TheChek News Flow

After Hours Summary: SCS +1.4%, FDX -1.4% following earnings/guidance, MULE +5.2% / CRM -2.3% on M&A news

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: LAUR +4.4%, SCS +1.4%

Companies trading higher in after hours in reaction to news: PRTA +21.4% (Prothena announces a global collaboration with Celgene (CELG) for novel therapies for patients with neurodegenerative diseases), MULE +5.2% (MuleSoft will be acquired by Salesforce for an enterprise value of approx. $6.5 bln), SBBP +1.8% (ticking higher after USPTO issued second method of use patent for RECORLEV), AMD +1.4% (AMD releases technical assessment of CTS Labs Research; AMD is in the process of developing and staging the deployment of mitigations)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FDX -1.4%, RKDA -1.1%

Companies trading lower in after hours in reaction to news: VYGR -3.8% (indicated lower on block trade pricing), DBVT -3.5% (launches offering of $150.0 mln of new ordinary shares), TSLX -3.2% (launches public offering of 3.75 mln shares of common stock), CRM -2.3% (MuleSoft will be acquired by Salesforce for an enterprise value of approx. $6.5 bln), JWN -2.3% (Nordstrom's Special Committee terminates discussions with Nordstrom Family Group regarding potential going private transaction), ARNA -1.1% (to offer 7.5 mln shares of common stock in public offering), FB -0.6% (continued weakness), UPS -0.4% (following FDX results)

Closing Market Summary: Wall Street Trims Monday Losses Ahead of Fed Decision

Stocks reclaimed a small portion of Monday's decline in choppy trade on Tuesday as investors began gearing up for the Fed's latest policy directive, which will cross the wires on Wednesday afternoon. The S&P 500 advanced 0.2%, trimming its weekly loss to 1.3%, while the Nasdaq climbed 0.3%, and the Dow jumped 0.5%.

The technology sector remained a focal point on Tuesday after leading Monday's sell off, and, for the most part, sentiment within the sector shifted; around three quarters of S&P 500 tech names finished in the green. However, Facebook (FB 168.15, -4.41) was a notable laggard for the second straight session, losing 2.6%, following reports that the Federal Trade Commission (FTC) is investigating whether the company violated a 2011 settlement regarding data privacy when research firm Cambridge Analytica obtained the personal data of 50 million users without their consent.

The Cambridge Analytica incident, which was first reported over the weekend, has been met with cries for greater government regulation, and has prompted lawmakers on Capitol Hill to ask for hearings with CEOs from social media companies, including Twitter (TWTR 31.35, -3.63), which dropped 10.4% on Tuesday. Twitter was also dealing with reports that Israel is considering sanctions against the company for allegedly ignoring requests to remove content that supports terrorism.

Oracle (ORCL 47.05, -4.90) also weighed on the tech group, losing 9.4%, after its better-than-expected quarterly earnings were overshadowed by a disappointing pace of growth in its cloud computing business and the realization that a lower tax rate helped drive the positive earnings surprise.

In the end, the technology sector finished Tuesday flat, closing near the middle of the sector standings. In general, cyclical sectors outperformed their countercyclical peers. The top-performing sectors were consumer discretionary (+0.6%) and energy (+0.9%), while consumer staples (-0.3%), utilities (-0.5%), and telecom services (-1.0%) were the worst-performing groups.

The energy sector benefited from an increase in the price of crude oil; West Texas Intermediate crude futures climbed 2.2% to $63.42 per barrel, hitting a three-week high. Heightened tensions between Saudi Arabia and Iran helped underpin the commodity, as did projections for a decline in Venezuela production due to the country's ongoing economic crisis.

In the bond market, U.S. Treasuries sold off on Tuesday, pushing yields higher across the curve; the benchmark 10-yr yield climbed four basis points to 2.88%, while the 2-yr yield jumped five basis points to 2.34%, which is its highest level since September 2008.

Investors didn't have any economic data to digest on Tuesday, turning their attention to Wednesday's rate-hike decision instead. The market is all but certain that the Fed will vote to raise the Fed funds target range by 25 basis points on Wednesday, so the Fed's economic and rate-hike projections will be the real main event. The CME FedWatch Tool is currently pointing towards a total of three rate hikes this year--although the chances for a fourth hike are sitting at 39.9%.

Also of note, President Trump is reportedly planning to announce $60 billion worth of annual tariffs on Chinese imports at the end of the week. The tariffs, which were first reported last Wednesday, will target more than 100 products, which the president argues were developed using trade secrets from American companies.

• Nasdaq Composite: +6.7% YTD
• S&P 500: +1.6% YTD
• Dow Jones Industrial Average: unch YTD
• Russell 2000: +2.3% YTD

Gapping down
In reaction to disappointing earnings/guidance:

• AVGR -17.3%, ORCL -8.2%, PLCE -7.9%, LX -4.7%, ATTO -2.7%

M&A news:

• CE -2.4% (is abandoning its merger agreement with Blackstone's Rhodia Acetow business and that the two parties have withdrawn their notification of the proposed joint venture from the European Commission)

Other news:

• NOG -13.9% (sees Q1 production up 5-6%; raises FY18 production growth to +18-22%; commences an underwritten public offering of an aggregate value of $105 mln of shares of its common stock)
• GPI -9.6% (says Q1 earnings will be negatively affected by weak market conditions)
• PTI -9.2% (proposes public offering of 9 mln shares of common stock)
• GLYC -5.8% (to offer 4.5 mln shares of common stock in underwritten public offering)
• OPNT -2.1% (pulling back after 28% move higher in midday trade -- has filed amendment to prospectus dated November 7, 2017 to update the amount of shares eligible to sell to 20 mln; announced that Pres/CEO Roger Crystal will provide corporate overview at the Oppenheimer Annual Healthcare Conference, on March 21 at 1pm ET)
• XNCR -0.7% (to offer 5 mln shares of its common stock)

Analyst comments:

• CMC -1.7% (initiated with a Sell at Goldman)
• D -0.5% (downgraded to Neutral from Buy at BofA/Merrill)

Gapping up
In reaction to strong earnings/guidance:

• TKR +5.1%, HQY +1.9%

Other news:

• ARNA +35.2% (reports positive phase 2 results from the OASIS trial for etrasimod in patients with ulcerative colitis)
• CRME +12.1% (announces strategic transaction with Cipher Pharmaceuticals -- Cipher to acquire all outstanding shares of Cardiome, following a restructuring of Cardiome pursuant to a statutory plan of arrangement)
• FNJN +9.3% (received the $65 million payment due from Symantec; Halcyon Long Duration Recovery discloses 14.2% active stake)
• ELGX +8.2% (announces the first results from ENCORE, a pooled, global analysis of several prospective clinical trials and registries studying polymer endovascular aneurysm repair (Polymer EVAR) using Ovation Abdominal Stent Graft Systems)
• AMTX +6.5% (continuation of last week's move higher)
• KMPH +6.1% (announces that topline results from its ongoing pediatric and adolescent pharmacokinetic study suggest that following oral administration of its KP415 product candidate)
• BB +5.7% (BlackBerry and Microsoft partner to offer enterprises a solution that integrates BlackBerry's mobility/security with Microsoft's cloud/productivity products)
• APHB +3.2% (after announcing collaboration with the Western Sydney and the Westmead Institute for Medical Research based in Sydney, Australia)
• TRIL +2.6% (FDA Office of Orphan Products Development has granted an Orphan Drug Designation to TTI-621 for the treatment of cutaneous T-cell lymphoma)

Analyst comments:

• IIVI +2.2% (upgraded to Buy at B. Riley FBR)
• FCX +1.4% (initiated with a Buy at Goldman)
• CTRN +1.3% (upgraded to Buy from Neutral at MKM Partners)
• BHP +0.5% (upgraded to Neutral from Underperform at Exane BNP Paribas)

Early premarket gappers

Gapping up:

• ARNA +28.5%, FNJN +9.3%, ELGX +8.2%, MRNS +6.6%, BB +5.3%, TKR +5.1%, APHB +3.2%, HQY +1.9%, AMTX +0.9%

Gapping down:

• AVGR -17.3%, NOG -13%, GPI -9.6%, ORCL -8.8%, PTI -8.4%, PLCE -5.9%, GLYC -5.8%, ATTO -2.7%, OPNT -2.1%, CE -1.4%, ZS -1.4%, XNCR -0.7%, FB -0.6%