After Hours Summary: President Biden signs multiple executive orders; AA -2.5%, UAL -2.4% trade lower on earnings; KMI +3.1%, PLXS +2.2% tick higher on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: KMI +3.1%, PLXS +2.2%, WTFC +0.1%
Companies trading higher in after hours in reaction to news: OCX +14.2% (announces registered direct offering of $25 mln), FTOC +3.7% (in talks to merge with online payments firm Payoneer, according to Bloomberg), OAC +2.4% (completes acquisition with Hims & Hers Health; HIMS to begin trading Jan 21), QGEN +1.1% (confirms that its tests work on the new COVID-19 strains; also plans to resubmit EUA for QIAreach SARS-CoV-2 Antigen test in the US in Q1), APT +0.8% (President Biden signs mask mandate on federal property, as expected), BA +0.6% (awarded $2.1 bln Air Force contract), SPNE +0.5% (announces limited commercial launch of Regatta Lateral Plate System), ILMN +0.4% (favorable patent ruling), BTG +0.2% (provides Q4 production update), WU +0.2% (says its money transfer platform will be integrated into one of the largest investment firms in S Korea), MSM +0.1% (will move from its branch office network to virtual customer care hubs to cut costs), RWT +0.1% (provides company update), PFE +0.1% (reaches vaccine deal with Japan, according to NikkeiAsia), NFLX +0.1% (will launch Shuffle Play feature worldwide in 1H21, according to Variety)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: STL -2.6%, AA -2.5%, UAL -2.4%, DFS -1.7%, DCBO -1.2% (guides Q4 revs slightly above consensus; also announces stock offering), UMPQ -0.6%
Companies trading lower in after hours in reaction to news: AWH -6.9% (files for $100 mln mixed securities shelf offering), INO -5.6% (stock offering), ONCS -4.7% (stock offering), VNET -4% (convertible notes offering), ORC -4% (stock offering), BSY -3.4% (convertible notes offering), NVTA -2.4% (stock offering), AQB -1.6% (files for $200 mln mixed securities shelf offering), LCTX -1.5% (CFO resigns), NEXT -1.2% (new CFO), SI -1.2% (stock offering), MTB -0.1% (authorizes $800 mln stock repurchase program), USO -0.1% (President Biden cancels Keystone pipeline permit, as expected)
Closing Stock Market SummaryEach of the major indices closed at fresh record highs on Wednesday in a session that featured the mega-caps as leaders and Joe Biden inaugurated as the 46th president. The Nasdaq Composite (+2.0%) outperformed with a 2% gain, followed by gains in the S&P 500 (+1.4%), Dow Jones Industrial Average (+0.8%) and Russell 2000 (+0.4%).
Shares of Apple (AAPL 132.03, +4.20, +3.3%), Microsoft (MSFT 224.34, +7.90, +3.7%), Amazon (AMZN 3263.38, +142.62, +4.5%), Alphabet (GOOG 1886.90, +96.04, +5.4%), and Facebook (FB 267.48, +6.38, +2.4%) gained between 2-5%. The Vanguard Mega Cap Growth ETF (MGK 207.13, +5.20, +2.6%) increased 2.6%.
Netflix (NFLX 586.34, +84.57, +16.9%) was credited as a supporting catalyst for the mega-cap rally, as shares surged 17% after the company provided bullish earnings results, guidance, and commentary. Notably, Netflix said it believes it no longer needs to raise external financing for day-to-day operations.
In turn, the S&P 500 communication services (+3.6%), consumer discretionary (+2.3%), and information technology (+2.0%) sectors claimed today's top spots.
Every other sector, except financials (-0.5%), as well as small-cap and mid-cap stocks contributed to the steady advance, albeit to a lesser extent. The financials sector was pressured by negative reactions to better-than-expected earnings reports from Morgan Stanley (MS 74.84, -0.15, -0.2%), U.S. Bancorp (USB 45.58, -2.49, -5.2%), and BNY Mellon (BK 42.49, -3.33, -7.3%).
Dow components UnitedHealth (UNH 350.84, -1.35, -0.4%) and Procter & Gamble (PG 131.93, -1.67, -1.3%) also closed lower despite beating EPS estimates, which factored into the relative underperformance of the Dow, versus the S&P 500 and Nasdaq.
U.S. Treasuries finished little changed in a tight-ranged session. The 2-yr yield decreased one basis point to 0.12%, and the 10-yr yield remained unchanged at 1.09%. The U.S. Dollar Index finished little changed at 90.46. WTI crude futures increased 0.6%, or $0.30, to $53.28/bbl.
Reviewing Wednesday's economic data, which were non-events:
- The NAHB Housing Market Index decreased to 83 in January (consensus 88) from 86 in December.
- The weekly MBA Mortgage Applications Index decreased 1.9% following a 16.7% spike in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, Housing Starts and Building Permits for December, and the Philadelphia Fed Index for January on Thursday.
- Russell 2000 +9.4% YTD
- Nasdaq Composite +4.4% YTD
- S&P 500 +2.6% YTD
- Dow Jones Industrial Average +1.9% YTD
Gapping down
In reaction to earnings/guidance:
- PERI -8.3% (guides Q4 EPS in-line, guides revs above consensus; also announces stock offering), JBHT -4%, UCBI -2.1%, FULT -1.4%, PUMP -1%, USB -1%, BK -0.8%, UNH -0.6%
Other news:
- GEVO -25% (prices offering of 43.75 mln shares of common stock at $8.00 per share)
- BNGO -20.1% (prices public offering of 33,333,350 shares of common stock at $6.00 per share)
- ACRX -8.9% (stock offering)
- MRUS -8.1% (stock offering)
- LAC -4.9% (stock offering)
- CTMX -4.6% (stock offering)
- CYRX -3.4% (stock offering)
- SYRS -2.3% (prices offering of 5.4 mln shares of common stock at $14.00 per share)
- FULC -2% (prices offering of 4 mln shares of common stock at $11.00 per share)
- CRSR -1.9% (stock offering)
- EDIT -1.9% (stock offering)
- CDNA -1.4% (stock offering)
Analyst comments:
- MIK -6.1% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
- BE -3.3% (downgraded to Neutral from Outperform at Credit Suisse)
- BYND -2.5% (downgraded to Neutral from Buy at BTIG Research)
- GSK -1.7% (downgraded to Underperform from Neutral at Credit Suisse)
- KR -1.4% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
- NVO -1.1% (downgraded to Neutral from Outperform at Credit Suisse)
- SWAV -1.1% (downgraded to Neutral from Overweight at Piper Sandler)
- ACI -0.7% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
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Portfolio Ticker Matches: SCANX
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Gapping up
In reaction to earnings/guidance:
- NFLX +14% (also global streaming paid net adds +8.51 mln vs prior guidance of +6.00 mln), PSO +6.3%, PNFP +3.8%, MUSA +3.3%, MS +1.5%, ZION +1.4%, CFG +1.3%, PG +1.3%
Other news:
- EVLO +13% (reports new positive confirmatory data from Phase 1b trial of EDP1815 in Atopic Dermatitis)
- EXPI +10.4% (2-for-1 stock split)
- SRNE +7.3% (to present data from ongoing SARS-CoV-2 mutation surveillance program)
- PCAR +5.3% (forms strategic partnership with Aurora for development of autonomous trucks)
- HSTM +3.5% (acquires ComplyALIGN)
- AN +3.4% (Mario Gabelli in CNBC interview out positive on AN based on valuation)
- DIS +2.4% (in sympathy with NFLX earnings)
- IDEX +2.1% (files for mln mixed securities shelf offering)
- ROKU +1.9% (in sympathy with NFLX earnings)
- BHP +1.9% (provides operational review for 2H20)
- TCRR +1.9% (prices offering of 4,590,164 shares of its common stock at $30.50 per share)
- EBAY +1.2% (exploring strategic alternatives for its Korea business)
- IAG +1.2% (reports FY20 production in-line with guidance; provides outlook for 2021)
- AG +1.2% (reports Q4 production increased 5% yr/yr)
Analyst comments:
- HAL +3.6% (upgraded to Overweight from Equal-Weight at Stephens)
- NS +2.5% (upgraded to Neutral from Underweight at JP Morgan)
- LITE +2.1% (upgraded to Buy from Neutral at Goldman)
- UFS +2% (upgraded to Buy from Neutral at BofA Securities)
- PII +2% (upgraded to Outperform from Market Perform at BMO Capital Markets)
- BA +0.8% (upgraded to Hold from Sell at Berenberg)