TheChek News Flow

After Hours Summary: SFIX -17.8%, S -10.5%, CASY -5.1% fall on earnings; PD +10.8%, PLAY +6.2% up on earnings; EPAM jumps +8.2% on being added to S&P 500

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: PD +10.8%, RELL +7.8%, PLAY +6.2%, FRG +5.6% (issues upside FY22 EPS and revenue guidance; also increases dividend), TOL +0.4%

Companies trading higher in after hours in reaction to news: DARE +39.4% (FDA approves XACIATO vaginal gel for bacterial vaginosis), EPAM +8.2% (to join S&P 500), NBIX +3% (announces positive top-line data from its Phase 3 KINECT-HD study), RFP +2.6% (approves $100 mln share repurchase program), HOOD +2.6% (announces termination of resale registration agreement), THO +2.5% (acquires Elkhart Composites), RTX +1.8% (approves $6 bln share repurchase program), WYNN +1% (names new CFO), AAPL +0.9% (iPhone and iPad assembly halted for several days, according to NikkeiAsia), RKLB +0.8% (signs deal with Synspective to carry out three dedicated Electron launches), SDC +0.6% (CFO resigns), FTI +0.5% (awarded "major 10-year framework agreement"), AVGO +0.5% (to acquire performance monitoring company AppNeta), CLNE +0.4% (will resume share repurchases; approves increase in amount from $30 mln to $50 mln), RWT +0.2% (increases dividend), MAA +0.1% (increases dividend), ONTO +0.1% (receives $85 mln in orders from a 3D NAND manufacturer), OHI +0.1% (files mixed securities shelf offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SFIX -17.8%, S -10.5%, CASY -5.1%, CHPT -5%, WEAV -4.5%, BASE -1.2%, AVAV -0.3%

Companies trading lower in after hours in reaction to news: VRRM -6.1% (stock offering), TTGT -5.6% (convertible notes offering), ET -3.7% (stock offering), ACET -3.4% (stock offering), STWD -2.4% (stock offering), ZTS -1.7% (approves $3.5 bln share repurchase program), TLMD -1.4% (files for $100 mln mixed securities shelf offering), WFG -0.8% (names new COO), CODX -0.7% (launches retail investor and perks program with TiiCKER), T -0.2% (provides shareholder update: expects growth in fiber subscribers, revs, and profits to continue in 2022), ADC -0.1% (names new CFO)

Closing Market Summary: Rebound Rally Accelerates

The major averages built on their gains from Monday with the S&P 500 (+2.1%) jumping to within 60 points of its record high from two weeks ago. The Nasdaq (+3.0%) outperformed after lagging yesterday while the Dow (+1.4%) finished behind the benchmark index after showing relative strength on Monday.

The bulk of the Tuesday rally unfolded at the open, as stocks jumped out of the gate after an upbeat session in global equity markets. The S&P 500 reached its best level of the session just after 11:00 ET, drifting just below that high into the close. The benchmark index finished at its best level since November 24 while the Dow and Nasdaq reclaimed their respective 50-day moving averages.

All eleven sectors ended in the green with nine groups recording gains of 1.0% or more. Top-weighted technology (+3.5%) held the lead throughout the day while energy (+2.3%) and consumer discretionary (+2.4%) finished in the next two spots.

The technology sector rallied behind chipmakers, as the PHLX Semiconductor Index rose 5.0%. Top component NVIDIA (NVDA 324.27, +23.90, +8.0%) was the best performer in the group while Intel (INTC 52.57, +1.58, +3.1%) rallied back above its 50-day moving average (51.33) after confirming plans for a spin-off of its Mobileye unit, which is valued at about $50 bln.

All but six components of the tech sector finished in the green while Western Union (WU 17.35, -0.50, -2.8%) was the weakest performer, giving back yesterday's gain.

Like technology, the energy sector spent the session near the top of the leaderboard thanks to a rally in crude oil, which rose $2.36, or 3.4%, to $71.95/bbl, climbing past its 200-day moving average (69.98). Oil backpedaled from its midday high after a brief push past last Monday's high (72.93).

The consumer discretionary sector was the only other group to gain 2.0% or more with leadership from AutoZone (AZO 2023.57, +143.58, +7.6%) after the company beat Q1 expectations. The stock rallied to a fresh record, as did seven other components of the discretionary sector.

The Dow Jones Transportation Average (+0.2%) was one of few soft spots today as airline stocks pulled back from yesterday's rally, masking gains in more than half of the remaining DJTA components.

In Washington, House Speaker Pelosi said that her chamber will vote today evening on a plan to increase the debt limit. Meanwhile, Senate Minority Leader McConnell said that a "solution" to the debt ceiling issue has been reached. President Biden spoke with Russian President Putin, warning that the U.S. and allies would "respond with strong economic and other measures in the event of military escalation" in Ukraine, according to a statement from the White House.

Treasuries retreated, sending the 10-yr yield higher by five basis points to 1.48% with its 200-day moving average (1.493%) looming just above.

Reviewing today's economic data:

• The October Trade Balance Report showed a narrowing in the deficit to $67.1 billion (onsensus -$66.8 billion) from a downwardly revised $81.4 billion (from $80.9 billion) in September, with exports up $16.8 billion and imports up $2.5 billion from September levels.
  • The key takeaway from the report is the uptick in both exports and imports, which is a good sign of increased economic activity on a global basis. Exports to China increased $2.8 billion and exports to the European Union increased $1.6 billion.
• The revised Q3 Productivity and Unit Labor Costs report showed productivity being revised down to -5.2% ( consensus -4.9%) from the advance estimate of -5.0%. That is the largest decline in productivity since the second quarter of 1960. Unit labor costs were revised up to 9.6% consensus 8.2%) from 8.3%.
  • The key takeaway from the report is the connection between weakening productivity and rising costs, which isn't a good combination for company profits.
• Consumer credit increased by $16.9 bln in October after increasing a downwardly revised $27.8 bln (from $29.9 bln) in September.

Tomorrow, the weekly MBA Mortgage Index (prior -7.2%) will be released at 7:00 ET, followed by JOLTS -- Job Openings (prior 10.438 mln) at 10:00 ET.

• S&P 500 +24.8% YTD
• Nasdaq Composite +21.7% YTD 
• Dow Jones Industrial Average +16.7% YTD
• Russell 2000 +14.1% YTD