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Fly Intel - End of Day Brief - Friday Jan 24, 2020

Stocks end lower amid growing coronavirus fears

Stocks closed out a down week and benchmark U.S. oil prices fell for a fourth day as China expanded its lockdown against the new Wuhan coronavirus. Transportation has been shut down in Wuhan, the city at the epicenter of the outbreak, as well as 15 other cities with a combined population of 46M people, according to CNBC Beijing Bureau Chief Eunice Yoon. Authorities in Beijing and other cities canceled many public celebrations marking Lunar New Year while Disney (DIS) said it will temporarily close down Shanghai Disneyland and both McDonald's (MCD) and Starbucks (SBUX) reported plans to close some of their stores in the Asian nation. Meanwhile, the U.S. confirmed its second case, involving a Chicago woman who recently returned from China, and France announced two people had fallen ill with the virus, representing the first reported cases in Europe.

ECONOMIC EVENTS: In the U.S., Markit's manufacturing PMI fell by 0.7 to a flash reading of 51.7 for January. Meanwhile, West Texas Intermediate crude prices continued to slide as the coronavirus outbreak raises new questions about oil demand. In other energy news, Baker Hughes reported that the U.S. rig count is down 2 rigs from last week to 794, with oil rigs up 3 to 676, gas rigs down 5 to 115.

Markets in China, South Korea, and Taiwan were closed for Lunar New Year holidays.

TOP NEWS: Boeing (BA) shares rose 1.6% after Reuters reported that Federal Aviation Administrator Steve Dickson has called senior U.S. officials to tell them that the agency could clear the grounded Boeing 737 MAX's return to the air before the middle of the year. This report follows CNBC reporting that Boeing confirmed it is considering a further cut to production of the 787 Dreamliner.

Shares of Intel (INTC) jumped 8.1% after the company's results for the fourth quarter beat analysts' expectations on both the top and bottom lines. Intel also gave an upbeat outlook for its current quarter and announced a 5% dividend increase.

Shares of Discover Financial Services (DFS) plunged 11.1% after the company reported quarterly results. While the company's earnings per share beat the consensus view, the company issued a higher than expected expense outlook for 2020 as it plans to invest back in its business. On the flipside in the credit card space, shares of American Express (AXP) gained 2.8% following the company's Q4 report and 2020 guidance.

In M&A news, (CYOU) announced an agreement to be acquired by the Sohu Group (SOHU) in an all-cash transaction implying an equity value of $579M, or $10.80 per American depositary share. Additionally, Cincinnati Bell (CBB) announced that it received a non-binding proposal of $12.00 per share in cash from an infrastructure fund to acquire all of its outstanding common stock. As previously announced in December, Cincinnati Bell entered into an agreement through which Brookfield Infrastructure (BIP) and its institutional partners would acquire all of its outstanding shares for $10.50 per share in cash. Cincinnati Bell has commenced discussions with the fund regarding the proposal, the company stated.

MAJOR MOVERS: Among the noteworthy gainers were eHealth (EHTH) and Altassian (TEAM), which gained a respective 26.9% and 10.7% after reporting quarterly results.

Among the notable losers was Luckin Coffee (LK), which slid 8.6% amid the expanding travel lockdown in China related to the ongoing coronavirus outbreak. Also lower were Synchrony Financial (SYF) and Ericsson (ERIC), which fell 9.8% and 7.2%, respectively, after reporting quarterly results.

INDEXES: The Dow fell 170.36, or 0.58%, to 28,989.73, the Nasdaq lost 87.57, or 0.93%, to 9,314.91, and the S&P 500 declined 30.07, or 0.90%, to 3,295.47.


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Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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