Stocks end lower as COVID-19 cases continue to surge
The major averages gave back some gains on the heels of the Dow and S&P 500 hitting new highs yesterday. Post-earnings slides in Walmart and Home Depot did not help, although both mega-retailers beat consensus expectations on both of their top and bottom lines.
ECONOMIC EVENTS: In the U.S., retail sales edged up 0.3% and were up 0.2% excluding autos in October. Import prices dipped 0.1% in October and export prices increased 0.2%. Industrial production bounced 1.0% in October. The NAHB housing market index surged another 5 points to 90 in November, marking a third straight monthly record high. Business inventories climbed 0.7% in September and sales were 0.6% higher, both of which were better than forecast.
In stimulus news, CNBC reported that Senate Minority Leader Chuck Schumer said he and House Speaker Nancy Pelosi have not received communication from Senate Majority Leader Mitch McConnell in roughly two weeks since McConnell said he would take the lead for the Republicans in the next round of negotiations.
TOP NEWS: Shares of CVS Health (CVS), Walgreens Boots Alliance (WBA), Rite Aid (RAD), GoodRx (GDRX), Cigna (CI), UnitedHealth (UNH), McKesson (MCK), Cardinal Health (CAH), AmerisourceBergen (ABC) and other companies in the pharmacy supply chain all moved lower after Amazon (AMZN) announced two new pharmacy offerings. The new offerings include Amazon Pharmacy, a new store on Amazon, and an Amazon Prime prescription savings benefit.
Shares of Walmart (WMT) finished the day 2.2% lower despite the retailer reporting better than expected earnings and sales in the third quarter. U.S. comp sales were up 6.4% in the quarter, while Walmart U.S. e-commerce sales grew 79%, the company said.
In other earnings news, Home Depot (HD) shares fell 2.7% despite the company's own report of better than expected sales and profits in the third quarter. Comparable sales for Q3 were up 24.1%, and comparable sales in the U.S. were up 24.6%, in what chairman and CEO Craig Menear called "another exceptional quarter for The Home Depot."
Shares of Tesla (TSLA) gained 8.2% after news that the stock will be added to the S&P 500 effective prior to the open of trading on Monday, December 21 to coincide with the December quarterly rebalance.
Meanwhile, Warren Buffett's Berkshire Hathaway (BRK.A) disclosed in an SEC filing last night its holdings as of the end of the third quarter, noting that among its six new buys were several pharma giants, including AbbVie (ABBV), Merck (MRK), and Bristol-Myers Squibb (BMY).
In other large firm news, Soros Fund Management disclosed that it had taken a stake in Palantir (PLTR) in the quarter, though CNN Business' Paul La Monica reported that the firm intends to sell its 1% stake in the company.
MAJOR MOVERS: Among the noteworthy gainers was AXT Inc. (AXTI), which rose 23.3% after it agreed to merge two of its raw material companies into its wafer manufacturing company and announced it is raising capital in China as a step toward listing on the Shanghai STAR exchange. Also higher was Paramount Group (PGRE), which gained 13.7% after its board unanimously rejected an unsolicited proposal from Bow Street to acquire all of the company's outstanding shares for between $9.50 and $10 per share in cash.
Among the notable losers was BrainStorm (BCLI), which declined 66.3% after the company's Phase 3 trial of NurOwn did not reach statistically significant results. Also lower was Gan Limited (GAN), which fell 10.7% after it reported quarterly results and agreed to acquire Coolbet for EUR149.1M.
INDEXES: The Dow fell 167.09, or 0.56%, to 29,783.35, the Nasdaq lost 24.79, or 0.21%, to 11,899.34, and the S&P 500 declined 17.38, or 0.48%, to 3,609.53.