TheChek News Flow

Closing Stock Market Summary

The S&P 500 advanced 1.9% on Wednesday, as stocks rallied past another spike in oil prices amid hope surrounding the Russia-Ukraine conflict and a potentially less-hawkish Fed. WTI crude futures topped $110 per barrel ($110.72, +7.31, +7.1%). 

The Nasdaq Composite (+1.6%) and Dow Jones Industrial Average (+1.8%) both looked up to the benchmark index while the Russell 2000 outperformed with a 2.5% gain. 

All 11 S&P 500 sectors closed higher, and 29 of the 30 Dow components closed higher. The cyclical financials (+2.6%), energy (+2.2%), materials (+2.2%), and industrials (+2.2%) sectors each rose more than 2.0%, as did the information technology sector (+2.2%). The communication services sector (+0.7%) underperformed on a relative basis. 

The spike in oil prices was attributed to increased expectations for supply constraints after Russia continued its offensive in Ukraine, but the market might have suspected a near-term peak in prices, depending on the result of cease-fire talks scheduled for tomorrow. 

Equally as important to the trading narrative today was what Fed Chair Powell told the House Financial Services Committee in his semiannual report on monetary policy.

The Fed chair said the central bank would "proceed carefully" because of the geopolitical uncertainty and that he would support hiking rates by 25 basis points later this month. He went on to say, though, that a 50-bps hike is still possible in the future if inflation is higher as expected. 

On a related note, the Fed's Beige Book noted that economic activity expanded at a modest to moderate pace between mid-January and February 18. Some Districts reported a temporary weakening in demand in the hospitality sector due to increased COVID-19 cases.

Treasury yields rose double-digit basis points after a two-day plunge, illustrating how negative sentiment had gotten because of the geopolitical tensions. The 2-yr yield jumped 22 basis points to 1.52%, and the 10-yr yield jumped 16 basis points to 1.87%. The U.S. Dollar Index dipped 0.1% to 97.34. 

Other supportive factors included a better-than-expected ADP Employment Change report, which estimated 475,000 additions to private sector payrolls in February (consensus 350,000), and positive earnings news/reactions in salesforce.com (CRM 210.39, +1.50, +0.7%), Nordstrom (JWN 26.93, +7.39, +37.8%), Ross Stores (ROST 95.00, +5.45, +6.1%), and Hewlett Packard Enterprises (HPE 16.99, +1.68, +10.3%). 

Reviewing Wednesday's economic data:

• The ADP Employment Change report estimated that 475,000 jobs were added to private sector payrolls in February (B consensus 350,000). The increase in January was upwardly revised to 509,000 from -301,000.
• Weekly crude oil inventories decreased by 2.6 mln barrels after increasing by 4.5 mln barrels during the previous week.
• The weekly MBA Mortgage Applications Index decreased 0.7% following a 13.1% decline in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the ISM Non-Manufacturing Index for February, revised Q4 readings for Productivity and Unit Labor Costs, and Factory Orders for January on Thursday.

• Dow Jones Industrial Average -6.7% YTD
• S&P 500 -8.0% YTD
• Russell 2000 -8.3% YTD
• Nasdaq Composite -12.1% YTD

Gapping down
In reaction to earnings/guidance:

• AKA -22.6%, DIBS -17.7% (also names new CFO), CCXI -12.8%, FSLR -12.7%, INO -12%, PRPL -11%, VUZI -9.5%, ANF -8.6%, CELH -8.3%, WISH -4.4%, SRPT -4%, INSG -2.7% (also Ashish Sharma named CEO, Dan Mondor to become Exec. Chairman), CERT -2.4%, GO -1.5%

Other news:

• KPTI -27.2% (provides regulatory update for selinexor; receives feedback that top-line results from SIENDO study are unlikely to support sNDA approval)
• ERIC -14.7% (provides update on Deferred Prosecution Agreement; comments about the Iraq investigation)
• HOOK -14.3% (common stock offering and convertible preferred offering)
• DIBS -8% (hired Thomas Etergino as CFO )
• CARA -7.1% (files for $300 mln mixed securities shelf offering )
• ASTL -3.9% (receives TSX approval for intended normal course issuer bid)

Analyst comments:

• GOCO -24.1% (downgraded to Hold from Buy at Truist)
• CWH -2.4% (downgraded to Hold from Buy at Truist)
• AM -1.3% (downgraded to Underweight from Equal Weight at Barclays)

Gapping up
In reaction to earnings/guidance:

• JWN +30.2%, SOFI +15.4%, CDLX +12.7%, SGMS +11.4% (also to be rebranded as "Light & Wonder"; also expects to significantly de-lever; also authorizes $750 mln share buyback), ARLO +10.4%, DOMO +10.2% (also CEO Josh James steps down; names John Mellor as CEO), RGNX +9.6%, PLBY +9.4%, JAMF +8.6%, ZIP +8.6% (also announces $100 mln share repurchase authorization), ROST +6.3% (also authorizes $1.9 bln for share repurchases; increases dividend by 9%), HPE +5.6%, PETQ +4.9%, CRM +4%, PLUG +2.1%, LAC +2%, AMC +1.9%, WW +1.8%, JAZZ +1.8%, GRWG +1.1%

Other news:

• SNDX +12.1% (provides clinical update; enrollment remains on track for SNDX-5613 and axatilimab; topline data expected starting in 1H23)
• PLBY +9.4% (to delay 10-K filing)
• ADAG +8.4% (enters license agreement with Sanofi (SNY) to generate masked monoclonal and bispecific antibodies for development and commercialization by Sanofi)
• FLGC +7.7% (signed a distribution agreement with Florida-based Speedy Distribution )
• HARP +3.3% (receives FDA Fast Track Designation for HPN217)
• F +3.1% (plans Wednesday announcement about acceleration of ambitious Ford+ plan for growth and value creation)
• AMRX +2.3% (FDA approves BLA for filgrastim-ayow)
• SWX +2% (to separate out subsidiary Centuri Group )
• HAL +1.9% (opens oilfield specialty chemical manufacturing reaction facility in Saudi Arabia)
• HES +1.7% (increases dividend, updates Q1 and FY production costs, and reaffirms Q4 production guidance)
• XOM +1.5% (is planning a hydrogen production plant and one of the world's largest carbon capture and storage projects at its integrated refining and petrochemical site at Baytown, Texas)
• SNAP +1.2% (is halting advertising sales to all Russian and Belarusian entities)  

Analyst comments:

• DNA +4.2% (resumed with an Outperform at Cowen)
• AI +3.4% (upgraded to Neutral from Underweight at JP Morgan)
• ACVA +3% (upgraded to Overweight from Equal-Weight at Stephens)
• ZS +2.3% (upgraded to Buy from Underperform at Daiwa)

Early premarket gappers

• Gapping up:
  • JWN +33%, SOFI +15.2%, ARLO +13.4%, ADAG +13.1%, CDLX +12.7%, SNDX +12.1%, SGMS +11.4%, PLBY +10.2%, DOMO +10.2%, PLBY +10.2%, RGNX +9.6%, ZIP +9.4%, ROST +9.1%, HPE +5.1%, PETQ +4.9%, WW +4.4%, ANF +4.3%, CRM +3.9%, GRWG +3.3%, PLUG +3.2%, LAC +2.6%, JAZZ +2.5%, DLTR +2.4%, AMRX +2.3%, HAL +2.1%, HES +2.1%, SWX +2%, F +1.5%, XOM +1.4%, MPC +1.3%
• Gapping down:
  • KPTI -27.7%, AKA -22.7%, CERT -16.3%, FSLR -15.4%, HOOK -13.5%, CCXI -13.4%, VUZI -12.1%, CELH -11%, INO -10.5%, PRPL -8.4%, DIBS -8%, DIBS -8%, WISH -6.2%, CARA -5.6%, SRPT -4%, GO -3.4%, BGS -2.8%, FFIE -2.6%, DIN -1.8%, AMC -1.1%, BROS -1.1%

After Hours Summary: Busy earnings session, JWN +35.3%, SOFI +22%, SGMS +14.4%, CDLX +11.6%, ZIP +11.3% on upside; AKA -20.5%, CERT -15.7%, FSLR -13.9% on downside

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: JWN +35.3%, SOFI +22%, SGMS +14.4% (also to be rebranded as "Light & Wonder"; also expects to significantly de-lever; also authorizes $750 mln share buyback), CDLX +11.6%, ZIP +11.3% (also announces $100 mln share repurchase authorization), ARLO +10.8%, PLBY +10.8%, JAMF +10.1%, ROST +9.4% (also authorizes $1.9 bln for share repurchases; increases dividend by 9%), RGNX +7.9%, WW +7.2%, ORGO +6.2%, DOMO +5.1% (also CEO Josh James steps down; names John Mellor as CEO), PETQ +5%, RPAY +4.5%, CRM +3.8%, URBN +3.4%, HPE +2.3%, BROS +0.5%, PRCH +0.3%, SWX +0.1% (also to separate Centuri Group from company)

Companies trading higher in after hours in reaction to news: SNDX +18% (provides clinical update; enrollment remains on track for SNDX-5613 and axatilimab; topline data expected starting in 1H23), AMRX +2.3% (FDA approves BLA for filgrastim-ayow), DXCM +1.2% (FDA grants Breakthrough Device Designation for Dexcom CGM for hospital setting), MPC +0.6% (forms JV with Neste for Martinez renewable fuels project), HAL +0.2% (opens oilfield specialty chemical manufacturing reaction facility in Saudi Arabia), VVI +0.1% (promotes Derek Linde to COO), AMG +0.1% (files mixed securities shelf offering), MCO +0.1% (stock offering), PRI +0.1% (files mixed securities shelf offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: AKA -20.5%, CERT -15.7%, CCXI -14.6%, FSLR -13.9%, PTRA -13.7%, VUZI -10.8%, INO -10.2%, CELH -9.7%, INSG -6.5% (also Ashish Sharma named CEO, Dan Mondor to become Exec. Chairman), CARA -6.1% (also files for $300 mln mixed securities shelf offering), WISH -5.7%, SRPT -4.8%, PRPL -3.7%, GO -3.4%, BGS -2.4%, HCAT -2.1%, DIBS -1.8% (also names new CFO), PRTS -1.3%, GRWG -1.1%, AMC -0.8%, PLUG -0.2%

Companies trading lower in after hours in reaction to news: KPTI -22.1% (provides regulatory update for selinexor; receives feedback that top-line results from SIENDO study are unlikely to support sNDA approval), HOOK -18.3% (common stock offering and convertible preferred offering), ADV -5.3% (CEO retires), SCPL -0.6% (acquires mobile game developer Alictus), LECO -0.6% (acquires Kestra), AHT -0.4% (files for $300 mln mixed securities shelf offering)