After Hours Summary: MAT +12%, F / GRUB +7%, AMZN +0.6%, SBUX +0.5%, ATEN -11.5%, PFPT -7.5%, INTC -7% among the many earnings/guidance moversAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: EHTH +12.5%, MAT +12%, PRO +7.7% (light volume), F +7.4%, GRUB +7.3%, SFLY +4.2%, SWN +3.7%, BJRI +2.8%, LOGM +2%, RSG +1.9% (light volume), CY +0.7%, AMZN +0.6%, SBUX +0.5%
Companies trading higher in after hours in reaction to news: SBBP +7% (presents new secondary endpoint results from the Phase 3 SONICS study of RECORLEV for the potential treatment of endogenous Cushing's syndrome), CNSL +4.4% (rebounding from 34% decline on earnings and dividend elimination news), TOCA +4.3% (initiated with a Overweight rating and $28 tgt at Cantor Fitzgerald), TEUM +4.1% (initiated with Outperform rating and $7 tgt at Oppenheimer), RBBN +4% (discloses binding mediator's proposal that resolves the six previously disclosed lawsuits between the Company and Metaswitch), ZAYO +3.7% (drifting higher in extended trading on light volume amid renewed M&A chatter), COG +3.1% / BLMN +2.6% (ticking higher ahead of earnings tomorrow), CRC +2.8% (after closing nearly 16% lower on the day), GM +2.1% / FCAU +1.2% (following F earnings/guidance), HAS +1% (following MAT results), HEXO +0.8% (initiated with Buy at Desjardins), CNC +0.6% (following CEO appearance on MadMoney)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ATEN -11.5%, PFPT -7.5%, FII -7.2% (light volume), INTC -7.1%, BEAT -5%, SGEN -4.5%, SIVB -3.8%, VCRA -3.6% (light volume), FTV -3.2% (light volume), ILMN -2.6%, MHK -1.9% (light volume)
Companies trading lower in after hours in reaction to news: INTU -5.2% (reports 7% increase in TurboTax Online units season-to-date; updates Consumer Group revenue guidance), ADNT -2.1% (priced private offering of $800 mln 7.00% senior first lien notes due 2026), WMT -1.4% / TGT -0.6% / etf- XRT -0.6% (pulling back following AMZN results and plans for Free Prime Two-Day shipping will evolve to Free Prime One-Day shipping this year), MRK -0.7% (announces topline findings from final analysis of Phase 3 KEYNOTE-062 trial evaluating KEYTRUDA in combination with chemotherapy for the first-line treatment of advanced gastric or gastroesophageal junction adenocarcinoma)
Intel (INTC -7%) earnings/disappointing guidance is pressuring semiconductor / chip names in extended trade (ETFs SMH -1.9%, SOXX -1.6%): ON -2.7%, MU -2.6%, NVDA -2.5%, WDC -2.4%, UCTT -2.1%,AMD -1.5%, MRVL -1.3%, STM -1.3%, QCOM -1%, LRCX -1%, AVGO -0.9%, ADI -0.9%
Closing Stock Market SummaryThe S&P 500 (-0.04%) finished fractionally lower on Thursday, although strong earnings reports from Facebook (FB 193.26, +10.68, +5.9%) and Microsoft (MSFT 129.15, +4.14, +3.3%) helped the broader market overcome early weakness stemming from 3M (MMM 190.72, -28.36, -13.0%) and other industrial stocks.
Gains in Facebook and Microsoft also helped the Nasdaq Composite increase 0.2%. The Dow Jones Industrial Average lost 0.5%, dragged lower by shares of 3M after it provided weak results and disappointing guidance. The Russell 2000 lost 0.8%.
The stock market began the day with several reminders about slowing growth overseas. South Korea reported a 0.3% qtr/qtr contraction in first quarter GDP; the Bank of Japan signaled rates will be kept at extremely low levels until at least the spring of 2020; and 3M attributed its poor results to slowing conditions in China and other end markets.
Slowing global growth, though, really hasn't deterred investors from U.S. stocks this year. The U.S. economy, after all, appears to remain in solid footing. The latest economic data today showed durable goods orders increase 2.7% m/m in March (Briefing.com consensus +0.9%).
At the same time, expectations that mega-cap companies will continue to post solid growth has helped renew their leadership. The strong earnings reports from Facebook and Microsoft, both of which included double-digit revenue growth, helped reinforce buying interest.
Strength in Facebook also contributed to the 1.1% gain the S&P 500 communication services sector. The health care sector (+1.1%) also outperformed, while the industrials sector (-2.0%) dragged on the market following a host of negative responses to earnings reports.
The 13% drop in 3M carried the most weight with shares of UPS (UPS 105.13, -9.30, -8.1%), Raytheon (RTN 177.37, -8.08, -4.4%), Rockwell Automation (ROK 176.22, -12.68, -6.7%), and Masco (MAS 37.50, -2.49, -6.2%) following suit.
Visa (V 161.02, -0.47, -0.3%), Tesla (TSLA 247.63, -11.03, -4.3%), Chipotle Mexican Grill (CMG 678.07, -31.68, -4.5%), and Xilinx (XLNX 115.86, -23.86, -17.1%) also fell following their results.
U.S. Treasuries finished slightly lower, pushing yields slightly higher. The 2-yr yield and the 10-yr yield increased one basis point each to 2.31% and 2.53%, respectively. The U.S. Dollar Index finished unchanged at 98.18. WTI crude lost 1.0% to $65.17/bbl.
Reviewing Thursday's economic data, which included Durable Goods Orders for March and the weekly Initial and Continuing Claims report:
- Durable goods orders for March increased 2.7% m/m (consensus +0.9%) while orders, excluding transportation, rose 0.4% m/m (consensus +0.3%).
- The key takeaway from the report is that orders for nondefense capital goods, excluding aircraft, jumped 1.3%. These orders are a proxy for business spending, so one can say that business spending accelerated in March in an encouraging fashion.
- Initial claims for the week ending April 20 increased by 37,000 to 230,000 (consensus 215,000). Continuing claims for the week ending April 13 increased by 1,000 to 1.655 million.
- The headline number for initial claims was disappointing, yet the silver lining -- and the key takeaway -- is that the four-week moving average of 206,00 for this series remains close to a 50-year low.
Looking ahead, investors will receive the advance estimate for first quarter GDP and the final reading for the University of Michigan Index of Consumer Sentiment for April on Friday.
- Nasdaq Composite +22.4% YTD
- Russell 2000 +16.8% YTD
- S&P 500 +16.7% YTD
- Dow Jones Industrial Average +13.4% YTD