Stocks slide as tech gets routed, Treasury yields climb
Equity futures were broadly weaker ahead of early data releases amid a run up in yields, though they bounced from their lows as the mostly better than expected run of economic data knocked Treasury yields from opening highs. However, the weakness seen in stocks resumed and picked up momentum during the trading day, leaving the major averages sharply lower.
ECONOMIC EVENTS: In the U.S., Q4 GDP was revised up to a 4.1% growth rate from 4.0%, though this was not quite as high a bump up as was expected. Initial jobless claims plunged 111,000 to 730,000 in the week of February 20. Durable goods orders surged 3.4% in January. An index of pending home sales dropped 2.8% to 122.8 in January.
TOP NEWS: Shares of Nvidia (NVDA) closed 8.2% lower despite the many Wall Street analysts raising their price targets on the stock following last night's earnings report from the company. Jefferies analyst Mark Lipacis noted that Nvidia shares traded lower despite its January quarter EPS and its April quarter EPS outlook beating consensus, which he thinks is due to concerns that Crypto is driving gaming upside and because data center revenue was flattish quarter-over-quarter. However, he believes that data center is in a "digestion period," and notes that the last digestion period was a good buying opportunity.
In other earnings news, shares of Best Buy (BBY) fell 9.3% after the home electronics retailer's mixed report. While earnings beat the consensus forecast, revenue fell short as Best Buy reported Q4 enterprise comparable sales that rose 12.6% compared to the same period of last year.
In M&A news, Merck (MRK) and Pandion Therapeutics (PAND) announced that the companies have entered into a definitive agreement under which Merck will acquire Pandion, a clinical-stage biotechnology company developing novel therapeutics designed to address the unmet needs of patients living with autoimmune diseases, for $60 per share in cash. This represents an approximate total equity value of $1.85B.
Twitter (TWTR) shares gained 3.7% after the microblogging service operator held its analyst day meeting. In advance of the event, the company announced some long-term goals, including plans to at least double total annual revenue from $3.7B in 2020 to $7.5B or more in 2023. In addition, Twitter said it plans to reach at least 315M monthly daily active users in Q4 of 2023, which represents a 20% compound annual growth rate from the base of 152M mDAU reported in Q4 of 2019.
MAJOR MOVERS: Among the noteworthy gainers were Revolve Group (RVLV) and SeaWorld (SEAS), which rose 9.4% and 11.1%, respectively, after reporting earnings.
Among the notable losers were Teladoc (TDOC), Papa John's (PZZA) and Domino's Pizza (DPZ), which fell 13.5%, 11.6% and 7%, respectively, after reporting earnings.
INDEXES: The Dow lost 559.85, or 1.75%, to 31,402.01, the Nasdaq fell 478.53, or 3.52%, to 13,119.43, and the S&P 500 declined 96.09, or 2.45%, to 3,829.34.