Stocks halt slide following steep virus-fueled pullback
Stocks were bouncing back and had held their gains through the morning, which had been a change compared to yesterday when the CDC's warnings about its expectations for the coronavirus to spread in the U.S. added to the worries that the outbreak will have a longer lasting, and deeper, impact on the U.S. and global economy. The averages were on pace to break their run of daily losses despite a report that a test conducted by the Brazilian government confirmed the first case of the new coronavirus documented in Latin America and President Trump having tweeted that he will be holding a coronavirus news conference at the White House after the market close today. However, the Dow briefly erased its gains after having been up as much s 1.7% earlier in the session, then reversed again and it tentatively higher at time of writing.
ECONOMIC EVENTS: In the U.S., new home sales beat estimates with a 7.9% January surge to a new 12-year high annualized rate of 764,000 homes.
TOP NEWS: While Bob Iger had been expected to step down as CEO of Disney (DIS) by the end of his contract in 2021, the company's announcement last night that Bob Chapek will take over as CEO immediately and Iger will assume the role of Executive Chairman came sooner than expected, Citi analyst Jason Bazinet said following the news. Iger, who will now direct the company's creative endeavors, said that it is the "right time" for the company to transition to a new CEO and that he is "certain" the company's portfolio of businesses will continue to serve shareholders well under new leadership.
A number of Wall Street analysts have raised their price targets on Salesforce (CRM) shares following what many described as "strong" Q4 results. However, Stifel analyst Tom Roderick said the "unexpected nature" of the company's concurrent announcements that co-CEO Keith Block is stepping down and Salesforce will acquire long-time partner Vlocity was "the primary culprit" behind the muted response to the financial report.
In other earnings news, Lowe's (LOW) posted a mixed Q4 report, with better than expected earnings and lower than expected sales. In a flash reaction note, Baird analyst Peter Benedict said comps were lighter than expected but margins improved and enhanced execution drove the earnings to beat his expectations. He remains a buyer of Lowe's shares following the Q4 results, contending that the company's growth rate is compelling relative to the stock's modest valuation.
MAJOR MOVERS: Among the noteworthy gainers was Beyond Meat (BYND), which rose 4% after Starbucks (SBUX) anounced that the company will introduce a new Beyond Meat, Cheddar and Egg Sandwich to its Canadian stores.
Also higher were B&G Foods (BGS) and TJX Companies (TJX), which gained a respective 17% and 8% after reporting quarterly results.
Among the notable losers was Sabre (SABR), which slid 17% after it reported quarterly results and provided guidance for fiscal 2020.
Also lower after reporting quarterly results were SmileDirectClub (SDC) and Dycom (DY), which fell 26% and 23%, respectively.
INDEXES: In early afternoon trading, the Dow was up 61.52, or 0.23%, to 27,142.88, the Nasdaq was up 60.07, or 0.67%, to 9,025.69, and the S&P 500 was up 8.44, or 0.27%, to 3,136.65.