After Hours Summary: KEYS +7.5%, VEEV +7%, VRNT +1.7%, TLYS -11%, PVH -10%, PANW -5% following earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: KEYS +7.5%, VEEV +7.1%, VRNT +1.7%
Companies trading higher in after hours in reaction to news: UBX +3% (Unity Biotechnology and UC San Francisco enter exclusive license agreement relating to alpha-Klotho protein), VIAV +2.3% (disclosed that it adopted the Company's Executive Variable Pay Plan for fiscal year 2020), HUYA +1% (initiated with Buy and $26 tgt at BofA/Merrill)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: TLYS -11.2%, PVH -10.3%, DSGX -5.9% (ticking lower), PANW -4.9%
Companies trading lower in after hours in reaction to news: MYOV -8.5% (announces public offering of $100 mln of common shares), FOLD -6.6% (commences public offering of $150 mln of its common stock), SOLY -5.6% (after closing at new post-IPO highs), TWLO -3% (commences underwritten public offering of $750 mln of Class A common stock shares and files mixed securities shelf offering), MFA -1.9% (commences public offering of $200 mln convertible senior notes due 2024), ENPH -1.8% (announces offering of $120 mln of convertible senior notes due 2024 in private placement)
Closing Stock Market SummaryThe S&P 500 was down as much as 1.3% on Wednesday amid trade and growth concerns, while the advance in U.S. Treasuries helped widen a key inversion within the yield curve. A rebound in the last hour of action, however, helped the benchmark index finish lower by 0.7% and reclaim its 200-day moving average (2776) after falling below the key technical level during the day.
The Dow Jones Industrial Average (-0.9%), the Nasdaq Composite (-0.8%), and the Russell 2000 (-0.9%) also finished off their session lows.
No S&P 500 sector finished higher, but the materials (-0.1%) and financials (-0.1%) sectors did finish just below their unchanged marks. The utilities (-1.3%) and real estate (-1.2%) sectors underperformed.
Contributing to the day's lows were Chinese state media suggesting that Beijing could use its dominant position in rare earth minerals to restrict exports in a trade war against the U.S. Although it was not a new claim, investors continued to seek safety in Treasuries with few signs of trade progress.
At one point during the day, the 3-month yield was 14 basis points higher than the 10-yr yield, which was its biggest difference since the financial crisis and helped feed into the persisting growth concerns. This term spread, according to research from the Federal Reserve Bank of San Francisco, is the most reliable predictor of a recession among the different term spreads.
Demand for U.S. Treasuries did lose traction during the afternoon, though, bringing yields slightly higher from session lows. The 2-yr yield finished four basis points lower at 2.08%, and the 10-yr yield finished three basis points lower at 2.23%. The U.S. Dollar Index increased 0.2% to 98.16. WTI crude declined 0.5% to $58.84/bbl.
The SPDR S&P Retail EFT (XRT 40.50, -0.92, -2.2%) was a notable laggard in the stock market following poor results and guidance from Abercrombie & Fitch (ANF 18.39, -6.62, -26.5%) and Canada Goose (GOOS 33.89, -15.13, -30.9%). General growth concerns also helped overlook upbeat results and guidance from Dick's Sporting Goods (DKS 33.67, -2.11, -5.9%).
On the other hand, the beaten-up Philadelphia Semiconductor Index (+0.4%) found some reprieve on Wednesday. Shares of Cypress Semiconductor (CY 17.25, +1.85, +12.0%) outperformed on reports that the company is considering a sale in response to takeover interest.
Separately, the weekly MBA Mortgage Applications Index declined 3.3% following a 2.4% increase in the prior week.
Looking ahead, investors will receive Personal Income and Spending data for April, the PCE Price Index for April, and the final reading for the University of Michigan Index of Consumer Sentiment for May on Thursday.
- Nasdaq Composite +13.8% YTD
- S&P 500 +11.0% YTD
- Russell 2000 +10.5% YTD
- Dow Jones Industrial Average +7.7% YTD
Gapping down
In reaction to disappointing earnings/guidance:
- ANF -17.6%, GOOS -12.5%, CPRI -6.9%, BMO -1.4%, HMLP -1%, WDAY -0.9%, UAL -0.7% (guidance)
Other news:
- INO -16.6% (Inovio Pharma received notification from AstraZeneca's MedImmune of plans to discontinue research collaboration activities)
- SUI -2.2% (announces public offering of 3.25 mln shares of common stock)
- HLI -1.4% (announces public offering of 3.0 mln shares of common stock by ORIX HLHZ Holding)
- INVH -0.8% (pricing of secondary offering of 40 mln shares of common stock by certain selling stockholders affiliated with Blackstone (BX) at $25.30 per share)
- GMXAY -0.6% (Genmab A/S files SEC registration statement for proposed public offering of ADSs and applies for listing of the ADSs on the Nasdaq Global Select Market under the symbol "GMAB")
- SNE -0.5% (Australia's Australian Competition & Consumer Commission institutes proceedings against Sony Interactive for making false or misleading representations to Australian consumers on its website and in dealings with Australian customers of its PlayStation online store)
Analyst comments:
- NIO -0.7% (downgraded to Underperform from Neutral at BofA/Merrill)
Gapping up
In reaction to strong earnings/guidance:
- YY +6.4%, HEI +6%, RAMP +4%, NXGN +3.8%, DKS +3%
M&A news:
- S +1.3% (T-Mobile US and Sprint (S) are considering sale of Boost Mobile for up to $3 bln)
Other news:
- SOLY +33.6% (after closing the day up 150%)
- CARA +14.9% (positive results from KALM-1 pivotal Phase 3 trial of KORSUVA injection in hemodialysis patients with pruritus)
- UXIN +9.8% (private placement of convertible notes for $230 mln with affiliates of 58.com (WUBA), Warburg Pincus, TPG and certain other investors)
- PLUG +9% (announces new agreement with electric vehicle manufacturer StreetScooter)
- ZIOP +6.9% (enters into exclusive license agreement with National Cancer Institute for development of cell therapies for cancer)
- BLMN +5.1% (to join S&P SmallCap 600)
- BDSI +4.7% (announces debt refinancing)
- AMRN +4.2% (announces that its sNDA for Vascepa capsules has been accepted for filing and granted Priority Review designation by the FDA)
Analyst comments:
- N/A
Early premarket gappersGapping up:
- SOLY +26.6%, PLUG +12%, UXIN +9.8%, AMRN +8.7%, HEI +7.9%, YY +6.9%, ZIOP +6.6%, BLMN +5.8%, BDSI +4.7%, NXGN +3.8%, BZUN +1%, S +0.9%, MOMO +0.7%
Gapping down:
- INO -16.6%, GOOS -8.6%, CPRI -6.1%, SUI -2.6%, CHK -1.5%, BMO -1.4%, INVH -1.2%, WDAY -1%, GMXAY -0.6%, NIO -0.5%, SNE -0.5%
CMA opens inquiry into NSF’s bid to buy Provident
Competition watchdog sets late July deadline to decide on whether to launch in-depth probe
The UK’s competition regulator said on Wednesday it has opened an inquiry into Non-Standard Finance’s proposed hostile takeover of Provident Financial.
The Competition and Markets Authority said it would decide by July 23 on whether it will launch an in-depth “phase two” investigation into the proposed deal.
NSF has pushed ahead with its bid to acquire Provident despite only securing the support of 53.5 per cent of the rival subprime lender’s shareholders. The deal remains conditional on the support of the CMA, the Financial Conduct Authority and the Prudential Regulation Authority.
In March, the FCA warned NSF that it would take “immediate” action if its plans to merge with Provident led to an increase in unaffordable lending.
A spokesperson for Provident said: “Having waited until declaring the bid unconditional, they have put our shareholders in the impossible position of having to consider the transaction without knowing what the competition remedies and costs might be.”
NSF, a company set up by Provident’s former chief executive John van Kuffeler, acknowledged in a statement following the CMA announcement that the merger has the potential to substantially reduce competition for home loans in the UK, but indicated a possible solution was to divest of its “Loans at Home” home credit business.
Mr van Kuffeler said on Wednesday: “We remain confident in the merits of our offer and the benefits it will bring for Provident, its customers, employees and shareholders.”