On The Fly: Top stock stories at midday
Stocks began the session in positive territory on the heels of an interview with Treasury Secretary Steven Mnuchin on CNBC prior to the open. He asserted the Trump administration is dedicated to tax reform, including simplification of the tax code and cuts for the middle class. The market opened higher, putting the Dow on course for its first ten-day win streak in more than 20 years. While the Dow remains in the green near noon, the Nasdaq is down about 0.5% while the S&P is barely changed on the day. ECONOMIC EVENTS: In the U.S., Treasury Secretary Mnuchin emphasized tax reform is on the way in a wide-ranging CNBC interview, with the timing goal of the August recess for reform. Initial jobless claims rose 6,000 to 244,000 in the week ended February 18 after rising 4,000 to 238,000 previously. The Chicago Fed National Activity Index fell to -0.05 in January after rising to 0.18 in December. The FHFA home price index rose 0.4% to 242.6 in December after rising 0.7% to 241.6 in November. Gas inventories showed an 89 billion cubic feet draw versus consensus of 81 billion cubic feet draw, while crude oil inventories showed a 564,000 build versus the consensus forecast for a 3.25M build. COMPANY NEWS: Shares of Tesla (TSLA) are down about 5% at midday after the electric car maker reported better than expected top line Q4 results but larger quarterly losses than the consensus forecast. JPMorgan analyst Ryan Brinkman called Tesla's Q4 results "mixed," with automotive revenue stronger than expected and gross margin weaker. The company's guidance for a $2.0-$2.5B capital outlay in just the first half of 2017 in order to prepare for the mid-year launch of the Model 3 may be giving investors pause, as Brinkman said this increases the likelihood of another equity capital raise over the near-term... On the other side of the earnings coin, HP Inc. (HPQ) has gained about 9% after the PC and printer maker posted better than expected results for the first quarter of its fiscal year... Shares of several infrastructure names are slipping following a report from Mike Allen and Jonathan Swan of Axios, citing Republican sources, that the new U.S. administration is planning to push off until next year its "massive" infrastructure bill for roads, airports and big projects. Among the publicly traded companies in the infrastructure sector slipping near noon are Steel Dynamics (STLD), AK Steel (AKS), U.S. Steel (X), Fluor (FLR), Granite Construction (GVA), Vulcan Materials (VMC), Quanta Services (PWR), Aecom (ACM), Jacobs Engineering (JEC), KBR (KBR), Chicago Bridge & Iron (CBI) and MasTec (MTZ). MAJOR MOVERS: Among the notable gainers was Carter's (CRI), which jumped 5% after the children's apparel maker reported better than expected quarterly results and raised its dividend by 12%. Also higher was Square (SQ), which rose nearly 15% after the payment system provider reported better than expected fourth quarter results and guidance. Among the noteworthy losers was L Brands (LB), which dropped 15% after the parent of Victoria's Secret gave a lower than expected profit forecast for the new fiscal year and said it expects to report a mid-to-high-teens percentage decrease in February comparable sales. Also lower following its earnings reports was Wayfair (W), which fell 3.5%. Additionally, NVIDIA (NVDA) shares are down about 9% after BMO Capital and Nomura downgraded the stock to Underperform and Reduce, respectively, citing valuation, competitive changes ahead and a slowdown in gaming. INDEXES: Near midday, the Dow was up 49.15, or 0.24%, to 20,824.75, the Nasdaq was down 25.34, or 0.43%, to 5,835.29, and the S&P 500 was up 1.36, or 0.06%, to 2,364.18.