Stocks rebounded to end a two-day 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, Health & Human Services Secretary Alex Azar said that no new cases of Wuhan coronoavirus have been found in the U.S. and the number of confirmed cases remains at five. A trio of Dow members reported this morning and the biggest of the blue chips - Apple (AAPL) - is set to report results tonight and almost certainly set the tone for trading tomorrow.
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) fell 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) shares slipped 5.7% after the company 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.
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 rose 1.2% after the news.
In M&A news, Delphi Technologies (DLPH) surged 59.8% 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.
Travel-related companies continue to respond to elevated fears surrounding the Wuhan outbreak of coronavirus. While CNBC's Eamon Javers reported earlier that the White House is considering restrictions on China travel, Bloomberg reported that United Airlines (UAL) plans to suspend certain China flights starting February 1. Meanwhile, Carnival (CCL) disclosed in a regulatory filing that it has suspended cruise operations from Chinese ports until February 4.
MAJOR MOVERS: Among the noteworthy gainers was Acceleron (XLRN), which rose 50.2% after announcing its sotatercept trial met its primary and secondary endpoints. Also higher was Xerox (XRX), which gained almost 5% after reporting quarterly results.
Among the notable losers was Grand Canyon Education (LOPE), which fell 8.1% after Citron Research said that the company is "illegally putting expenses in a captive subsidiary" to boost its reported results. Also lower was Intelsat (I), which slid 7.8% after Multichannel reported that a potentially final version of a Senate measure mandating a public auction of C-Band satellite spectrum for 5G has been introduced and includes $5B to relocate incumbent users, including satellite service providers.
INDEXES: The Dow rose 187.05, or 0.66%, to 28,722.85, the Nasdaq gained 130.37, or 1.43%, to 9,269.68, and the S&P 500 advanced 32.61, or 1.01%, to 3,276.24.
Pfizer
-2.06 (-5.13%)
3M
-10.14 (-5.77%)
UTX
+
Delphi Technologies
+5.87 (+59.96%)
BorgWarner
-2.97 (-7.74%)
United Airlines
-0.65 (-0.84%)
Carnival
+1.21 (+2.67%)
Acceleron
+26.39 (+49.95%)
Xerox
+1.665 (+4.74%)
Grand Canyon
-7.37 (-8.06%)
Intelsat
-0.47 (-7.99%)