Stocks end little changed as lawmakers fail to reach stimulus compromise
Stocks were a bit lower at midday amid continued uncertainty on the prospects for another aid bill from Washington. Speaker of the House Nancy Pelosi said this morning on Twitter that she and fellow Democrats "remain committed to continue negotiating and reaching a fair agreement," but "will not go along with the meager legislative proposals that fail to address" the situation the country faces. Stocks gained some downside momentum in the afternoon as it became clear that lawmakers had reached an impasse, though the Dow and S&P were able to shake off the worries about additional aid to end in the green.
ECONOMIC EVENTS: In the U.S., nonfarm payrolls increased 1.76M in July and the unemployment rate dipped to 10.2% from 11.1% in the prior month. Wholesale inventories dropped 1.4% in June, with sales jumping 8.8%. In energy news, Baker Hughes reported that the U.S. rig count is down 4 from last week at 247.
In COVID-19 news, Florida reported 518,075 cases of the virus, up from 510,389 yesterday. Arizona reported a day-to-day increase of 1,406 cases, while California reported an increase of 8,436. Meanwhile, New York Governor Andrew Cuomo said that every school district in every region in the state has been reauthorized to reopen in the fall.
Fox Business' Charles Gasparino reported that President Donald Trump could issue his executive order as early as tonight as talks between Democrats and Republican lawmakers "have broke down." Later reports confirmed that COVID-19 stimulus talks between Democratic leaders in Congress and the White House halted after both parties failed to bridge a gap in the funds they wish to give out in pandemic aid.
TOP NEWS: Last night, President Donald Trump issued an executive order banning ByteDance's TikTok and Tencent's (TCEHY) WeChat in the U.S., saying "the spread in the United States of mobile applications developed and owned by companies in the People's Republic of China continues to threaten the national security, foreign policy, and economy of the United States." In response, TikTok, which is in deal talks with Microsoft (MSFT), said that it is "shocked" by the recent executive order, which the company claims "was issued without any due process." Meanwhile, the New York Times reported that TikTok is in discussions with at least three American companies, including Microsoft, regarding a potential acquisition of its business.
On the earnings front, Uber (UBER) shares fell 5.2% after the ride-hailing giant reported downbeat quarterly results. The company said it had 55M monthly active platform consumers during the quarter, down from 99M in the same period last year. On its quarterly call, Uber added that it expects its third quarter adjusted EBITDA loss to be in line with that of Q2, and that reopening in the U.S. has been uneven.
Shares of Groupon (GRPN) surged 56.7% higher after the company reported better than expected second quarter results. Of note, the company said on its quarterly call that it expects to realize roughly $140M in savings from cost restructuring and furloughs.
In addition, Booking (BKNG) shares were fractionally higher after the company reported better than expected quarterly results, with CEO Glenn Fogel saying that booking trends have been improving since April.
In other news, Biogen (BIIB) shares jumped 10.1% after the company and Eisai (ESALY) announced that the FDA accepted the Biologics License Application for aducanumab, an investigational treatment for Alzheimer's disease, for a priority review. The treatment was assigned a PDUFA target action date of March 7, 2021, the companies said.
Meanwhile, IntercontinentalExchange (ICE) announced last night that it has entered into a definitive agreement to acquire Ellie Mae. The transaction with Ellie Mae, a portfolio company of private equity investment firm Thoma Bravo, values Ellie Mae at approximately $11B.
MAJOR MOVERS: Among the noteworthy gainers was Sirius International Insurance Group (SG), which rose 45.4% after it agreed to combine with Third Point Re (TPRE) in a $788M cash and stock deal. Zillow (ZG) rose 11.6%, TrueCar (TRUE) gained 27.7%, and T-Mobile (TMUS) advanced 6.5% after reporting quarterly results.
Evoqua Water (AQUA) slid 3% after its 8M share spot secondary offering priced at $20.75 per share. Also lower were Alteryx (AYX), Illumina (ILMN), and Funko (FNKO), which fell 28.1%, 10.9% and 12.4%, respectively, after reporting quarterly results.
INDEXES: The Dow rose 46.50, or 0.17%, to 27,433.48, the Nasdaq lost 97.09, or 0.87%, to 11,010.98, and the S&P 500 advanced 2.12, or 0.063%, to 3,351.28.