Closing Stock Market SummaryThe S&P 500 fell 1.3% on Monday, coughing up last Friday's rebound rally, amid noticeable weakness in the mega-cap stocks. The Nasdaq Composite was disproportionally affected with a 2.1% decline while the Dow Jones Industrial Average (-0.9%) and Russell 2000 (-1.1%) declined closer to 1.0%.
The major indices, except for the Nasdaq, started the session little changed, but it didn't take long for the mega-cap losses to trickle over to the broader market. The disappointing price action extended a recent trend of selling into strength amid unresolved issues on infrastructure, the debt ceiling, supply chain logistics, and raw material inflation.
The Vanguard Mega Cap Growth ETF (MGK 232.18, -5.33) fell 2.2% while the Invesco S&P 500 Equal Weight ETF (RSP 150.88, -0.96) declined 0.6%. Eight of the 11 S&P 500 sectors finished lower, led by the information technology (-2.4%) and communication services (-2.1%) sectors with losses over 2.0%.
Facebook (FB 326.23, -16.78, -4.9%) was the big loser amid claims from a whistleblower that the company prioritized profits over safety. The semiconductor space was another weak spot amid an observation from Marvell (MRVL 57.59, -2.24, -3.7%) that the semiconductor shortage could extend through 2022. The Philadelphia Semiconductor Index fell 2.5%.
The energy (+1.6%), utilities (+1.4%), and real estate (+0.1%) sectors bucked the negative trend. Energy stocks followed oil prices ($77.69/bbl, +1.82, +2.4%) higher after OPEC+ agreed to maintain its plan for gradual supply increases, which was expected.
Tesla (TSLA 781.53, +6.31, +0.8%) was spared from the mega-cap selling after the company reported a record number of deliveries (241,300 vehicles) in the third quarter.
In Washington, the House will reportedly delay its vote on the $1 trillion bipartisan infrastructure bill until a deal is reached on the larger reconciliation package. President Biden suggested the latter could be trimmed down to $1.9-2.3 trillion from $3.5 trillion. Separately, the USTR confirmed that current Chinese tariffs will remain in place.
U.S. Treasuries settled mostly lower, meaning yields rose modestly. The 10-yr yield increased two basis points to 1.48%, and the 2-yr yield increased one basis point to 0.27%. The U.S. Dollar Index decreased 0.3% to 93.78.
Monday's economic data was limited to Factory Orders for August, which increased 1.2% (consensus 1.0%) following an upwardly revised 0.7% increase (from +0.4%) in July. On Tuesday, investors will receive the ISM Non-Manufacturing Index for September, the Trade Balance for August, and the final IHS Markit Services PMI for September.
- S&P 500 +14.5% YTD
- Russell 2000 +12.4% YTD
- Nasdaq Composite +10.6% YTD
- Dow Jones Industrial Average +11.1% YTD
After Hours Summary: Pretty quiet after hours, but CMTL -11.3% falls on earnings; LUV +0.3% is latest airline to require all employees to be vaccinated; LULU +0.6% ticks higher on bump to its stock buyback planAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: NAPA +4.2%, EVRI +0.7% (tightens FY21 net income and adjusted EBITDA guidance to top of prior guidance range)
Companies trading higher in after hours in reaction to news: TISI +20.1% (awarded multi-year contract from Chevron), AGFY +14.5% (acquires Precision Extraction Solutions and Cascade Sciences for $50 mln in cash and stock), RYAM +4.4% (to increase prices for Cellulose Specialties products), SB +2.5% (enters into new period time charter for a duration of 3 years), XENE +2.1% (commences $250 mln common share offering; also files mixed securities shelf offering), ASXC +1.7% (announces upcoming departure of Boad Chair), CRMD +1.5% (CEO retires), LULU +0.6% (approves $500 mln increase to stock repurchase authorization), FB +0.4% (Facebook apps all go down simultaneously, according to NYT), LUV +0.3% (to require all employees to be vaccinated), ZETA +0.2% (to acquire technology platform and data from Apptness), SGMS +0.1% (awarded 10-year contract from the Pennsylvania Lottery), OEC +0.1% (to implement carbon dioxide surcharge for carbon black products manufactured in Europe)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: CMTL -11.3% (also promotes COO Michael Porcelain to CEO)
Companies trading lower in after hours in reaction to news: MGPI -6% (stock offering; also files mixed securities shelf offering), CALM -1.3% (announces strategic investment in new egg products manufacturing co), PCAR -0.9% (says chip shortage reduced its truck deliveries in Q3 by 7,000), HMN -0.1% (announces estimated Q3 pre-tax catastrophe losses), FDS -0.1% (names new CFO)
Gapping up
News:
- ADVM +10.6% ( Presents 2-Year OPTIC Data)
- OSUR +9.7% (receives $109 mln from DOD for InteliSwab COVID-19 Rapid Test)
- KCAC +7.3% (completes closing of business combination with Wall Box Chargers; will trade on NYSE under ticker "WBX" on Oct 4, 2021)
- PERI +6.4% (acquires Vidazoo; raises FY21 and FY22 guidance)
- XNCR +5.8% (enters global collaboration and license agreement with Janssen (JNJ) to advance plamotamab and xmab cd28 bispecific antibody combinations for the treatment of patients with B-cell malignancies)
- TSLA +2.9% (reports Q3 deliveries)
- ESTE +2.8% (announced that it has entered into definitive agreements to acquire privately held operated assets located in the Midland Basin)
- LYRA +2% (presents new Phase 2 LANTERN 6-Month Follow-Up and LYR-210 pharmacokinetic data)
- ADPT +1.3% (Presents New Data During IDWeek Demonstrating the Capability of Its Immune Medicine Platform to Distinguish Between SARS-CoV-2 Infection and Vaccine Response and Detect Lyme Disease)
- ARQQ +1.1% (files for 117,925,000 share common stock offering by selling shareholders)
- DHT +1% (purchased 1.23 mln of its own shares, or 0.7% of its outstanding shares, during Aug 12-23)
- MCRB +1% (Presents Late-Breaking Data from SER-109 Phase 3 ECOSPOR III Study in Recurrent C. Difficile Infection at IDWeek2021)
Analyst comments:
- DD +2.6% (upgraded to Overweight from Neutral at JP Morgan)
- LUV +1.6% (upgraded to Overweight from Equal Weight at Barclays)
- UNP +1.6% (upgraded to Overweight from Equal Weight at Barclays)
- SJI +1.3% (upgraded to Overweight from Equal Weight at Wells Fargo)
- ROP +1% (upgraded to Strong Buy from Outperform at Raymond James)
Early premarket gappers
- Gapping up:
- ARQQ +9.2%, ADVM +7.8%, KCAC +7.3%, PERI +5.8%, TSLA +2.8%, ESTE +2.8%, MCRB +1.8%, ADPT +1.3%, DHT +1%, AZN +0.6%
- Gapping down:
- AMPY -34.3%, IMNM -5%, PRTA -3.9%, CTIC -2.8%, PLTR -1.4%, XM -1.1%