Stocks start December with further gains after strong November
The major averages are picking up on November's strength after a slight pullback yesterday to close out a month that was still incredibly strong in terms of the market's advance. December is off on the right foot with the major averages up over 1% across the board at midday of the first day of the month.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing index was unchanged at 56.7 in the final November print versus the preliminary reading. The ISM manufacturing index slid 1.8 points to 57.5 in November, as expected. Construction spending jumped 1.3% in October, which was stronger than expected.
In prepared remarks for the Senate Committee on Banking, Housing, and Urban Affairs, Federal Reserve Chair Jay Powell said: "Economic activity has continued to recover from its depressed second-quarter level. The reopening of the economy led to a rapid rebound in activity, and real gross domestic product, or GDP, rose at an annual rate of 33 percent in the third quarter. In recent months, however, the pace of improvement has moderated... Recent news on the vaccine front is very positive for the medium term. For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups."
TOP NEWS: Shares of Zoom Video (ZM) are 14% lower near noon despite the company reporting Q3 results and Q4 guidance that Piper Sandler analyst James Fish described as "strong against Street expectations." The share weakness may be related to higher investor expectations, the upside being primarily driven from commercial, and an elevated valuation, Fish contends. While Zoom Video reported "very strong" Q3 results last night on an absolute basis, William Blair analyst Bhavan Suri estimates that buy-side expectations for revenue were in the ballpark of $800M, compared to the company's performance of roughly $777M.
Micron Technology (MU) rallied this morning after the company increased its outlook for fiscal Q1, which ends on December 3, ahead of CEO Sanjay Mehrotra's presentation today at the Credit Suisse Annual Technology Conference. During the event, Mehrotra said the company has seen strength "pretty much across the board" and added that he thinks the need for more memory and storage will broaden post-pandemic.
In other guidance news, UnitedHealth (UNH) raised its FY20 adjusted EPS view to approach $16.75, from $16.50-$16.75, as the insurer issued an updated 2020 outlook and its initial view of 2021 ahead of its annual Investor Conference with analysts and institutional investors taking place virtually today.
MAJOR MOVERS: Among the noteworthy gainers was BlackBerry (BB), which jumped 56% after the company and Amazon Web Services (AMZN) announced a deal to develop BlackBerry's Intelligent Vehicle Data platform.
Also higher was Virgin Galactic (SPCE), which rose 7% after it was awarded a NASA base contract for flight and integration services.
Among the notable losers was Nikola (NKLA), which declined 15%, adding to yesterday's losses after Deutsche Bank analyst Emmanuel Rosner said he views the revised General Motors (GM) partnership as "particularly negative" for Nikola shares.
Also lower was Momo (MOMO), which fell about 5% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 248.80, or 0.84%, to 29,887.44, the Nasdaq was up 170.80, or 1.40%, to 12,369.54, and the S&P 500 was up 45.85, or 1.27%, to 3,667.48.