Stocks are rebounding a day after the sharp selloff that was attributed to fears about the new strain of coronavirus spreading in China. While Hong Kong announced restrictions on cross-border travel with mainland China in a bid to contain the virus, Health & Human Services Secretary Alex Azar said in a press conference from Washington that no new cases of Wuhan coronoavirus have been found in the U.S. and the number of confirmed cases remains at five. Earnings volume is picking up markedly with a trio of Dow members having reported this morning and the biggest of the blue chips, Apple (AAPL), announcing results after the market close.
ECONOMIC EVENTS: In the U.S., durable goods orders rebounded 2.4% in December, which was much stronger than expected. The Conference Board's consumer confidence index jumped 3.4 points to 131.6 in January, which was also much better than expected. Case-Shiller's 20-city home price index rose 0.12% to 218.7 for November. The Richmond Fed's manufacturing index surged 25 points to 20 in January.
TOP NEWS: Shares of Pfizer (PFE) have fallen nearly 5% after the drugmaker reported better than expected sales but lower than expected earnings for the fourth quarter. The mid-point of the pharmaceutical giant's fiscal year earnings outlook range also trailed the consensus forecast.
3M (MMM) reported worse than expected adjusted earnings, which included a restructuring charge that it said may not have been factored into analysts' estimates. The charge was related to the chemicals giant having initiated a restructuring that will reduce approximately 1,500 positions, spanning all business groups, functions and geographies. 3M shares have fallen over 5% following the earnings and job cuts news.
United Technologies (UTX) reported fourth quarter earnings and revenue that beat consensus forecasts. In terms of guidance, United Tech said that the outlook for sales, adjusted EPS and free cash flow for Raytheon Technologies will be provided after the merger closes. The outlooks for Carrier and Otis will be provided in conjunction with their upcoming pre-spin investor meetings scheduled for February, the company added. United Tech shares are up nearly 2% at midday.
In M&A news, Delphi Technologies (DLPH) has surged 60% higher after announcing a deal under which BorgWarner (BWA) will acquire the company in an all-stock transaction that sets Delphi's enterprise value at approximately $3.3B. BorgWarner shares are down 8% following the deal announcement.
MAJOR MOVERS: Among the noteworthy gainers was Acceleron (XLRN), which rose 42% after announcing its sotatercept trial met its primary and secondary endpoints. Also higher was Laureate Education (LAUR), which gained 15% after announcing plans to explore strategic alternatives and reaffirming its fourth quarter and fiscal 2019 guidance.
Among the notable losers was Grand Canyon Education (LOPE), which fell 7% after Citron Research said that the company is "illegally putting expenses in a captive subsidiary" to boost its reported results. Also lower was McCormick (MKC), which slid 3% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 225.20, or 0.79%, to 28,761.00, the Nasdaq was up 128.24, or 1.40%, to 9,267.55, and the S&P 500 was up 35.09, or 1.08%, to 3,278.72.
Pfizer
-1.76 (-4.38%)
3M
-10.04 (-5.71%)
UTX
+
Delphi Technologies
+5.78 (+59.04%)
BorgWarner
-3.29 (-8.57%)
Acceleron
+22.22 (+42.06%)
Laureate Education
+2.62 (+14.80%)
Grand Canyon
-6.075 (-6.64%)
McCormick
-5.54 (-3.21%)