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End of Day Brief - Thursday April 9 - Stocks up, led by the Nasdaq

SP 5004097.17+17.22(0.42%)
10-yr Note +4/321.636
NYSEAdv 2053 Dec 1205 Vol 850.6 mln
NasdaqAdv 2743 Dec 1324 Vol 4.1 bln

Industry Watch

Strong: Information Technology, Consumer Discretionary
Weak: Energy, Real Estate

Moving the Market

-- S&P 500 sets intraday and closing record highs

-- Leadership from the information technology sector and mega-cap stocks amid no specific news catalysts

Stocks end higher after jobless claims numbers, Fed Chief's reassurance

The S&P 500 rose and the Nasdaq outperformed amid a rally in tech giants as Federal Reserve Chairman Jerome Powell said once again that the central bank has the tools to handle any temporary inflation pressures. A day after the Fed’s March meeting minutes struck a dovish tone, Powell did the same during a discussion on the global economy at the International Monetary Fund Debate.

ECONOMIC EVENTS: In the U.S., initial jobless claims rose 16,000 to 744,000 in the week ended April 3.

TOP NEWS: Production of some of Apple's ($AAPL) MacBooks and iPads has been postponed due to the global component shortage, The Nikkei Asia's Cheng Ting-Fang and Lauly Li reported. According to their sources, chip shortages have caused delays in a key step in MacBook production, while some iPad assembly was postponed because of a shortage of displays and display components.

Twitter ($TWTR) recently held discussions to acquire Clubhouse, the audio-driven social network, Katie Roof, Kurt Wagner and Scott Deveau of Bloomberg reported last night. The two parties reportedly discussed a potential valuation of approximately $4B. However, sources noted that talks have not continued and it has not been disclosed as to why they stopped.

Shares of GameStop ($GME) were in the spotlight on Thursday after the company said it intends to elect Chewy ($CHWY) co-founder Ryan Cohen as chairman. The shares initially moved higher following the board nomination announcements, but have pulled back to be down fractionally near noon.

In SPAC news, special purpose acquisition company Rice Acquisition ($RICE) announced last night an agreement to enter into a business combination with Aria Energy and Archaea Energy, which it says will create "the industry-leading renewable natural gas platform." Meanwhile, Bloomberg and Reuters each reported that sporting goods retailer Signa Sports United is in talks to go public through a merger with a SPAC. Signa is working with several banks on a potential transaction that could value the company at up to $4B and is in preliminary talks with SPACs including Yucaipa Acquisition Corp ($YAC), according to Reuters.

In White House news, U.S. President Joe Biden introduced a number of executive actions aiming to reduce gun violence in the wake of multiple recent mass shootings. The president has directed the U.S. Department of Justice to propose rules to stop the proliferation of so-called "ghost guns," clarify the point at which a stabilizing arm brace effectively turns a pistol into a rifle, and publish red-flag legislation to allow law enforcement or family members to ask a court to temporarily prohibit someone from accessing firearms under certain circumstances. In addition, Biden said that the U.S. should eliminated gun manufacturers from the immunity they received from Congress. Shares of gun manufacturers Smith & Wesson Brands ($SWBI) and Sturm Ruger ($RGR) ended the session lower following the announcements.

Meanwhile, Florida Attorney General Ashley Moody today filed legal action against the Biden administration and the U.S. Centers for Disease Control and Prevention "over the outdated federal shutdown order of the nation's cruise industry." Publicly traded companies in the cruise travel space include Carnival Corporation ($CCL), Royal Caribbean ($RCL), Norwegian Cruise Lines ($NCLH), Lindblad Expeditions ($LIND) and OneSpaWorld ($OSW).

Additionally, The Wall Street Journal reported that Netflix ($NFLX) has inked a multi-year deal with Sony Pictures Entertainment ($SNE) for domestic streaming rights to the studio's theatrical movies, including future "Spider-Man" films and other movies based on Marvel characters that Sony has the rights to.

MAJOR MOVERS: Among the noteworthy gainers was Orbcomm ($ORBC), which rose 52% after it agreed to be acquired by GI Partners for $11.50 per share in cash. Also higher was Par Technology ($PAR), which gained 25.5% after it acquired Punchh for roughly $500M in cash and stock.

Among the notable losers was Box ($BOX), which declined 9.4% after the company announced a $500M investment into the company led by KKR ($KKR). Also lower was GreenBox ($GBOX), which slid 7.4% after reaching final terms to acquire ChargeSavvy in a $12M transaction.

Reviewing Thursday's economic data:

  • Initial claims for the week ending April 3 increased 16,000 to 744,000 ( consensus 678,000). Continuing claims for the week ending March 27 decreased 16,000 to 3.734 million.
    • The key takeaway from the report is that it is disappointing labor market data that will convince the Fed that it needs to be patient before removing policy accommodation.

  • Russell 2000 +13.6% YTD
  • Dow Jones Industrial Average +9.5% YTD
  • S&P 500 +9.1% YTD
  • Nasdaq Composite +7.3% YTD

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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