Closing Stock Market SummaryThe S&P 500 decreased 0.1% on Friday, as the broad market struggled to gain traction after the benchmark index briefly slipped below the 3900 level in early action. The Nasdaq Composite (+0.8%) and Russell 2000 (+0.9%) reclaimed early losses and closed higher after underperforming yesterday, while the Dow Jones Industrial Average (-0.7%) underperformed in the red.
Like the major indices, sector performances were mixed: six S&P 500 sectors closed lower, while five closed higher. The communication services (+0.8%) and consumer discretionary (+0.8%) sectors finished as leaders amid some mega-cap support; conversely, the financials (-1.2%), real estate (-1.3%), industrials (-0.7%), and materials (-0.5%) sectors lagged.
Note, there was some weakness into the close, which coincided with a surge in trading volume related to quadruple witching-options expiration activity.
The financials sector underperformed after the Fed announced prior to the open that it will let the temporary Supplementary Leverage Ratio ("SLR") exemption expire on March 31. Since May 15, 2020, banks were permitted to exclude Treasuries in the calculation of their SLR.
The thinking was that banks might have to raise more capital if they don't offload more of their Treasury holdings and/or reduce buybacks. The news contributed to a profit-taking mindset, even as Treasury yields moved off lows following the announcement.
The 10-yr yield was trading at 1.68% pre-announcement, then rose to 1.74% before settling unchanged at 1.73%. The 2-yr yield decreased one basis point to 0.16%. The U.S. Dollar Index increased 0.1% to 91.96. WTI crude futures ($61.45/bbl, +1.45, +2.4%) rebounded 2%, trimming its weekly decline to 6%.
Facebook (FB 290.11, +11.49, +4.1%) was a key mover today with a 4% gain. The stock might have benefited from optimistic comments from CEO Mark Zuckerberg that Apple's (AAPL 119.99, -0.54, -0.5%) privacy rule changes could help Facebook. Separately, shares of FedEx (FDX 279.58, +16.07, +6.1%) rose 6% following its better-than-expected earnings report.
Visa (V 206.90, -13.76, -6.2%) and Nike (NKE 137.49, -5.68, -4.0%) were individual laggards that weighed on the Dow. Visa fell 6% after The Wall Street Journal reported the company is being investigated by the Department of Justice over its debit-card practices. Nike fell 4% after missing revenue estimates due to shipping disruptions.
Investors did not receive any economic data of note on Friday. Looking ahead, Existing Home Sales for February will be released on Monday.
- Russell 2000 +15.8% YTD
- Dow Jones Industrial Average +6.6% YTD
- S&P 500 +4.2% YTD
- Nasdaq Composite +2.5% YTD
Gapping down
In reaction to earnings/guidance:
- HIMS -7.9%, TWI -2.9%, NKE -2.7%
Other news:
- IDRA -63.1% (announces results from ILLUMINATE-301 trial; primary endpoint of ORR was not met)
- SKLZ -7.2% (prices offering of 32 mln shares of common stock at $24.00 per share)
- ROAD -6% (prices secondary offering by selling shareholders of 2 mln shares of common stock at $31.25 per share)
- MAX -4.1% (prices secondary offering by selling shareholders of 7 mln shares of common stock at $46.00 per share)
- ARRY -3.7% (prices offering of 31,054,971 shares of common stock at $28.00 per share)
- CB -3% (Hartford Financial: Chubb (CB) confirms preliminary proposal for The Hartford (HIG))
- TXRH -2.3% (announces passing of founder/CEO)
- EXR -2.2% (prices offering of 1.6 mln shares of common stock for gross proceeds of $207.7 mln)
- SLDB -2% (prices offering of 21,739,131 shares of its common stock at $5.75 per share)
- VTVT -1.4% (initiates study exploring the effects of TTP399 on ketone body formation; also files for $250 mln stock offering)
- NBEV -1.3% (stock offering)
Analyst comments:
- KMB -1.3% (downgraded to Underweight from Neutral at JP Morgan)
- BX -0.9% (downgraded to Perform from Outperform at Oppenheimer)
Gapping up
In reaction to earnings/guidance:
- MP +8.2%, ALTG +5.5%, FDX +4.7%, OLLI +4.7%, LAZR +2.4%, JOBS +1.6%, ERJ +1.5%, LX +1%
Other news:
- KNSA +7.7% (announces FDA approval of ARCALYST for recurrent pericarditis)
- TNXP +7.3% (announced that the U.S. Patent and Trademark Office issued U.S. Patent No. 10,946,027 to the Company on March 16, 2021)
- TRIL +5.1% (files mixed securities shelf offering)
- GPMT +4.9% (increases dividend)
- SRPT +4.2% (shares new results from ongoing study of SRP-9003)
- NCTY +4.2% (The9 Ltd's NBTC signed Bitcoin mining machine purchase agreement with Bitmain Technologies)
- AA +2.8% (announces new agreements with multiple power generators in Australia)
- WPRT +2.7% (announces co-investment agreement with Tier 1 injector manufacturing partner to expand China production footprint)
- LLNW +2.7% (announces actions to improve growth and profitability; announces workforce reduction)
- TGNA +2.5% (Standard General issues letter to the TEGNA board)
- ACM +2.2% (awarded U.S. Air Force infrastructure and facilities contract under $2 bln program)
- INCY +2.1% (announces results from Phase 3 DEVENT trial; study did not meet its primary endpoint)
- MED +1.8% (increases dividend)
- FOXA +1.4% (announces a new and expanded media rights agreement with the NFL)
Analyst comments:
- ENPH +3.9% (upgraded to Positive from Neutral at Susquehanna)
- F +3% (upgraded to Overweight from Equal Weight at Barclays)
- NAVI +2% (upgraded to Buy from Hold at Jefferies)
- EVOP +1.4% (upgraded to Buy from Neutral at Compass Point)
- KDP +1.3% (upgraded to Overweight from Neutral at JP Morgan)
- NGG +1% (upgraded to Buy from Hold at HSBC Securities)
Early premarket gappers
- Gapping up:
- KNSA +6.8%, NCTY +6.6%, MED +6.1%, TRIL +5.5%, ALTG +5.5%, LLNW +5.4%, SRPT +5.3%, GPMT +4.9%, MP +4.6%, LAZR +3.8%, FDX +3.5%, COWN +3.2%, AA +2.6%, TGNA +2.5%, LX +2.4%, OLLI +2.3%, FOXA +1.6%, INCY +1.1%, WPRT +1%, TSLA +0.8%, EGY +0.8%, AMZN +0.7%, INTC +0.7%
- Gapping down:
- IDRA -57%, SKLZ -6.9%, VTVT -6%, ROAD -4.8%, UK -3.4%, TWI -2.9%, ARRY -2.8%, NKE -2.6%, STEP -2.5%, EXR -2%, TXRH -1.5%, HIG -1.2%, SLDB -1.2%, WIMI -0.7%, NBEV -0.7%, CYCN -0.7%, VIAC -0.6%, BALY -0.6%
