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End of Day Briefing - Recap of Thursday Feb. 11, 2021

Stocks are mostly up as the Nasdaq closes at record high, jobless claims decline in U.S.

Equity futures were modestly firmer in cautious early trading and the major averages close out not far from where they ended yesterday following a mixed session. While earnings remain upbeat, and the initial claims report was taken in stride, still elevated jobless claims levels are consistent with a very difficult labor market that in turn underpins expectations for steady Fed policy and the passage of another stimulus package.

ECONOMIC EVENTS: In the U.S., initial jobless claims declined 19,000 to 793,000 in the week ended February 6.

TOP NEWS: Uber ($UBER) shares were 3.9% lower after the ride-hailing giant reported fourth quarter results last night, with losses per share slightly beating consensus estimates and revenue coming out lower than expected. The company also noted that gross bookings in the quarter grew 16% sequentially but fell 5% year-over-year.

Shares of PepsiCo ($PEP) dipped 2% after the beverage and snack giant reported better than expected quarterly results, with CEO Ramon Laguarta saying the company ended 2020 "on a strong note" as its global beverage business accelerated while its global snacks and food business "remained resilient." Looking ahead, the company sees FY21 core earnings per share in constant currency growing in the high-single digits.

In other earnings news, Zillow Class A ($ZG) shares surged 16.8% after the company reported better than expected revenue for Q4 and gave upbeat revenue guidance for Q1. In addition, the company announced that it has agreed to acquire, an online scheduling platform for home showings, for $500M.

On the M&A front, Sandoz, a Novartis ($NVS) unit, signed an agreement to acquire GlaxoSmithKline's ($GSK) cephalosporin antibiotics business. The agreement includes the global rights to three established brands - Zinnat, Zinacef and Fortum - in more than 100 markets. Sandoz will pay GSK $350M at closing, plus additional milestone payments of up to $150M, subject to the terms of the transaction.

In other M&A news, Kraft Heinz ($KHC) announced an agreement to sell its nuts business to Hormel Foods ($HRL) in a cash transaction for $3.35B. The acquisition includes the Planters, NUT-rition, Planters Cheez Balls and Corn Nuts brands.

Meanwhile, The Wall Street Journal reported that Alden Global Capital, Tribune Publishing's ($TPCO) largest shareholder with a 32% stake, is discussing a deal with the company to buy the shares it doesn't already own.

Additionally, dating app operator Bumble ($BMBL) opened at $76 per share in their first day of trading after the initial public offering was originally priced at $43. As of the close, Bumble shares were trading at around $70.31.

MAJOR MOVERS: Among the noteworthy gainers was Pinterest ($PINS), which gained over 7% after The Financial Times' James Fontanella-Khan, Richard Waters, Hannah Murphy, and Arash Massoudi reported that Microsoft ($MSFT) made an offer to acquire the social sharing company in recent months. Talks are not active right now , one of the people briefed on the matter said, according to FT's report. Also higher was Tempur Sealy ($TPX), which gained 9.3% after reporting quarterly results.

Among the notable losers was GameStop ($GME), which declined fractionally after The Wall Street Journal reported that the U.S. Justice Department's fraud section and the San Francisco U.S. attorney's office have sought information to determine whether market manipulation or other types of misconduct fueled the trading frenzy that drove the rapid rise last month in shares of the video game retailer. Also lower was Fluidigm ($FLDM), which fell 21% after reporting quarterly results.

Reviewing Thursday's economic data:

  • Initial claims decreased by 19,000 to 793,000 ( consensus 750,000) in the week ending February 6 following an upward revision to 812,000 (from 779,000) for the prior week. Continuing claims for the week ending January 30 decreased by 145,000 to 4.545 million following an upward revision to 4.690 million (from 4.592 million) for the prior week.
    • The key takeaway from the report is unchanged: the labor market is not in a good place and that will necessitate additional stimulus measures.

  • Russell 2000 +15.6% YTD
  • Nasdaq Composite +8.8% YTD
  • S&P 500 +4.3% YTD
  • Dow Jones Industrial Average +2.7% YTD

Market Snapshot
SP 5003916.38+6.50(0.17%)
10-yr Note +2/321.139
NYSEAdv 1477 Dec 1719 Vol 1.0 bln
NasdaqAdv 1768 Dec 2199 Vol 10.7 bln

Industry Watch
Strong: Information Technology, Health Care, Materials
Weak: Energy, Utilities, Consumer Staples

Moving the Market

-- Nasdaq closes at record high in range-bound session

-- Relative strength in technology stocks, energy stocks underperformed

-- Market remained resilient to selling pressure

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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