In this articleBOXINTCMARThe Intel logo is displayed outside of the Intel headquarters in Santa Clara, Calif.Justin Sullivan | Getty ImagesCheck out the companies making headlines in midday trading. Marriott — The hotel stock fell more than 3% after the company reported a revenue miss. Marriott did beat earnings estimates, however, with an adjusted 10 cents per share for the first quarter, 3 cents above Refinitiv consensus estimate.US Foods — The food distributor's stock fell more than 3% even after the company posted better-than-expected quarterly earnings and revenue. US Foods beat estimates by 7 cents with adjusted quarterly earnings of 12 cents per share amid lower expenses, according to Refinitiv.Ark Innovation — Shares of Cathie Wood's flagship ETF fell 4% around midday on Monday amid further selling pressure in innovation stocks. Her fund is now trading below its low of the year from February. Tesla fell 4.2% and Teladoc Health dropped 5.6%. Square and Roku fell 6.6% and 2.1%, respectively. DraftKings declined 5.2% and Zillow lost 3.8%.Simon Property Group — Shares of the mall operator rose about 1.7% on news that it and Authentic Brands are purchasing retailer Eddie Bauer from private equity firm Golden Gate Capital. Eddie Bauer will join several other brand names owned by the two companies, including Aeropostale, Forever 21 and Brooks Brothers.Box — The tech stock bounced 4.4% after activist investment firm Starboard Value said it would nominate more directors for Box's board. Box's current board said in a statement that it does not believe "the changes to the Board proposed by Starboard are warranted or in the best interests of all stockholders."Intel — Shares of the chipmaker dipped 2.1% after Atlantic Equities downgraded the stock to underweight. The research firm said in a note to clients that Intel's plan to expand its manufacturing base wouldn't help it fend off rival Advanced Micro Devices.Coty — The beauty stock fell nearly 9% after Coty's third-quarter results failed to top expectations. Coty's reported that it broke even on an adjusted earnings per share basis and generated $1.03 billion in revenue. Analysts surveyed by Refinitiv expected earnings of 1 cent per share on $1.03 billion in revenue. The company's revenue in the Americas was lower than expected, according to FactSet.– CNBC's Jesse Pound, Maggie Fitzgerald, and Yun Li contributed reporting.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today.
Check out the companies making headlines before the bell:Marriott (MAR) – Marriott earned an adjusted 10 cents per share for the first quarter, beating the 3 cent consensus estimate, with the hotel operator's revenue very slightly below forecasts. Marriott said it was seeing a rebound in demand as more people receive Covid-19 vaccinations. Shares fell 1.2% in premarket trading.Coty (COTY) – Coty reported a breakeven fiscal third quarter, matching analysts' estimates, with revenue in line with estimates as well. Sales were 3.3% below year-ago levels as European lockdowns muted demand for Coty's cosmetics. Energizer Holdings (ENR) – Energizer shares rose 1.7% in premarket action, after the company reported adjusted quarterly earnings of 77 cents per share compared with the 60 cent consensus estimate. Revenue also beat projections, and the maker of batteries and other household products raised its full-year forecast.US Foods (USFD) – The food distributor's stock was up 1% in the premarket, after it beat estimates by 7 cents with adjusted quarterly earnings of 12 cents per share. Revenue also topped estimates despite pandemic-related pressure on sales volume. The bottom line was helped by lower expenses.BioNTech (BNTX) – The drug maker beat estimates on both the top and bottom lines for the first quarter, helping its stock surge by 8.7% in premarket action. BioNTech also said there's no current evidence that points to the need to adapt its Covid-19 vaccine to emerging variants of the virus, although it is prepared to do so if necessary.Tyson Foods (TSN) – The beef and poultry producer earned an adjusted $1.34 per share for its fiscal second quarter, beating the $1.12 consensus estimate, with revenue also above forecasts. Tyson said it expects its chicken segment to continue to experience some pressure due to a challenging labor environment and severe winter weather. Viatris (VTRS) – Viatris shares added 2.6% premarket trading despite slightly lower-than-expected profit. Sales beat estimates and the healthcare company declared its first quarterly dividend of 11 cents per share. Viatris was created last year by a merger of Pfizer's Upjohn unit and generic drug maker Mylan.Freeport McMoran (FCX), Hecla Mining (HL), Southern Copper (SCCO) – These and other copper mining companies are getting a boost as copper prices hit record highs on tight supply and expectations of high demand. Freeport-McMoran rose 3.3% in the premarket, while Hecla jumped 3.6% and Southern Copper jumped 3.4%.Simon Property (SPG) – The mall operator and Authentic Brands are buying apparel retailer Eddie Bauer from private equity firm Golden Gate Capital for an undisclosed amount. Eddie Bauer will join several other well-known brand names owned by the two companies, including Aeropostale, Forever 21 and Brooks Brothers.AstraZeneca (AZN) — AstraZeneca may skip applying to the FDA for emergency use authorization for its Covid-19 vaccine, according to people familiar with the matter who spoke to the Wall Street Journal. It would instead focus on the more lengthy full-approval process.Box Inc. (BOX) – Activist investor Starboard Value is putting up a minority directors slate for the board of software company Box, according to a Bloomberg report. Starboard owns an 8% stake in Box, but does not feel that performance has improved sufficiently since it invested in 2019.Live Nation Entertainment (LYV) – Live Nation was upgraded to "buy" from "hold" at Jefferies, which said a 13% pullback has provided an attractive entry point for the concert and live event promoter. Jefferies calls Live Nation a "pure-play recovery" and long-term growth story, and the company's shares added 1.3% in premarket trading. Intel (INTC) – UK competition regulators have begun a formal inquiry into the proposed acquisition of Intel's flash memory and solid state hard drive businesses by South Korea's SK Hynix. Intel agreed to sell the units to Hynix in October for about $9 billion. Regulators want to determine if the transaction would lead to a substantial lessening of competition.
Traders on the floor of the New York Stock Exchange.Source: NYSEAfter April's disappointing jobs report, market focus will shift squarely to inflation in the week ahead.The tug-of-war over tech stocks will also continue to be a dominant force in the stock market, after Friday's bounce more than halved the week's losses in the S&P technology sector.The April employment report was extremely disappointing with just 266,000 jobs created, well below the 1 million expected. The Friday report cast doubt on the expectations of some investors that the Fed will move toward paring back its so-called quantitative easing bond purchases later this year.The thinking is if the inflation data appears hot when the consumer price index is reported Wednesday, it could ignite the debate about whether the Fed will have to tighten policy sooner than it would like. For now, the market is viewing the April jobs data as a distorted one-off report."It's all about the inflation numbers. It's all about the transitory nature and to what extent we'll see it," said Peter Boockvar, chief investment officer at Bleakley Advisory Group "It's more relevant to the CPI month-over-month changes. If the month-over-month gains are starting to pick up steam, and we're seeing 0.3% to 0.4%, that's not transitory and that's a problem for the Fed."Economists expect April CPI to rise 0.2% over March, after a gain of 0.6% the month earlier. But on a year-over-year basis, CPI is expected to look sizzling, jumping 3.6%, according to Dow Jones. That compares to 2.6% the month earlier. Excluding food and fuel, CPI is expected to rise by 0.3% on a month-over-month basis.Zoom In IconArrows pointing outwardsThe central bank has maintained that the pop in inflation is expected to be transitory. Multiple Fed speakers are on the calendar, including Vice Chairman Richard Clarida, who speaks a half-hour after the CPI print Wednesday. Other officials speaking include Federal Reserve Board Governor Lael Brainard, New York President John Williams and Dallas Fed President Rob Kaplan.The producer price index is reported Thursday, and that should confirm a trend of higher prices that is showing up in corporate earnings releases. Another important data point, retail sales is released Friday. Boockvar said the retail sales report is not as important since it has been artificially boosted by one-time stimulus checks."It's like the steroid era of baseball," he said. "Who knows how many home runs it would have hit without stimulus."Tech battlegroundThe S&P 500 and Dow finished the past week with gains. The S&P rose 1.2% to 4,232, and 2.7% to 34,777. But the technology-laden Nasdaq fell about 1.5% to 13,752, even with Friday's 0.9% gain.Zoom In IconArrows pointing outwardsIn the commodities market, fears of inflation continued to build. Copper futures hit a record high, as did lumber futures, rising 13% in the past week. Corn futures rose 8.6% in the past week, finishing at the highest level since 2013.West Texas Intermediate crude futures gained 2% to $64.90 per barrel.The 10-year note yield, which moves opposite price, was at 1.55%, down from 1.63% a week ago.Commodities fueled gains in the stock market this week, with the S&P energy sector by far the best performer, up 8.9%. Materials rose 5.9%, followed by financials, which were up 4.2%. Industrials gained 3.4%. But the S&P technology sector slumped 0.5%, for the week even with a 0.8% gain Friday."I think one thing that people are overlooking is that the technology selling we've seen in the last few days...is not just the reaction to the adverse earnings price reactions that we saw from certain tech names," said Julian Emanuel, chief equity and derivatives strategist at BTIG. "But it's also this idea in that in a world where we assume capital gains taxes could go up, that's where the capital gains lie," he added. "So they are likely to come under incrementally more pressure on that basis."President Joe Biden has proposed raising capital gains taxes to 39.6% for taxpayers making more than $1 million. That's up from the current top rate of 20%.Emanuel said the upcoming federal income tax return filing date of May 17 could also be adding pressure to technology, since investors may be selling winners to pay their taxes. "With the tax bill coming due on May 17 for the 2020 calendar year, people are just going to use it as an excuse within the context of higher capital gains taxes to sell those stocks to pay for their tax bill," Emanuel said. "I think people are overlooking this as part of the reason."Boockvar said tech names could also face further headwinds from higher interest rates, particularly if inflation data is hotter than expected."I think the last couple of weeks tells you froth is coming out of the most expensive part of tech and earnings for the big cap names are as good as it gets in terms of growth rates. The market is telling you that," he said. "If you get a further move in rates, that's a headwind."Earnings season continues in the week ahead though most of the rush is over for the quarter. Disney, Marriott, Wynn Resorts, Airbnb are among the companies reporting that should provide insight on the economic reopening.Week ahead calendarMondayEarnings: Marriott, BioNTech, Jacobs Engineering, Simon Property Group, International Flavors and Fragrances, Wynn Resorts, SmileDirectClub, Duke Energy, Air Products, Tyson Foods, Party City, Energizer, CotyTuesdayEarnings: Electronic Arts, Chesapeake Energy, Hanesbrands, Aramark, International Game Technology, Palantir Technologies, Perrigo, Unity Software, Opendoor Technologies, Kinross Gold, Lemonade, Vizio6:00 a.m. NFIB survey10:00 a.m. JOLTS10:30 a.m. New York Fed President John Williams12:00 p.m. Fed Governor Lael Brainard1:00 p.m. San Francisco Fed President Mary Daly1:15 p.m. Atlanta Fed President Raphael Bostic2:00 p.m. Philadelphia Fed President Patrick HarkerWednesdayEarnings: Toyota, Wendy's, Fossil, Bumble, Allianz, Jack in the Box, Vroom, SoftBank, Sonos, Bayer, 1Life Healthcare8:30 a.m. CPI9:00 a.m. Fed Vice Chair Richard Clarida2:00 p.m. Fed budget1:00 p.m. Atlanta Fed's Bostic1:30 p.m. Philadelphia Fed's HarkerThursdayEarnings: Walt Disney, Airbnb, Plantronics, Burberry, Casper Sleep, Brookfield Asset Management, Door Dash, Petrobras, Aurora Cannabis, Alibaba8:30 a.m. Initial jobless claims8:30 a.m. PPI1:00 p.m. Fed Governor Christopher Waller4:00 p.m. St. Louis Fed President James BullardFridayEarnings: Honda, Rosneft8:30 a.m. Retail sales8:30 a.m. Import prices9:15 a.m. Industrial production10:00 a.m. Consumer sentiment10:00 a.m. Business inventories1:00 p.m. Dallas Fed President Robert Kaplan
A help wanted sign is posted at a taco stand in Solana Beach, California.Mike Blake | ReutersThe much weaker than expected April jobs report reinforces the Federal Reserve's easy policy stance, but some strategists still expect the central bank to signal in the next couple of months that it will slow down its bond buying.Economists had expected to see 1 million new jobs last month, so the government's report of just 266,000 was a gut punch to the view that the economy is rebounding in a smooth upward trajectory. The anticipation for a big jobs number also had put the spotlight on the Fed's easing programs.Stock futures rose and Treasury yields immediately fell after the report. But the 10-year Treasury yield, after falling to about 1.49% turned around to trade at 1.55%. The 5-year also fell but stayed near its low. Yields move opposite bond prices. In afternoon trading, stocks remained higher with the Dow up about 160 points."I'm wondering if bonds are selling off a little as it just reinforces [Fed Chair Jerome] Powell wanting to be patient," said John Briggs, head of global strategy at NatWest Markets. "But if you're like me, waiting for the Fed to taper, I think the Fed is going to start talking about it in September. That means the market is going to be talking about it in the summer."Economists said the May jobs report will provide more information on the state of hiring, which could have been slowed by bottlenecks showing up in supply chains. For instance, auto workers have been idled due to the shortage of semiconductors needed to build automobiles. There is also an acute shortage of workers in some areas and industries. Economists also see closed schools as an issue, keeping parents from the workforce. To some extent, expanded unemployment benefits may also be a factor."If one is thinking about the evident labor shortages being inflationary, that should push the 5-year yield up," said Michael Schumacher, Wells Fargo rates director. "But the other side is if you consider the chance of the Fed tapering, that's been pushed back slightly. Not much in my opinion, but people might take that view."Schumacher said he still expects the Fed to discuss trimming its purchases of about $120 billion a month in Treasurys and mortgage securities.Fed Chairman Jerome Powell has knocked the idea that the Fed will begin discussing an unwind any time soon. But some strategists still expect the Fed to be forced into slowing the purchases and ultimately ending them due to the strength of the economic recovery and the specter of inflation.A step toward ending the bond-buying program would ultimately be a step toward raising interest rates, which the Fed is not expected to do any time soon. Powell has said the Fed would complete the slow wind down of its bond purchases before raising interest rates."If you're an economy bull, you say this is probably an aberration. ... The bears can say you're losing momentum. Either are possible until you get another month," Briggs said, noting the next report could show a large amount of hiring. "When was the last time you reopened an economy in a pandemic? Where are your seasonal factors for that?"He said the bond market is also reacting to the potential for more fiscal stimulus, highlighted by the White House after the weak number."It's as simple as this — a drop in rates, let's buy tech," said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. "The stock market can't decide whether it wants to celebrate the drop in yields and maybe a Fed that's not going to taper so quickly but at the same time, we're early stage in the recovery but we're seeing a lot of late stage behavior like supply demand getting hot ... this overheating."Jan Hatzius, chief economist at Goldman Sachs, said the bond market reversal appears to have come as traders looked at the inconsistencies and decided the number was distorted. "That was my view as well," he said on CNBC. Hatzius said the weak jobs report does not change his view that the Fed will taper its bond purchases starting next year and then raise interest rates in 2024."I'm not sure having one dud report changes the calculation too much," said Schumacher. "I suspect the forecast range will be astronomical next month."The unemployment rate rose in April to 6.1% from 6%. The bulk of hiring was in the leisure and hospitality sector, which added 331,000 jobs as pandemic restrictions on restaurants eased.Average hourly wages rose by 21 cents to $30.17 in April, and economists note that strong hiring of workers in the hospitality industry typically makes overall wage numbers go down."This is a devastating disappointment, more than just seasonal problems. We had declines in everything from professional services to manufacturing and even couriers and transportation," said Diane Swonk, chief economist at Grant Thornton. "Turning on the lights in the economy is harder than turning them off."Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today.
The Roku 3 television streaming player menu is shown on a television in Los Angeles, California, U.S., on Thursday, Sept. 12, 2013.Patrick T. Fallon | Bloomberg via Getty ImagesCheck out the companies making headlines in midday trading. Square – The payment company's stock rose more than 6% after the company's first-quarter earnings topped Wall Street's expectations. Square earned 41 cents per share on an adjusted basis, while posting $5.06 billion in revenue. Analysts surveyed by Refinitiv were expecting the company to earn 16 cents on $3.36 billion in revenue. Revenue grew 266% year over year. Peloton – Shares of Peloton advanced about 1% around midday after the company said sales grew 141% during the fiscal third quarter. The company also reported a smaller-than-expected loss during the period. Shares of the company are still down about 14% for the week after Peloton announced a recall of both models of its treadmills, and also said it would delay the May launch in the U.S. of its less expensive treadmill to add safety features.Roku – Shares of the streaming video platform jumped about 11% after Roku reported that revenue growth grew 79% year over year to $574.2 million, more than $50 million above what analysts surveyed by FactSet had projected. The company also added 2.4 million active accounts compared to the prior quarter. Roku's second-quarter revenue guidance also topped expectations.Shake Shack – Shares of the fast food chain slid nearly 13% after the company reported a revenue miss and gave a tepid current quarter sales outlook. Shake Shack said sales in city locations and sports stadiums continue to weigh on overall results. However, the company reported an adjusted quarterly profit of 4 cents per share, compared to Refinitiv consensus of a 9 cents per share loss. Bill.com – Shares of the provider of back office enterprise software surged 15% after the company posted a narrower loss and better-than-expected sales for its latest quarter. Bill.com also announced the acquisition of expense management software provider Divvy for $2.5 billion.Expedia — The travel platform's stock jumped more than 7% after it reported better-than-expected quarter results. Expedia reported a first-quarter adjusted loss of $2.02 per share on revenues of $1.25 billion. Analysts had expected a loss per share of $2.31 on revenues of $1.12 billion, according to Refinitiv.AMC Entertainment – The movie theater chain's stock jumped more than 4% despite a wider-than-expected quarterly loss and an earnings miss. AMC lost $1.42 per share for the first quarter, wider than the loss of $1.30 a share that analysts were anticipating, according to Refinitiv. While AMC is still losing money, CEO Adam Aron was upbeat during an earnings call, thanking millions of Redditors and Robinhood traders who boosted the company's stock earlier this year. The stock is up about 340% in 2021.– CNBC's Pippa Stevens and Jesse Pound contributed reporting.Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
If you are thinking about buying shares of Microsoft Corp., or already own them, you need to understand key metrics and issues related to the company. The numbers, below, show how Microsoft
stacks up against competitors, and where its strengths and weaknesses lie. Keep in mind that no two companies are alike — even rivals don’t compete in every space. Investors need to do their own research to make informed long-term decisions.
Key dynamics Since Satya Nadella took over as CEO in February 2014 and dramatically changed the direction of this software giant co-founded by Bill Gates, Microsoft has become a key player in cloud computing. That move has paid off handsomely for investors. The stock is up 680% since then, including dividends, more than four times that of the S&P 500 Index
There may be more outperformance ahead for the stock because growth remains so robust, despite the size of this company. Microsoft has a $1.9 trillion market capitalization. Often companies of this size have a hard time posting fast growth simply because they are so large. Yet this 46-year-old software company put up 16.7% sales growth in the fourth quarter. Microsoft’s server products and cloud offerings, a $41.4 billion business last year, grew 25.8% in the fourth quarter. The hottest product line is Azure cloud services. Customers like Azure because it helps them become more productive and competitive. So, they will continue to join up, and expand their usage once they sign on. “We are witnessing the dawn of a second wave of digital transformation sweeping every company and every industry,” Nadella has said. Already at $29 billion a year, Azure sales are growing 50% annually, estimates Goldman Sachs analyst Kash Rangan. (Microsoft does not break out the numbers or offer projections for Azure.) Microsoft also offers artificial intelligence software; Microsoft Office suite products like Word, XL and Outlook; popular video-game hardware; the LinkedIn professional networking site; and, of course, Windows. You can see that four of those business lines are growing at 10% or more, but Windows and search are sluggish.
Geographic reach Microsoft does half its business outside the U.S. This is good for investors because during times of robust, synchronized global growth like we see now, emerging economies tend to grow much faster than the U.S. “We are investing to bring our cloud services to more customers announcing seven new data center regions in Asia, Europe and Latin America,” Nadella has announced. A vulnerability is that a stronger dollar would hurt Microsoft, since this would reduce the value of foreign earnings as they get exchanged for greenbacks.
Profitability Overall, Microsoft isn’t growing as fast as many of its competitors. But the popularity of its cloud products and services supports superior profit margins. For investors, this makes up for the relatively slower sales growth. “Microsoft has pulled ahead of the pack with a state-of-the-art cloud platform,” says J.P. Morgan analyst Mark Murphy.
Cash and cash flow Companies with lots of cash and solid cash flow have an edge because this helps them avoid the need to rely on banks for dilutive capital raises. It puts them in control of their own destinies. Microsoft uses its cash to buy back stock and pay a 0.87% dividend yield. But it’s also tapping the $132 billion cash hoard to grow through acquisitions. For example, Microsoft recently announced the purchase of Nuance Communications, which gives Microsoft solid inroads into the health-care sector. Nuance offers artificial intelligence (AI) used in the sector to analyze conversations and help providers communicate with patients. The risk is that Microsoft might make bad acquisitions and squander cash, which might otherwise have been better used by returning it to shareholders. As examples, Microsoft blundered in its purchases of Nokia’s mobile-phone business and the digital-marketing-services company aQuantive. This is why many investors prefer that companies simply return cash to shareholders via dividends and buybacks, rather than risk wasting it.
Moat Investing great Warren Buffett loves companies with protective moats. Moats create pricing power and make it hard for competitors to win over customers. Microsoft enjoys a wide moat for the following reasons, says Dan Romanoff at Morningstar, which, like Buffett, puts a big emphasis on moats when analyzing companies. First, a lot of Microsoft business software requires a fairly steep learning curve, so customers get locked into products. Besides, swapping out software is disruptive to a business. This creates switching costs. Next, Microsoft products and services benefit from network effects. As more people use Azure, Microsoft Office, LinkedIn and so forth, these offerings become more valuable to everyone because they connect more people together. Network effects create value for customers, discouraging them from jumping ship.Stock valuation and performance Microsoft stock has outperformed the shares of several competitors over the past five years, but it still has a relatively low price-to-earnings (P/E) ratio compared to them. Keep in mind that relatively new companies like CrowdStrike
can have deceptively high P/E ratios because they are still reinvesting a lot into their own businesses, diverting cash away from earnings per share.
Wall Street’s opinion Here’s a summary of opinion among Wall Street analysts polled by FactSet:
April 27 — Microsoft reports first-quarter earnings.
May 19 — Ex-dividend date.
July 20 — Microsoft reports second-quarter earnings. With reporting by Philip van Doorn. Michael Brush is a columnist for MarketWatch. At the time of publication, he had no positions in any stocks mentioned in this column. Brush has suggested MSFT, AMZN, GOOGL and CRM in his stock newsletter, Brush Up on Stocks. Follow him on Twitter @mbrushstocks.
A shopper wearing a protective mask checks out at a Costco store in San Francisco, California, on Wednesday, March 3, 2021.David Paul Morris | Bloomberg | Getty ImagesMarch retail sales are expected to be strong, and some economists say stimulus checks may have quickly made their way into the economy, contributing to an even bigger gain of 10% or more.The March sales data, released at 8:30 a.m. ET Thursday, could be the first in a series of powerful reports on consumer spending, as vaccinations increase and the economic reopening continues. The $1,400 fiscal stimulus checks sent to individuals, starting in mid-March, appear to have spurred spending in an environment of pent-up demand."We expect the March retail sales report to be outstanding with headline and core retail sales both surging more than 11%" month over month, wrote Bank of America economists. "Stimulus, reopening, and better weather served as a potent cocktail for consumer spending."A multi-month burst of consumer spending is expected to kickstart an economy that is expected to boom this year. The strongest growth is expected in the current quarter, which some economists say could see gross domestic product growth of more than 10%. That compares to the second quarter of last year when the economic shutdowns resulted in a collapse in the economy, with GDP decreasing 33.3%.Economists expect March retail sales rose a consensus 6.1%, or 5.3% excluding autos, according to Dow Jones. That compares to a sales decline of 3% in February, when severe winter weather resulted in a freeze across the south with massive power outages in Texas.Zoom In IconArrows pointing outwardsBut some economists say that spending data shows that sales could be even stronger. "It's going to be up over 10%.Other than May of last year, it will be a record. There's a lot of vehicle sales, higher gasoline prices, and then everything else," said Mark Zandi, chief economist at Moody's Analytics. "The restaurants are coming back. Clothing stores are up a lot. This is the retail reopening and that's going to be reflected in the number."Zandi said he expects retail sales rose 10.3% over February, and should be up 28% from year ago levels."It's reopening. It's stimulus money. It's weather payback, all conflating to be a gangbuster number," said Zandi. "I think we're going to see very strong numbers going forward. We're off and running."Zandi said business-to-business spending data supports his view. According to software firm Cortera, recently acquired by Moody's, spending by all businesses in March was up 14.5% over last year, while spending by retailers was up 9%.Zandi said retailers and other businesses, like airlines, that benefit from a reopening economy did better in March than those businesses catering to working at home for the first time since the beginning of the pandemic."Spending increased in most retail segments, with restaurants, furniture stores, clothing stores, gas stations, and sporting goods stores leading the charge," according to Cortera. "Spending declines were seen in food & beverage stores as consumption shifted back to restaurants and bars."Cortera, which tracks about $1.7 trillion of business spending, found that spending was 14.6% lower than last year for food and beverage stores, but food and beverage services, like bars and restaurants increased, spending just under 20% more than last year.Bank of America's credit card spending also showed a surge in late March. BofA economists said there was a 67% surge in card spending over the seven day period ended April 3. The spending in that period was also 20% higher than the same period of 2019."Animal spirits have turned remarkably higher with the conference board measure of confidence increasing to 109.7 in March, the biggest one-month gain since April 2003," noted Bank of America economists. "Consumers are able to ramp up spending while still increasing savings - we think the saving rate will be about 20% - if not higher - in March."NatWest chief U.S. economist Kevin Cummins said he expects a 10% gain in March sales and concedes it's on the high end of forecasts. He expects sales should be boosted by the $1,400 stimulus checks sent to individuals, which started reaching bank accounts around March 17."The back end of the month should be very strong," he said. "If you look at auto sales, that was the highest level in four years. It seems like restaurants are getting more crowded, with outdoor seating."The range of forecasts is unusually wide, with economists expecting 4% to 11.5% gains. That means the market reaction could be volatile."Normally, prepandemic, the range might be 1 percentage point [apart], maybe 2," said Michael Schumacher, Wells Fargo diretor of rates.Bank of America economists said the retail sales data could kick off another debate, about whether business will pick up spending to lift the economy after surging consumer spending."With the data confirming consumer strength, the debate now shifts to the next stage of the recover," note Bank of America economists. "Will this prove to just be a sugar high with a painful hangover or will it kick-start a positive feedback loop which leads to a sustainable recovery? We expect the latter but it will depend on a positive response from Corporate America."
American flags in front of Goldman Sachs Group Inc. headquarters in New York, on Friday, March 5, 2021.Michael Nagle | Bloomberg | Getty ImagesCheck out the companies making headlines in midday trading.Goldman Sachs — Shares of the New York bank popped 4.4% in midday trading after the company posted first-quarter per-share earnings of $18.60—crushing the $10.22 estimate of analysts surveyed by Refinitiv—and revenue of $17.7 billion, more than doubled what it posted one year ago. As of the latest reading, Goldman shares are on pace for their best day since January.Bed Bath & Beyond – Shares of the big-box retailer tumbled nearly 9% after the company reported a double-digit decline in fiscal fourth-quarter sales. Its earnings per share came in at 40 cents adjusted, versus 31 cents expected by Refinitiv. Ongoing store closures and divestments as part of a bigger turnaround plan continued to weigh on Bed Bath & Beyond's results.Wells Fargo — The bank stock jumped more than 5% on Wednesday after Wells Fargo reported better-than-expected first quarter results and the company's management expressed optimism about a pickup in commercial loans. The bank reported $1.05 in earnings per share and $18.06 billion in revenue. Analysts surveyed by Refinitiv were looking for 70 cents per share and $17.5 billion in revenue.Moderna —Shares of the drug maker popped 5% after Moderna said its Covid-19 vaccine was more than 90% effective at protecting against the virus six months after a person's second shot. The data was based on more than 900 cases of the virus.JetBlue – The airline's share price advanced more than 2% following a bullish call from JPMorgan. The firm double upgraded the stock from an underweight rating to overweight, citing cost control measures and an attractive valuation. JPMorgan also raised its price target on the airline to $25 from $15. The new target is 20% above where shares closed on Tuesday.Harley-Davidson — Shares of the motorcycle company rose 1.1% after Bank of America initiated coverage on the stock with a buy rating and said it sees "accelerating brand momentum." The firm said it is bullish about the prospect of "adventure touring" in Harley-Davidson's future.Snap – Snap gained nearly 2% after Wedbush assumed coverage on the company with an outperform rating. The firm said Snap has an innovative platform with a young audience, and pointed to opportunity in augmented reality and social commerce. Wedbush's 12-month target price of $75 suggests a 20% rally from Tuesday's closing price.Occidental Petroleum — Shares of the the hydrocarbon exploration company rallied nearly 7% after MKM partners upgraded Occidental Petroleum to buy from neutral. The Wall Street firm said investors should take advantage of the pullback in shares.Discovery — Shares of the media company dropped more than 3% after CNBC reported that Credit Suisse is still unloading its position in the wake of Archegos Capital Management's chaos. According to people familiar with the matter, the bank was selling 19 million shares of Discovery's class A stock on Tuesday.JPMorgan – Shares of JPMorgan dipped less than 1% even after the bank reported profit and revenue that exceeded analysts' expectations on robust trading results. The strong result was also helped by a $5.2 billion benefit from releasing money it had previously set aside for loan losses that didn't develop. The bank posted first-quarter profit of $14.3 billion, or $4.50 a share including a $1.28 per share benefit from the reserve release, higher than the $3.10 per share expected by analysts surveyed by Refinitiv. The stock has risen more than 20% in 2021.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now— with reporting from CNBC's Yun Li, Jesse Pound, Tom Franck and Pippa Stevens.
Kayaks are displayed outside of a Dick's Sporting Goods Inc. store in West Nyack, New York.
Craig Warga | Bloomberg | Getty Images Check out the companies making headlines in midday trading.
Tech stocks — Tech and more-speculative stocks rose en masse on Tuesday as a retreat in U.S. Treasury yields helped the sector reverse some of the steep losses its seen in recent weeks. Electric car maker Tesla jumped more than 14%, on pace for its best day since March 2020. Solar cell company Enphase Energy gained close to 12%. Chip and chip-related companies Nvidia and Lam Research rose more than 7%, while Xilinx added about 6.8%. Zoom Video — Shares of the video communications company popped more than 7% midday after chief executive and founder Eric Yuan transferred roughly 40% of his stake, according to a government filing. Yuan made the transfers, which totaled about $6 billion in worth, to unspecified recipients from two trusts as gifts. The company said the transfer were part of estate planning for Yuan and his wife.
First Energy — Shares of the energy company rose more than 2% after Bloomberg News reported that activist investor Carl Icahn is in talks with the company about potentially taking two seats on the board. Icahn took a sizable stake in FirstEnergy and sought to help the company work through a federal corruption scandal, Bloomberg reported, citing people familiar with the matter.
Dick's Sporting Goods — The retail stock slumped about 6% on Tuesday despite the company beating Wall Street estimates on the top and bottom lines for its fourth quarter. Dick's gave earnings guidance for the year ahead of between $4.40 and $5.20 per share. Analysts surveyed by FactSet had projected $5.15 per share, near the top of the range.
Stitch Fix — Shares of the subscription styling service tanked more than 28% after missing analysts' revenue expectations as shipping delays and lower customer spend ate into sales. Stitch Fix lowered its revenue forecast for the current quarter and fiscal year. The company said, on average, active clients spent 7% less than the same time a year ago.
Baidu — Shares of the artificial intelligence company jumped more than 11% after Reuters reported that the company passed a hearing to do a second listing of its stock in Hong Kong. The move puts Baidu at roughly flat for the week, however, after an 11.1% drop on Monday.
— CNBC's Maggie Fitzgerald, Yun Li and Jesse Pound contributed reporting.
A "We're Hiring" sign at a Target location in New York, December 14, 2019.
Scott Mlyn | CNBC The labor market was stronger than expected in October, showing good momentum ahead of the latest wave of coronavirus cases.
The economy added 638,000 nonfarm payrolls and the unemployment rate fell by a full percentage point to 6.9%. The government compiled the data for the report in the middle of October. Stock futures temporarily erased some losses and bond yields rose as the report showed about 100,000 more jobs than economists expected and a much better unemployment rate. The report did include the loss of 268,000 government jobs, with 147,000 of those Census workers and many others in education.
"The rebound continues to have strong momentum, more than people were thinking," said John Briggs, head of strategy at NatWest Markets. "Private payrolls blowout, the participation rate went up 0.3... People are coming back into the economy, and [the unemployment rate] still went down a full percentage point." Economists had expected an unemployment rate of 7.7%.
Economists have been concerned the job market and economy will be impacted in coming months by the increasing spread of the coronavirus, now with a record 121,888 daily cases in the U.S. The Fed Thursday said in its statement that the course of the virus could impact the path of the economy.
"One could argue it's better to come from a stronger base into that," said Briggs.
The benchmark 10-year Treasury yield rose back above 0.80% and was at 0.82%. While stocks sold off, bond yields held at higher levels. The bond market has had a volatile week, with the 10-year yield rising to 0.94% Tuesday evening but falling back when it appeared there would be no Democratic sweep. A Democratic Congress and White House was expected to have boosted fiscal spending, increase inflation and result in a lot more U.S. debt, which would push interest rates higher. Yields, which move opposite prices, rose Friday as the jobs report suggest the economy may be on a more solid footing than some anticipate.
Economists' expectations for October employment were wide-ranging with some closer to 200,000 and others at 800,000. But they mostly agree the momentum looks set to slow, and the typical hiring that goes on in November and December for holiday shopping, travel and other activities will be much smaller this year.
Quincy Krosby, chief market strategist at Prudential Financial, said the employment report, when coupled with stronger-than-expected third quarter GDP and stronger-than-expected corporate earnings, suggests the economy is growing on a solid trajectory.
"If the Covid-19 surge jeopardizes the economic recovery, even at the margin, the employment landscape will slow down - but not stall the recovery," she noted.
Grant Thornton Chief Economist Diane Swonk said she is concerned about the potential for slowing momentum in hiring. She said the October report shows the quality of jobs has deteriorated. At the same time, the outlook for more fiscal help from Washington for the unemployed is uncertain, and many may be taking part-time jobs to get by.
Leisure and hospitality hiring rose by 271,000, with 192,000 of those jobs at bars and restaurants.
"Much of the recall for workers was hospitality and leisure. Many had to accept jobs even if they were part-time," said Swonk. She said 376,000 workers joined the ranks of those working part-time for economic reasons in October, pushing the total to 5.3 million.
"People unemployed for more than 27 weeks increased by more than 1 million," she said. "We're still 10.1 million jobs in the hole."
In the report, the number of people on temporary layoff fell by 1.4 million to 3.2 million, off from a high of 18.1 million in April but still 2.4 million higher than February.
The labor force participation rate increased by 0.3 percentage points to 61.7 in October. still 1.7 points below February's level.
Check out the companies making headlines after the bell:
Alphabet — Shares of Alphabet soared 10% in extended trading after the Google parent company posted quarterly results that topped Wall Street expectations. The company reported earnings of $16.40 per share and $46.17 billion in revenue for the third quarter. Analysts surveyed by Refinitiv projected $11.29 in earnings per share and $42.90 billion. Twitter — Shares of Twitter dropped more than 12% after the social media company reported user growth that fell short of expectations. Twitter said its monetizable daily active users totaled 187 million, up just 1 million, compared to 195 million expected, according to FactSet. However, the company did beat on top and bottom line.
Amazon — Shares of Amazon fell more than 1% in extended trading even after the e-commerce giant reported blowout third-quarter results with a big beat on the top line. Earnings per share came in at $12.37, versus $7.41 per share expected, according to Refinitiv. Its revenue totaled $96.15 billion, compared to $92.7 billion expected.
Facebook — Shares of Facebook gained more than 1% after the social media giant reported third-quarter results that exceeded analyst expectations. The company earned $2.71 per share on revenue of $21.47 billion. Analysts surveyed by Refinitiv expected the company to report $1.91 in earnings per share and $19.8 billion in revenue. Facebook did report a decrease in users in the U.S. and Canada. The stock had gained 4.9% during Thursday's regular trading.
Apple — Shares of Apple fell more than 4% after the tech giant reported fourth-quarter earnings that slightly exceeded Wall Street expectations, but did not offer investors any guidance for the quarter ending in December. Its iPhone revenue was down over 16% from the same quarter last year and came up short against Wall street expectations.
Starbucks — Shares of Starbucks gained 1% after the coffee chain said its two largest markets, the U.S. and China, are rebounding from the pandemic more quickly than expected. The strength in those key markets helped Starbucks' global same-store sales shrink just 9%. The company also released an outlook for fiscal 2021, projecting a healthier year than expected by analysts.
Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues New York, May 27, 2020.
Lucas Jackson | Reuters The stock market is selling off hard on rising virus cases and election uncertainty, and it faces another big test Thursday when Big Tech favorites report earnings.
"I think it may be we're beginning to see a sea change about tech valuations," said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. He noted that Microsoft's earnings were better-than-expected Tuesday, yet its just inline guidance did not stop its stock from declining about 4% Wednesday in the market sell-off. Apple, Alphabet, Amazon and Facebook, which have led the market's gains, report earnings after Thursday's closing bell. Twitter also reports Thursday afternoon. The group has a lot of sway over the market. Apple, for instance, with its $1.9 trillion market cap, is included in the Dow, S&P 500 and Nasdaq.
Boockvar said he's beginning to see signs of a change in attitude about the group of large tech and social media names. "I'm seeing signs of it, but we'll have to see how the market responds when these very expensive stocks report. The bar is high. We know that, but even if you exceed that bar, it seems valuations are beginning to matter."
The Dow was down more than 800 points, or 3% Wednesday afternoon, as virus cases surge in the U.S., and France and Germany plan for partial lockdowns to stop the spread there. The looming U.S. presidential election is another source of angst, as investors worry there may be no clear outcome Tuesday night.
"If the market can't react positively to Facebook, Amazon, Google and Apple, what's it going to react positively to? Plus people probably won't have much conviction even if the reports are good. They still want to see what happens in the following week [with the election]," said Scott Redler, partner with T3Live.com.
Microsoft's sell-off was clearly a warning for tech. "As soon as Microsoft got sold on strong news yesterday, some of the FOMO [fear of missing out] left these stocks…That's when you started to see sellers come back to big cap tech," Redler said. If the market goes low enough Thursday and the tech earnings are strong after the bell, that could be the set up for an oversold bounce.
The Nasdaq was off 3%, shedding more than 335 points. The S&P 500 was off just about 100 points, sliding under the key 3,300 level. Tech was among the worst hit of the major sectors, down 3.4%. Communications services fell 3.5%. That sector includes Facebook and Alphabet.
"This is just a perfect negative storm right now," said Julian Emanuel, head of equity and derivatives strategy at BTIG. He expects the sell-off to continue into the election, and after if there's no winner.
"Price reaction to almost all of FANG reporting after the bell Thursday could make this more extreme," he said. FANG stocks include Facebook, Amazon, Netflix and Alphabet, but the group of high-fliers has also come to include Microsoft and Apple. "Downside momentum seems to be building here. People just want out," said Chris Rupkey, chief financial economist at MUFG Union Bank. Rupkey points out that the sell-off is happening as Big Tech CEOs like Twitter's Jack Dorsey testify before Congress but traders did not tie the decline in Nasdaq to that hearing.
"It's the increases in virus, and its some of the tech leaders have fallen off. We never really regained back to September, and those September highs were all made on tech," Rupkey said.
Emanuel said the selling could have a ways to go. For the time being, we think the pressure will remain on the market with an eventual retest of the 200-day moving average, either before or after the vote," he said. The 200-day on the S&P 500 is just about 3,130.
The 200-day moving average is based on an average of the last 200 closing values, and it is often seen as a sign of support.
Redler said if the S&P 500 can't recover its 100-day moving average at 3,300, it will likely test the 200-day, which is also the same level as the June lows.
"It's all of these things coming together. It is basically the new certainty that the virus is accelerating sharply and the certainty that we're not going to get any stimulus before the election," said Emanuel.
Some strategists expect a blue wave, with a Democratic sweep of Congress and White House, but the election is difficult to call with early voting already in high numbers.
"If we saw an election outcome that very few people are thinking about, the Democrats winning the Senate and House, and President Trump winning the White House, you're going to have a massive rally," said Emanuel. That combination would suggest a very large stimulus program, since it is the Senate Republicans who would not agree to a large spending package.
An employee of Tupperware Brands Corporation is at work on the production line at the group's plant in Joue-les-Tours, centre France, on the day of its 40th anniversary. AFP PHOTO / JEAN-FRANCOIS MONIER (Photo credit should read JEAN-FRANCOIS MONIER/AFP/Getty Images)
Jean-Francois Monier | AFP | Getty Images Check out the companies making headlines in midday trading.
General Electric — Shares of the industrial company jumped more than 8% after GE reported a surprise adjusted profit for the third quarter and higher revenues than expected. The company reported 6 cents in adjusted earnings per share and $19.42 billion in revenue. Analysts surveyed by Refinitiv had projected a loss of 4 cents per share and $18.73 billion in revenue. Bed Bath & Beyond — Shares of the retailer sank 11% after the company announced new financial targets for the years ahead. Bed Bath & Beyond said it expects same-store sales to be "stable" in 2021 before growing in the low-to-mid single digits by 2023. The company reported same-store sales growth of 6% during the most recent quarter.
UPS — Shares of the shipping company fell nearly 5% after UPS failed to provide future earnings guidance. Despite the disappointing silence on outlook, UPS topped analysts estimates for its quarterly report. UPS earned $2.28 per share on revenue of $21.24 billion. Analysts expected earnings of $1.90 on revenue of $20.19 billion, according to Refinitiv.
First Solar – Shares of the solar panel maker jumped more than 11% after the company's third quarter results handily beat analyst expectations. First Solar earned $1.45 per share during the quarter, which was more than double the expected 63-cent profit per share, according to estimates from FactSet. Revenue jumped 70% year over year to $928 million.
Mastercard — Mastercard shares dropped more than 5% after the credit card giant posted disappointing third-quarter results. The company reported earnings per share of $1.60 per share on revenue of $3.84 billion. Analysts polled by Refinitiv expected a profit of $1.66 per share on revenue of $3.96 billion. Mastercard also warned the slowdown in travel due to the pandemic could put further pressure on its finances.CoreLogic — Shares of the real estate fintech company popped more than 13% on news of a potential takeover bid. CoreLogic said it is "engaging with third parties indicating preliminary interest based on public information in the potential acquisition of the Company at a value at or above $80 per share." CNBC's David Faber had reported the news prior to CoreLogic's announcement.
Tupperware — Shares of Tupperware soared more than 38% after the maker of home storage products posted a big earnings and revenue beat. Tupperware earned an adjusted $1.20 per share for its latest quarter, well above the Refinitiv consensus estimate of 37 cents. Its revenue was well above forecasts amid a boost from more consumers cooking and storing food at home. Automatic Data Processing — Shares of Automatic Data Processing jumped more than 6% after the software company reported stronger-than-expected quarterly earnings. ADP posted an EPS of $1.41 for its fiscal first quarter, above an estimate of 99 cents per FactSet. The company's revenue also topped expectations.
Microsoft – Shares of the tech giant slid 4% after the company beat top and bottom line results in the fiscal first quarter, but weak revenue guidance weighed on the stock. Microsoft earned an adjusted $1.82 per share during the quarter on $37.15 billion in revenue, both of which were ahead of the $1.54 profit per share and $35.72 billion in revenue analysts surveyed by Refinitiv had been expecting.
Carnival, Delta, Norwegian Cruise Line — Shares of cruise line operators and airlines fell sharply on fears of a worsening pandemic. Carnival and Norwegian Cruise Line dropped 9.7% and 8.6% respectively, while Royal Caribbean fell more than 6%. American Airlines slid over 4%, and United and Delta plunged 5% each. These stocks have all registered double-digit losses this week alone.
Peloton, Netflix — Shares of the so-called stay-at-home stocks bucked the broader market's trend on Wednesday and investors rotated back into beneficiaries of the pandemic amid a rise in Covid-19 cases. Shares of Netflix rose nearly 1% and shares of stationary bike company Peloton gained 0.6%.
Boeing — Shares of Boeing fell more than 1% after the company announced it would cut thousands of additional jobs through the end of next year as it prepares for weaker aircraft demand for years to come because of the coronavirus pandemic. Boeing reported a narrower-than-expected third-quarter loss, however.
— CNBC's Maggie Fitzgerald, Jesse Pound, Fred Imbert and Pippa Stevens contributed reporting.
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Take a look at some of the biggest movers in the premarket:
Boeing (BA) – Boeing lost $1.39 per share for the third quarter, smaller than the loss of $2.52 anticipated by Wall Street. Revenue was also above estimates. Boeing said it was targeting a workforce of 130,000 by the end of 2021, which is about 11,000 lower than the current total. Boeing shares were up slightly in premarket trading as of 7:40 a.m. ET. General Electric (GE) – GE reported a third-quarter profit of 6 cents per share, compared to forecasts for a loss of 4 cents per share. Revenue came in above estimates as well. GE said it was managing through a "difficult environment" but added that it is on track with its effort to contain costs and conserve cash. GE shares rose 4% in premarket trading as of 7:40 a.m. ET.
Blackstone (BX) – The private-equity firm reported distributable earnings per share of 63 cents per share, beating the 57 cents a share consensus estimate. Revenue also topped forecasts, boosted by its emphasis on technology-related investments. The shares were up by 1% in premarket trading as of 7:40 a.m. ET.
United Parcel Service (UPS) – UPS reported quarterly earnings of $2.28 per share, compared to a consensus estimate of $1.90 a share. Revenue was above estimates as well. UPS continued to benefit from a surge in home deliveries due to the pandemic. The shares were little changed in premarket trading as of 7:40 a.m. ET.
Garmin (GRMN) – The maker of GPS and fitness products beat estimates by 59 cents a share, with quarterly earnings of $1.58 per share. Revenue also beat Wall Street forecasts. Garmin said it saw particular strength in devices for boating and outdoor activities. Garmin shares added 3% in premarket trading as of 7:40 a.m. ET.
Tupperware (TUP) – The maker of home storage products earned $1.20 per share for its latest quarter, well above the consensus estimate of 37 cents a share. Revenue was well above forecasts. Tupperware saw a sales bump from more consumers cooking and storing food at home. The shares jumped 8% in premarket trading as of 7:40 a.m. ET. Bunge (BG) – The agriculture commodities company reported adjusted quarterly earnings of $2.47 per share, compared to a consensus estimate of 20 cents a share. Revenue came in above estimates as well. Bunge saw strong demand for oilseed processing and soy products, and the company lifted its full-year outlook. The shares rose 6% in premarket trading as of 7:40 a.m. ET.
Six Flags (SIX) – The theme park operator lost $1.37 per share for its latest quarter, wider than the $1 per share loss that analysts were expecting. Revenue came in below forecasts as well. Park attendance continues to be hurt by the pandemic, although Six Flags said attendance trends are improving.
Microsoft (MSFT) – Microsoft reported quarterly earnings of $1.82 per share, 28 cents a share above estimates. Revenue also came in above forecasts. Current-quarter revenue guidance was below current consensus, however, with a particular shortfall in its More Personal Computing unit. The shares lost 2% in premarket trading as of 7:40 a.m. ET.
FireEye (FEYE) – FireEye beat estimates by 4 cents a share, with quarterly profit of 11 cents per share. The cybersecurity company's revenue also topped estimates and FireEye gave strong current-quarter revenue guidance. The shares added 2% in premarket trading as of 7:40 a.m. ET.
First Solar (FSLR) – First Solar more than doubled the 61 cents a share consensus estimate, with quarterly earnings of $1.45 per share. Revenue was considerably above Wall Street forecasts as well. The solar equipment company said its results have not been materially impacted by the pandemic. The shares surged 12% in premarket trading as of 7:40 a.m. ET.
Deutsche Bank (DB) – Deutsche Bank reported a surprise third-quarter profit, with the bank's bottom line benefitting from improved performance by its investment banking operations.
Juniper Networks (JNPR) – Juniper Networks matched estimates, with quarterly earnings of 43 cents per share. The networking and cybersecurity company's revenue came in above analysts' forecasts. The company said it saw better-than-expected demand during the quarter despite challenges created by the pandemic.
Sony (SNE) – Sony raised its annual profit forecast after reporting a better-than-expected fiscal second-quarter profit, with its gaming business getting a boost from pandemic-related lockdowns as well as the performance of its Japanese animated film "Demon Slayer."
Caesars Entertainment (CZR) – Caesars is selling its Tropicana Evansville casino for a total of $480 million, with Gaming & Leisure Properties buying the real property assets and Twin River Worldwide Holdings buying the operating assets.
Akamai Technologies (AKAM) – Akamai shares are under pressure despite beating estimates on the top and bottom lines for its latest quarter. The provider of online content delivery technology reported quarterly profit of $1.31 per share, 8 cents a share above estimates.
Kevin Mandia, CEO, FireEye
Scott Mlyn | CNBC Check out the companies making headlines midday after hours on Tuesday:
Microsoft — Microsoft shares whipsawed after the tech giant reported better-than-expected results for the previous quarter. The company posted an adjusted profit of $1.82 per share on revenue of $37.15 billion. Analysts expected earnings per share of $1.54 on revenue of $35.72 billion. Microsoft's cloud segment saw its revenue expand by 20% on a year-over-year basis. First Solar — Shares of the solar-panel maker popped more than 16% after the company posted quarterly earnings that beat analyst expectations. First Solar posted earnings per share of $1.45 on revenue of $928 million. Analysts expected earnings of 61 cents per share on sales of $688 million, according to Refinitiv. The company also issued better-than-expected earnings guidance for the fourth quarter.
FireEye — FireEye gained more than 4%, boosted by better-than-expected third-quarter results. The cybersecurity company posted a profit of 11 cents per share on revenue of $238 million. Analysts polled by Refinitiv had forecast earnings per share of 7 cents on revenue of $228 million. Sales from its product, subscription and support services were better than expected.
Chubb — Shares of the insurance giant climbed 2% on the back of third-quarter revenue that beat analyst expectations. The company said its revenue for the quarter came in at $8.47 billion, topping a Refinitiv estimate of $8.16 billion. Chubb's earnings per share, however, fell short of estimates.
Juniper Networks — Juniper Networks saw its stock rise more than 3% after the networking technology company released its results for the third quarter. Juniper's earnings per share came in at 43 cents, matching a FactSet estimate. Product and service revenues were also above analyst expectations.
Jeff Lawson, co-founder and chief executive officer of Twilio Inc., center, rings the opening bell on the floor of the New York Stock Exchange in New York, Sept.17, 2018.
Michael Nagle | Bloomberg | Getty Images Check out the companies making headlines after the bell:
Twilio— Shares of the communications platform company ticked down 1% in after hours trading on Monday despite beating on the top and bottom lines of its third quarter earnings. Twilio reported earnings of 4 cents per share, topping the loss of 3 cents per share expected by analysts, according to Refinitiv. Revenue came in at $448.0 million, above the forecast $409.9 million. Chegg — Shares of the online textbook company dipped 4% after the bell despite its strong earnings and positive outlook. Chegg reported earnings of 17 cents per share on revenue of $154.0 million. Wall Street expected earnings of 10 cents per share on revenue of $143.7 million, according to Refinitiv. Chegg also gave strong fourth quarter and 2021 revenue guidance. The company said third quarter subscribers grew 69%.
AIG — Shares of the insurance giant popped 7% after the bell on Monday after announcing it intends to separate its life and retirement business from AIG. "AIG's executive management and Board believe a simplified corporate structure will unlock significant value for shareholders and other stakeholders," the company said is a press release.
F5 Networks — Shares of the technology company jumped 4% in extended trading on Monday after reporting better-than-expected quarterly earnings. F5 reported earnings of $2.43 per share, above the forecast $2.37 per share, according to Refinitiv. Revenue came in close to estimates at $607.3 million.
Varonis Systems — Shares of the software data security company rose 6% in after hours trading on Monday after beating Wall Street's estimates for its third quarter report. Varonis earnings 6 cents per share, while analysts expected a loss of 13 cents per share. Varonis made $76.8 million in revenue, higher than the $69.9 million estimate.
A trader walks by the New York Stock Exchange.
Spencer Platt | Getty Images The stock market turbulence could be a setup for a post-election rally.
The more than 2% decline in stocks Monday came amid new worries about the coronavirus, as average daily cases hit a record high in the U.S. At the same time, the efforts between Congress and the White House to reach a stimulus deal also appeared to have hit a wall. "It's a bit of a double whammy. Covid's definitely not going in the right direction in the U.S. right now. I think now there is maybe some diminishing optimism because stimulus just hasn't come together, and the election is just around the corner," said Tom Lee, head of research at Fundstrat Global Advisors. "I think the polling is kind of solidifying. It's looking very much like a Biden White House and then for policy, if it's a Biden win, there's a chance the incumbent administration just dawdles on stimulus. That would really dampen markets into the new year."
But Lee and other strategists said this week may be rocky for stocks, but once the election is over, the market is likely to bounce in a relief rally, if the winner is clear.
Stocks sold off out of the gate Monday, with the Dow down more than 3% at one point. The Dow fell 2.5% in afternoon trading, while the S&P 500 fell 2%. The decline was led by energy, industrial stocks and other cyclicals. Arrows pointing outwards "We have a lot of things to be anxious about in the next couple of weeks. That's why this is a pre-election market. But post-election, I think a lot of things that make people nervous turn into a tail wind," Lee said. "Post-election stimulus is a when, not an if. Even if it's a mixed Congress, I think there's still some common ground. It's just the scope that's different. It would be a smaller package."
Lee said Covid has become less deadly, and even if it continues to spread, it is not likely to result in the shutdowns that occurred last spring. But comments today from Europe's biggest software company, SAP sent a chill nonetheless. SAP said its business was being hurt by lockdowns in Europe, as the virus spread there has increased dramatically.
Lee said Covid has a big influence over the market. "It's almost as important as the Fed right now. Covid is suppressing the economy, and it's essentially offsetting easy money. If we didn't have Covid, people would be going out and spending money," said Lee. "It's acting as a huge headwind."
Lee said on balance, the economy continues to become more open.
"With the increase of cases in the U.S. and Europe, it's just reminding everybody, the virus is still very much with us, and not going away any time soon, and with the weather getting colder and people moving inside, it's likely to get worse before it gets better," said Ed Keon, chief investment officer at QMA.
"I think it's unlikely to be the beginning of a major sell-off," said Keon. "I still think underlying fundamentals for companies are quite good. If you look at earnings season, it's been pretty promising." Biden related? Barry Knapp, managing partner at Ironsides Macroeconomics, said the market may also be reflecting concern about a possible victory by former Vice President Joseph Biden. Biden's ability to implement his policies will be determined by whether Democrats also take a majority of seats in the Senate, now a close call.
Topping Biden's agenda is a reversal of Republican tax cuts, which essentially would raise taxes on corporations and the wealthy. He is also expected to push a stimulus program, the size of which would be subject to whether the Senate is Democratically controlled,
"I think its is a gut check around that," said Knapp, noting the market appears to be digesting the idea of a Democratic sweep. "For me the most important outcome of the election is: Does the corporate part of the tax cuts survive?" If not, Knapp said corporate earnings would fall and corporate spending and investment would decline.
Even so after the election, if there is a clear winner, the market should rally, strategists said.
"I think it's likely. Elections tend to breed optimism. Then there's the seasonality," Knapp said. Stocks historically tend to gain between an election day and the end of the year.
If there is a protracted post-election count with no clear winner, or the election is contested that would lead to a period of choppiness for stocks.
"We're still bullish. We still think there could be a post-election rally driven by the combination of good corporate earnings, very low interest rates and just a sense of relief that if we get this definitely behind us, there will be a reduction in risk and a rally in stocks," said Keon.
Keon said the uncertainty could carryover even after the presidential election is decided. "We don't know what the composition if the Senate is. If those two Georgia races end in a runoff, there's a good chance we won't know the composition of the Senate until those two races are decided. There' a lot of really close races for the Senate all around the country."
Jen Van Santvoord rides her Peloton exercise bike at her home on April 07, 2020 in San Anselmo, California.
Ezra Shaw | Getty Images Check out the companies making headlines after hours Wednesday.
Tesla — The electric car maker's stock popped 3% after Tesla reported third-quarter earnings and revenue that topped analysts' expectations at 76 cents per share and $8.77 billion, respectively. The profit results represent Tesla's fifth consecutive quarter of positive earnings, the result of a record 139,300 delivered vehicles in the three months ended Sept. 30. Chipotle Mexican Grill — The burrito chain saw its stock drop more than 5% in after-hours trading after the company said a shift to delivery orders ballooned costs and led to reduced drink sales in the third quarter. Chipotle topped profit expectations with per-share earnings of $3.76, but its net income fell to $80.2 million from $98.6 million in the year-ago period.
Las Vegas Sands — Shares of Las Vegas Sands rose about 5% in after-hours trading after the casino operator posted a smaller-than-expected loss for the third quarter and revenues larger than Wall Street's consensus estimate. It reported a third-quarter loss of 67 cents per share on revenues of $586 million. Analysts had expected a loss per share of 73 cents on revenues of $579 million.
Align Technology — Shares of Align, the company that owns Invisalign teeth aligners, soared more than 20% after the bell thanks to better-than-expected shipments of its clear aligners in the third quarter. Align reported a profit of $2.25 per share, far exceeding consensus estimates of less than $1.
Peloton — Shares of the exercise equipment company shed 3% after Goldman Sachs downgraded the stock to neutral from buy. While Goldman analyst Heath Terry said he's still optimistic in Peloton in the longer term, he advised clients to steer clear of the richly-valued equity over the next few months as investors have already pushed its price up more than 330% in 2020.
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Pedestrians pass in front of Pinterest signage displayed outside of the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images Check out the companies making headlines in midday trading.
Netflix — The entertainment stock sank nearly 7% after missing Wall Street expectations for third-quarter earnings and subscriber additions. Netflix added 2.2 million subscribers globally last quarter, below the 3.57 projected by analysts surveyed by Refinitiv. The company attributed that in part to a surge in sign-ups earlier this year. Slack — Shares of the technology company dropped 6.3% after Morgan Stanley downgraded the stock to underweight from equal weight. The financial firm said in a note that Slack "remains challenged" in differentiate itself from competitors.
Snap – The social media company surged more than 28% and hit a new all-time high after Snap reported a surprise profit for the third quarter. The company earned one cent per share on an adjusted basis, compared with the 5-cent loss expected by analysts surveyed by Refinitiv. Revenue came in at $679 million, which was also ahead of expectations.
AstraZeneca – Shares of AstraZeneca turned traded down 1.2% after a Brazilian health authority said a volunteer in its coronavirus vaccine study died. AstraZeneca, a front-runner in the Covid-19 vaccine race, announced on Sept. 8 that its trial had been put on hold due to an unexplained illness in a patient in the United Kingdom.
PayPal — Shares of the payments company rallied 5.5% after announcing a new feature that will allow users to buy, hold and sell cryptocurrencies. The new service will launch in the U.S. in the coming weeks.
Pinterest — Shares of the online image-sharing platform popped nearly 9% after Goldman Sachs and Bank of America both upgraded the stock to buy. Both firms pointed to strong earnings results from Snap as a good sign for Pinterest's advertising demand. Goldman slapped a $61 per share price target on the stock, implying nearly 35% upside from its previous close. Bank of America raised its target to $58 per share. AutoNation — AutoNation shares popped almost 2% after the company reported quarterly results that beat analyst expectations. AutoNation reported earnings per share of $2.38 on revenue of $5.4 billion. Analysts expected a profit of $1.65 per share on revenue of $5.19 billion, according to Refinitiv. The auto retailer said used vehicle sales rose 9.3% and helped drive a stronger-than-forecast gross profit.
IRobot — Shares of iRobot fell slid more than 13% despite its better-than-expected quarterly results. The company reported $2.58 in earnings per share and on $413 million revenue, both easily topping estimates per Refinitiv. The stock had a big run-up in recent weeks and was up more than 26% in October before the earnings.
Texas Instruments – Shares of the semiconductor company shed more than 3% despite Texas Instruments beating top and bottom line estimates during the third quarter. The company earned $1.45 per share during the period, beating estimates by 17 cents. Texas Instruments also reported its first quarterly revenue growth in nearly two years.
WD-40 – Shares of WD-40 soared more than 18% after the manufacturer of household and multi-use products posted stronger-than-expected quarterly results. Its earnings came in at $1.42 per share for its fiscal fourth quarter, beating FactSet estimate of $1.13 per share. The company's revenue also topped estimates as consumers snapped up household items during the pandemic.
Teradyne – Shares of Teradyne popped nearly 5% after the semiconductor company posted earnings that topped Wall Street estimates. Teradyne reported earnings per share of $1.18 for the third quarter, above expectations of $1.12 per share, according to FactSet. Its sales also beat expectations, boosted by record memory and storage test shipments.
– CNBC's Maggie Fitzgerald, Pippa Stevens, Jesse Pound and Fred Imbert contributed reporting.
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Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues New York, May 27, 2020.
Lucas Jackson | Reuters The bond market appears to be waking up.
After trading in a close range since June, Treasury yields are starting to break out of their range and look set to edge higher. The 10-year yield reached a high of 0.834% early Wednesday morning and was hovering just at the 0.80% level in afternoon trading. "This is an inflection point in the sense that stimulus is coming. It's not if, it's when, and we're getting closer to the point of I think no matter who wins the presidency you're going to get fiscal stimulus," said Jim Caron, head of global macro strategies at Morgan Stanley Investment Management. "It's just a matter of how much and what the process is."
Markets have been on edge waiting for a resolution in talks between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi. Even if the two reach an agreement on a stimulus package, strategists say it's still seems a stretch for Senate Republicans to approve it ahead of the election, though the bond market has been moving in anticipation of it.
The benchmark 10-year note yield is widely-watched, and it influences key interest rates for mortgages and other loans. The yield was virtually stuck under 0.70% for most of September and into October, but it has been trading above that level and now has inched up to 0.80%. 1% 10-year? Strategists say with the Fed holding rates at zero, and actively buying Treasury assets, the 10-year is not going to rise that much. And if the reason it's rising is stimulus, that would not necessarily spook the stock market, since stimulus would be seen as a booster for stocks.
"It would not be unreasonable to think the 10-year yield could get between 1% and 1.25% over the next few quarters," said Caron. Caron said it will make a big difference whether the stimulus is approved before or after the election. With a blue wave, where Democrats take the White House and Congress, the package early next year could be even larger, than if President Donald Trump remains in the White House.
Congress already passed Covid-related relief earlier in the year, and the budget deficit is expected to edge over $3 trillion this year. Democrats have been seeking $2.2 trillion in new stimulus, but Senate Republicans has said they would hold new spending closer to $1 trillion.
To pay for that stimulus, the Treasury has had to increase the amount of debt it is issuing, and another stimulus program would add all that much more. That is a factor helping drive yields higher.
"2021 was supposed to be a turn around year from 2020," Caron said. "We already have a lot of stimulus in the system. To add more to it at a time when we are already expecting a recovery is, in the future, something that could push yields higher. There's also a limit as to how high yields can go. I don't think this is the start of a 'taper tantrum.'" Big move not expected The so-called 'taper tantrum' was a violent move across financial markets in 2013 when then Fed Chairman Ben Bernanke signaled the start of a tightening cycle. But the Fed has signaled it is a long way from raising rates, and repeatedly Fed officials have pleaded for more fiscal spending to help their efforts to boost the economy.
Gregory Faranello, head of U.S. rates at AmeriVet Securities, said the recent move higher in yields has been very orderly.
"If you look at the period between June and now, that's a long time. We've been in a 50 basis point range," said Faranello. He said the 10-year yield edged briefly to a peak of 0.91% in June on optimism as the economy started to reopen. "With rates so low, if you move 15 to 20 basis points, it's quite a big move. In that context, we're still within that range." Faranello said if the 10-year can get back to 0.91%, the next target would be 1%, then the 1.2% level it was at in March.
He said the election could have an impact on the bond market, and the make-up of the Senate is a key. If there is a blue wave where former vice president Joe Biden is elected and Congress turns to Democrat control, he too expects spending to be much greater.
But the real wildcard for rates could be the coronavirus. If another wave begins to shut down the economy, strategists say yields could head sharply lower.
Ian Lyngen, head of fixed income strategy at BMO, said he expects the real move in rates to come after the election.
Even if the election is not decided right away, Lyngen does not see the 10-year returning to its lows.
"If it takes weeks, we'll drift around in the range we'll have a few risk off moments, but we're not going to see new lows," Lyngen said.
He said the market appears to be consolidating ahead of the election. "I've been focused on the departure point at the election. If we're at 0.75 basis points, there is a much higher probability we see 1% on 10s by the end of the year. If we're grinding around 50 basis points, anything above 90 basis points is going to be off the table."
Check out the companies making headlines midday Monday:
Halliburton — Shares of the oil field producer popped 2% after the company reported better-than-expected earnings for the previous quarter. Halliburton earned 11 cents per share, topping a Refinitiv estimate 8 cents per share. Revenue, however, missed analyst expectations. American Airlines — American Airlines shares rose more than 2% on news the airline is planning to resume flights with Boeing's 737 Max jet in December. The plan is pending recertification of the aircraft by the Federal Aviation Administration.
FedEx, UPS — FedEx and UPS rose 2.2% and 1%, respectively, after The Wall Street Journal reported the two companies have told their shippers that their holiday shipping capacity is nearly at its limit.
CVS — Shares of the drug store and pharmacy company ticked up 1% after CVS said it is planning to hire 15,000 employees to prepare for an expected rise in Covid-19 and flu cases throughout the fall and winter. More than half of the new workers will be full-time and part-time licensed pharmacy technicians who will be able to administer coronavirus tests.
AMC — The movie theater stock soared more than 22% after New York Gov. Andrew Cuomo announced that theaters in most of New York could reopen on Oct. 23. The new regulation does not include New York City. AMC CEO Adam Aron told CNBC that the move was "a monumental step forward" for the industry.
VF Corp — Shares of VF Corp slipped 1% after Bank of America downgraded the stock to underweight from neutral. The firm said in a note that weakness for the Van's footwear brand would likely hurt the stock. RH — An analyst at Jefferies initiated coverage of the home-furnishing company with an underperform rating, noting: "Management's pursuit of the 'path less traveled' has largely worked the past few years, but we see inherent execution risk in the go-forward strategy."
American Equity Investment Life – Shares dropped more than 16% after the life insurance company announced a partnership with Brookfield Asset Management for the reinsurance of $5 billion of existing liabilities. Brookfield will acquire a 19.9% ownership interest in the common shares of American Equity. American Equity rejected Athene and MassMutual's takeover proposal, saying it undervalues the company.
—CNBC's Yun Li, Maggie Fitzgerald, Jesse Pound and Michael Bloom contributed to this report.
Another volatile week may be in store for traders as coronavirus cases rise in the U.S. and Europe while Democrats and Republicans remain at an impasse over new fiscal aid.
The Dow Jones Industrial Average and S&P 500 fell for three straight days this week. That slide was the longest losing streak for the averages since mid-September. The two market benchmarks eked out slight gains on Friday to snap their losing streak. Investors and traders expect this choppy trading action to continue, especially as the worsening coronavirus data and a lack of U.S. coronavirus stimulus draw attention away from a strong earnings season thus far.
"The combination of no stimulus, fading economic momentum, and the threat of rising coronavirus cases, creates a rather negative dynamic for risk assets right now," said Tom Essaye, founder of The Sevens Report, in a note to clients. The seven-day average of new daily coronavirus infections has risen in 39 states, including New York, New Jersey and Wisconsin, according to a CNBC analysis of data from Johns Hopkins University and the U.S. Census Bureau. At the nationwide level, the rate of new daily cases is at its highest level since August.
In Europe, the seven-day average of new Covid-19 cases has surpassed that of the U.S., leading several countries in the region to reinstate tougher social distancing rules and roll back previous reopening measures.
"What this means is economic activity may slow down a bit, and we've already started to see some of that in the data," said Art Hogan, chief market strategist at National Securities, noting the weekly jobless claims numbers released Thursday show they've reached a point where "they're not going to get better; they're going to get worse." The Labor Department said initial U.S. jobless claims hit their highest level since August, reaching 898,000 in the week ending Oct. 10.
Investors will also keep their eyes on Washington during the week ahead as lawmakers continue to struggle over new U.S. fiscal stimulus. Political posturing on stimulus 'hurting' those in need This week, President Donald Trump said he would raise his offer for a coronavirus aid above the current level of $1.8 trillion. The White House's current offer is smaller than a $2.2 trillion package passed by the House. House Speaker Nancy Pelosi, D-Calif., has said the administration's proposal "falls significantly short" of what is needed.
This back and forth between the two parties has dwindled expectations among market participants of a compromise being reached before the Nov. 3 election. It has also added to the concerns surrounding the U.S. economic recovery.
"This political posturing is hurting that cohort of the economy that needs help the most," said Quincy Krosby, chief market strategist at Prudential Financial. "To the small and mid-size business owner, the airlines, this is not just about politics; this is every day life. There going to be an impact in the real economy if we don't see something now." Earnings season ignored? Those talks over further stimulus are also expected to divert attention away from the corporate earnings season, which began this week but had next to no impact on the broader market.
Procter & Gamble, Netflix, Travelers, American Airlines and American Express are among the companies slated to report next week.
JPMorgan Chase, Goldman Sachs and VF Corp. are among the 49 S&P 500 companies that posted their latest quarterly results this week. Of those 49 companies, 86% reported better-than-expected earnings, according to data from The Earnings Scout.
"I wish I could say that next week we're going to put aside the politics and the Covid concerns behind us, but we won't trade this earnings season," said Hogan of National Securities. "While it will likely be a record-breaking season for companies beating estimates, it's also going to be one that is largely ignored because there're so many other macro factors that are more important."
There is also some important housing data in the week ahead, including home builders' sentiment Monday, housing starts Tuesday, and existing home sales Thursday.
"The housing market is still off to the races," said Mark Zandi, chief economist at Moody's Analytics. "The mortgage applications were strong, suggesting very strong activity in the month of September."
Zandi said the market will eventually cool when interest rates begin to rise. But for now, "certainly the economy could use the juice."
—CNBC's Patti Domm contributed to this report. Week ahead calendar Monday
Earnings: IBM, Zions Bancorp, PPG Industries, FNB, Steel Dynamics, Halliburton
9:00 a.m. Philadelphia Fed President Patrick Harker
9:00 a.m. New York Fed President John Williams
10:00 a.m. NAHB survey
2:20 p.m. Atlanta Fed President Raphael Bostic
Earnings: Procter and Gamble, Texas Instruments, Netflix, Travelers, Lockheed Martin, Snap, Philip Morris International, UBS, Paccar, Canadian Pacific Railway, Albertsons, CIT Group, Synchrony Financial, Comerica, Manpower Group, Prologis, WD-40, Tenet Healthcare, Teradyne, Canadian National Railway
8:30 a.m. Housing starts
8:30 a.m. Philadelphia Fed
12:00 p.m. Chicago Fed President Charles Evans
Earnings: Nasdaq, Verizon, Baker Hughes, Northern Trust, Knight-Swift Transportation, Avery Dennison, Keycorp, Winnebago, Interpublic, Manchester United, Tesla, CSX, Abbott Labs, Biogen, AutoNation, Lam Research, Equifax, Discover Financial, Xilinx, SLM, Chipotle, Whirlpool, Kinder Morgan
10:00 a.m. Cleveland Fed President Loretta Mester
2:00 p.m. Beige book
Earnings: Earnings: AT&T, Coca-Cola, Intel, PulteGroup, Capital One, Kimberly-Clark, Quest Diagnostics, Freeport-McMoRan, Sirius XM, Grainger, Alaska Air, Fifth Third, Valero Energy, Nucor, Tractor Supply, Danaher, Genuine Parts, Dow, Southwest, American Airlines, Northrop Grumman, Union Pacific, Mattel, Check Point Software, Verisign, Capital One
8:30 a.m. Initial jobless claims
10:00 a.m. Existing home sales
Earnings: Barclays, American Express, Illinois Toolworks, Cleveland Cliffs, Norsk Hydro, Bloomin' Brands , Daimler
9:45 a.m. Manufacturing PMI
9:45 a.m. Services PMI
United Airlines' Boeing 747-400 aircraft performed its last passenger flight on November 7, 2017.
NurPhoto Check out the companies making headlines in midday trading.
Boeing — Shares popped more than 3% after Patrick Ky, the head of Europe's aviation regulator, said the company's beleaguered 737 Max jet is safe to fly again. He added the aircraft could fly in the region once again before year-end. Caterpillar — The farming equipment maker rose 3% after Wells Fargo upgraded Caterpillar to overweight from equal weight. Wells said it believes revenue growth will begin to accelerate in key markets in 2021.
Costco — Shares of the big box retailer popped 1.3% after Jefferies upgraded Costco to buy from hold. The firm said Costco is the "dominant" leader in the club warehouse sector and that its "digital underdevelopment" offers upside.
Navistar International — The truckmaker's stock surged 21% after CNBC's David Faber reported that Volkswagen's Traton unit was in talks to buy the rest of Navistar. The companies are very close to a deal at $44.50 per share, according to people close to the negotiations.
CIT Group – Shares of the bank jumped more than 22% after the company announced that it will merge with First Citizens in an all-stock deal. The combined company will be the 19th largest U.S. bank as measured by assets. Shares of First Citizens were up about 8% following the announcement.
Chewy – Shares of Chewy climbed nearly 4% after Jefferies upgraded the online pet retailer to buy from hold. The Wall Street firm's recent survey suggested that 37% of pet owners cited Chewy as their top e-commerce platform for pet food and supplies. Jefferies also said Chewy's "moat" is "more defensible than previously perceived." Bank of New York Mellon – The stock gained more than 2% following the bank's better-than-expected quarterly results. The bank reported earnings of 98 cents per share, 4 cents above Refinitiv estimate. Its revenue also came in above Wall Street forecasts.
Pfizer — Shares of the drugmaker rose 2.4% after CEO Albert Bourla said the company could know whether its Covid-19 vaccine candidate is effective by the end of the month, allowing it to apply for emergency use authorization in late November. The company is developing the vaccine with BioNTech, whose shares rose 2.1%.
Wynn Resorts — Shares of Wynn Resorts fell nearly 2% after Jefferies downgraded the casino and resort company to hold from buy. The bank said Wynn's leverage will remain "pressured" through 2022.
— CNBC's Maggie Fitzgerald, Jesse Pound, Pippa Stevens and Fred Imbert contributed reporting.
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Check out the companies making headlines before the bell:
Pfizer, BioNTech – Pfizer Chairman and CEO Albert Bourla said the vaccine candidate under development by the two drug makers could be ready for an Emergency Use Authorization application by late November. Separately, Pfizer and BioNTech are scaling up manufacturing capability for their experimental coronavirus vaccine, according to BioNTech CEO Ugur Sahin. Both companies have said they will be able to deliver the doses they've already agreed to provide to governments around the world, but Sahin said there will be a "struggle" to provide it more widely. Pfizer shares added 2.9% in premarket trading as of 7:30 a.m. ET. CIT Group, First Citizens BancShares – The two banking companies announced an all-stock merger which will see CIT stockholders receive 0.0620 shares of First Citizens for each share of CIT they now own. The combined entity will be the 19th largest U.S. bank as measured by assets.
VF Corp. – The maker of North Face and other apparel brands reported adjusted quarterly profit of 67 cents per share, beating the consensus estimate of 49 cents, with revenue also above forecasts. VF said its results were helped by a 44% increase in digital revenue and improvement in China. VF also announced a dividend increase of 1 cent to 49 cents per share. VF Corp shares added 2% in premarket trading as of 7:30 a.m. ET.
Bank of New York Mellon – The bank reported quarterly profit of 98 cents per share, 4 cents above estimates, with revenue also above Wall Street forecasts. Provisions for credit losses fell to $9 million in the third quarter from $143 million in the second quarter. Bank of New York Mellon shares added 1.8% in premarket trading as of 7:30 a.m. ET.
Schlumberger – The oilfield services company reported adjusted quarterly profit of 16 cents per share, 3 cents above estimate, but revenue came in below analyst projections. Results were impacted by reduced drilling and rig activity in North America, although profit margins improved from the prior quarter.
Hewlett Packard Enterprise – Hewlett Packard Enterprise raised its fiscal 2021 outlook, saying Covid-19 had prompted an acceleration in the need for remote work solutions and that this has provided a significant opportunity for the company. The shares rose 2.9% in premarket trading as of 7:30 a.m. ET. Ford Motor – Ford reported a 25% year-over-year increase in China sales, the second straight quarterly increase after three years of decline.
Boeing – Boeing's 737 Max jet is safe enough to return to service, according to Europe's top aviation regulator. The European Union Aviation Safety Agency's Executive Director, Patrick Ky, told Bloomberg in an interview that the agency expects to issue a draft airworthiness directive next month. Boeing shares rose 3.9% in premarket trading as of 7:30 a.m. ET.
T-Mobile US – Evercore resumed coverage on T-Mobile with an "outperform" rating and a $150 price target, calling it the only growth story in the U.S. wireless industry.
Blackstone – The Blackstone fund that holds science building owner BioMed Realty Trust sold it to another Blackstone fund for $14.6 billion. The original fund would have been eventually required to exit its holdings and return all money to investors, but those investors wanted to continue to own BioMed and the new fund can hold it indefinitely.
Albertsons – The supermarket operator won a bankruptcy auction for 27 Kings and Balducci's grocery stores with a bid of $96.4 million. A bankruptcy court must still approve the sale.
Intuitive Surgical – Intuitive Surgical reported adjusted quarterly earnings of $2.77 per share, beating the consensus estimate of $2.07, with revenue also exceeding forecasts. The company said procedures performed using its da Vinci surgical robot system have staged a significant rebound, but that a resurgence of Covid-19 in some areas has had an adverse impact on procedure volumes.
Chewy.com – The online pet products seller was upgraded to "buy" from "hold" at Jefferies, which cited a positive view of pet industry dynamics including pet adoption by "digital fluent" millennial households. Chewy shares rose 4.96% in premarket trading as of 7:30 a.m. ET.
Caterpillar – Wells Fargo upgraded the heavy equipment maker to "overweight" from "equal weight", in anticipation of a substantial earnings improvement beginning in 2021. Caterpillar added 1.6% in premarket trading as of 7:30 a.m. ET.
SAN FRANCISCO (MarketWatch) — Among the companies whose shares are expected to see active trade in Friday’s session are DuPont, Nike Inc., and KB Home.
DuPont DD, +1.45% : The chemical company late Thursday cut its second-quarter and full year profit outlook due to worse-than-expected performance of its agriculture unit. Shares fell 1.9% in extended trading.
SAN FRANCISCO (MarketWatch) — Among the companies whose shares are expected to see active trade in Thursday’s session are Bed Bath & Beyond Inc., GoPro Inc., and Nike Inc.
After Wednesday’s closing bell, Bed Bath & Beyond BBBY, +0.45% reported quarterly earnings that fell short of analysts’ estimate. Shares fell 5.7% in after hours.
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