Stocks advance from record highs after U.S. data, ECB announcement
Stocks on Wall Street continued their advance after having rallied to fresh record highs yesterday on a combination of upbeat earnings and expectations that vaccines, government stimulus and the Fed's commitment to maintain extraordinary accommodation can help the economy rebound later this year. Meanwhile the ECB, like its U.S. counterpart, promised to keep up its "very accommodative monetary policy stance."
ECONOMIC EVENTS: In the U.S., initial jobless claims fell 26,000 to 900,000 in the week ended January 16. Housing starts sharply beat estimates with a 5.8% December rise to a 14-year high pace of 1.67M, while building permits rose by 4.5% to a 14-year high rate of 1.71M. The Philly Fed manufacturing index rebounded to 17.4 points to 26.5 in January, which was much stronger than expected and represents an 11-month high.
In Europe, the ECB stated its Governing Council has "decided to reconfirm its very accommodative monetary policy stance." In addition to its key interest rates remaining unchanged at low, or negative, levels, the ECB said it will continue purchases under the pandemic emergency purchase and asset purchase programs.
TOP NEWS: Shares of United Airlines (UAL) fell 5.7% after the company's revenue missed expectations in the fourth quarter and its losses were steeper than forecast. While accelerated distribution of the COVID-19 vaccine "may lead to faster improvement," the company is "not including this potential improvement in its first quarter 2021 revenue outlook," said United, which sees its first quarter operating revenue to be down 65%-70% and expects capacity to be down at least 51% versus the first quarter of 2019.
In other earnings news, Travelers (TRV) shares rose 2.5% after the property-casualty insurer and Dow Jones Industrial Average member reported better than expected core earnings per share.
In COVID-19 news, Eli Lilly (LLY) announced that bamlanivimab, or LY-CoV555, significantly reduced the risk of contracting symptomatic COVID-19 among residents and staff of long-term care facilities in a Phase 3 trial. Bamlanivimab is a human antibody discovered by AbCellera (ABCL) and developed with Eli Lilly.
Meanwhile, Corteva (CTVA) finished 4.6% lower after the company confirmed that it received notice from Starboard Value, one of its largest shareholders, of the firm's intent to nominate individuals to stand for election to Corteva's board of directors at the company's upcoming 2021 annual meeting of stockholders. The announcement follows a report from The Wall Street Journal saying that Starboard wants to oust Corteva CEO Jim Collins.
Additionally, shares of CoreLogic (CLGX) were 1.4% higher after Bloomberg reported that CoStar Group (CSGP) and a private equity consortium led by Warburg Pincus are the finalists competing to acquire CoreLogic.
MAJOR MOVERS: Among the noteworthy gainers was Diebold (DBD), which rose 16.6% after JPMorgan analyst Paul Chung upgraded the stock to Overweight from Neutral. Also higher was TAL Education (TAL), which gained over 15% after reporting quarterly results. In addition, shares of Under Armour (UAA) rose fractionally after Deutsche Bank analyst Paul Trussell upgraded the stock to Buy as he expects benefits from multiple years of resetting the cost base, improving inventory control and pricing, and altering the distribution mix.
Among the notable losers was Dyne Therapeutics (DYN), which declined 25.5% after its 6M share secondary offering priced at $28 per share. Also lower was INmune Bio (INMB), which fell 19% after announcing that results from a Phase 1b study demonstrate that XPro1595, an investigational dominant-negative protein that neutralizes soluble TNF, decreases biomarkers of neuroinflammation across multiple measures and assays in patients with Alzheimer's disease.
INDEXES: The Dow fell 12.37, or 0.04%, to 31,176.01, the Nasdaq gained 73.67, or 0.55%, to 13,530.92, and the S&P 500 advanced 1.22, or 0.03%, to 3,853.07.