Stocks are higher after China took new measures to support its economy in the face of the ongoing coronavirus crisis. The Ministry of Industry and Information Technology said the government would connect factories with technology companies to identify weak links in their supply chains and Bloomberg reported that China may consider possible bail-outs for industries hard-hit by the coronavirus outbreak that continues to plague the country. While the coronavirus has now sickened over 75,000 people, mostly in China, and killed more than 2,000, reports have indicated that the pace of new cases in the key region of Hubei may have slowed. Meanwhile, a U.S. inflation figure came in hotter than expected, which may be viewed as encouraging news.
ECONOMIC EVENTS: In the U.S., the Producer Prices Index jumped a surprising 0.5% in January for both the headline and core readings. Housing starts fell back 3.6% in January to a 1.567M annualized pace that beat estimates.
TOP NEWS: Shares of Groupon (GRPN) are down 39% at midday after the company reported lower than expected fourth quarter results and announced plans to exit its Goods category and focus on its local experiences marketplace following a comprehensive review of strategic alternatives. Groupon CEO Rich Williams, in a letter to shareholders, said he was "incredibly disappointed" with the company's 2019 performance and explained that "Goods has outlived its role as a business driver and has become a significant drag on our business."
In M&A news, Ally Financial (ALLY) announced that it has entered into an agreement to acquire privately held CardWorks in a transaction valued at approximately $2.65B, made up of approximately $1.35B in cash and $1.3B in Ally common stock. Ally shares are down 11% following the deal for the credit card platform operator.
MAJOR MOVERS: Among the noteworthy gainers was Tesla (TSLA), which rose 8% after Piper Sandler analyst Alexander Potter raised the firm's price target on the stock to $928 from $729 and kept an Overweight rating on the shares. The analyst says that in order to gauge Tesla's chances of success at storing one's own solar power, he recently installed a solar system to use for charging a Model X. Also higher were Enphase Energy (ENPH) and Garmin (GRMN), which gained a respective 37% and 7.5% after reporting quarterly results.
Among the notable losers was Blue Apron (APRN), which dropped 20% after it reported quarterly results and announced that it will evaluate strategic alternatives. Also lower after reporting quarterly results were Scientific Games (SGMS) and LendingClub (LC), which fell 20% and 4%, respectively.
INDEXES: Near midday, the Dow was up 156.29, or 0.53%, to 29,388.48, the Nasdaq was up 91.01, or 0.94%, to 9,823.76, and the S&P 500 was up 19.97, or 0.59%, to 3,390.26.
Tesla
+69.61 (+8.11%)
Groupon
-1.205 (-39.90%)
Ally Financial
-3.65 (-11.40%)
Enphase Energy
+14.55 (+36.24%)
Garmin
+7.12 (+7.32%)
Blue Apron
-0.93 (-21.28%)
Scientific Games
-5.73 (-19.52%)
LendingClub
-0.445 (-3.36%)