
Research Calls
- Upgrades:
- A.O. Smith (AOS) upgraded to Buy from Neutral at Longbow; tgt $71
- Callon Petroleum (CPE) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt $75
- Centennial Resource Development (CDEV) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt $11
- Dun & Bradstreet (DNB) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $17
- Enanta Pharmaceuticals (ENTA) upgraded to Outperform from In-line at Evercore ISI; tgt $62
- Mercer Intl (MERC) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $19
- Rocket Companies (RKT) upgraded to Overweight from Equal Weight at Wells Fargo; tgt $10
- Sabre (SABR) upgraded to Buy from Underperform at BofA Securities; tgt $10
- Sempra Energy (SRE) upgraded to Buy from Neutral at Goldman; tgt raised to $167
- Downgrades:
- Azul S.A. (AZUL) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $7
- Continental Resources (CLR) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt raised to $80
- Coinbase Global (COIN) downgraded to Neutral from Overweight at Atlantic Equities; tgt lowered to $54
- Earthstone Energy (ESTE) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $21
- EOG Resources (EOG) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $150
- GOL Linhas Aereas Inteligentes S.A. (GOL) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $4
- Grocery Outlet (GO) downgraded to Neutral from Buy at DA Davidson; tgt raised to $43
- HCA (HCA) downgraded to Underperform from Market Perform at BMO Capital Markets; tgt lowered to $160
- Kornit Digital (KRNT) downgraded to Hold from Buy at Stifel; tgt lowered to $50
- Littelfuse (LFUS) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $269
- McKesson (MCK) downgraded to Hold from Buy at Argus
- Moelis (MC) downgraded to Neutral from Buy at UBS; tgt lowered to $40
- Pioneer Natural Resources (PXD) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt $290
- RingCentral (RNG) downgraded to Hold from Buy at Needham
- SAP SE (SAP) downgraded to Equal Weight from Overweight at Barclays
- Union Pacific (UNP) downgraded to Neutral from Positive at Susquehanna; tgt $235
- Universal Health (UHS) downgraded to Underperform from Market Perform at BMO Capital Markets; tgt lowered to $90
- Others:
- Abbott Labs (ABT) initiated with an Underperform at Wolfe Research; tgt $95
- BHP Group (BHP) assumed with a Neutral at Credit Suisse
- Boston Scientific (BSX) initiated with an Outperform at Wolfe Research; tgt $43
- Definitive Healthcare (DH) initiated with a Buy at Needham; tgt $30
- Fusion Pharmaceuticals (FUSN) initiated with an Outperform at William Blair
- Materion (MTRN) initiated with a Buy at CL King; tgt $95
- Medtronic (MDT) initiated with an Underperform at Wolfe Research; tgt $85
- POINT Biopharma (PNT) initiated with an Outperform at William Blair
- Portman Ridge Finance (PTMN) initiated with a Perform at Oppenheimer; tgt $26
- Rio Tinto (RIO) assumed with an Outperform at Credit Suisse
- Teleflex (TFX) initiated with an Outperform at Wolfe Research; tgt $300
Gapping down
In reaction to earnings/guidance:
- KRNT -23.5% (issues downside Q2 guidance), RADA -13.7% (guidance), UMC -2.6% (June sales)
Other news:
- DASH -7.6% (negative reaction to Amazon taking 2% stake in Just Eat Takeaway.com's US food delivery business GrubHub; to offer Prime members service for 1 year)
- HR -5% (Independent Proxy Advisory Firm Glass Lewis Recommends Healthcare Realty Trust Shareholders Vote for Proposed Transaction With Healthcare Trust of America)
- UBER -3.3% (negative reaction to Amazon taking 2% stake in Just Eat Takeaway.com's US food delivery business GrubHub; to offer Prime members service for 1 year)
- OIS -2.4% (names new COO)
- HIVE -1.8% (to delay annual filing of Form 40-F)
- FSP -1.7% (adopts a variable quarterly dividend policy)
- VMW -1.7% (AVGO's deal to acquire VMW will move forward after rival bidder failed to emerge according to Bloomberg)
- DNMR -1.6% (to submit Part II application for loan guarantee under US DOE loan guarantee program)
- RKLB -1.3% (next two launches will be responsive space missions for the U.S. govt)
- VSTO -1.3% (to acquire Irvine Calif.-based Fox Racing a global icon in performance motocross mountain bike and lifestyle gear for $540 mln + potential earnout)
- STAG -1% (names new CEO)
Analyst comments:
- AZUL -2.9% (downgraded to Underweight from Equal Weight at Barclays)