Stocks held up relatively well considering the Trump administration announced export restrictions designed to cut off Huawei Technologies from overseas suppliers and both retail sales and industrial production saw record monthly declines. The move against the Chinese telecom-equipment maker threatens to ignite a new round of U.S.-China tensions, with the Editor-in-chief of a state-run paper tweeting that China could respond by restricting or investigating U.S. companies "such as Qualcomm, Cisco and Apple," or suspending the purchase of Boeing airplanes.
ECONOMIC EVENTS: In U.S. data, retail sales plummeted another 16.4% in April, and dropped 17.2% excluding autos. The Empire State manufacturing index improved 29.7 points to -48.5 in May following a drop to an historic low of -78.2 in April. Industrial production dropped 11.2% in April, which was not quite as bad as forecast but still the steepest decline on record. Business inventories fell 0.2% in March, as forecast. Consumer sentiment inched up 1.9 points to 73.7 in the preliminary report from the University of Michigan survey, which was a little better than expected. In energy news, Baker Hughes reported that the U.S. rig count is down 35 rigs from last week to 339, with oil rigs down 34 to 258.
In COVID-19 news, New York Governor Andrew Cuomo reported 132 virus deaths in the state yesterday versus 157 deaths the day before.
TOP NEWS: Shares of Applied Materials (AMAT) were rising following last night's fiscal Q2 report from the company until the U.S. announced plans "to protect U.S. national security" by restricting Huawei's ability to use U.S. technology and software to design and manufacture its semiconductors abroad. The stock closed 4.4% lower.
That news, which also sent shares of Applied's chipmaking equipment supplier peers KLA-Tencor (KLAC) and Lam Research (LRCX) lower, was a drag on Taiwan's TSMC (TSM) too. The major producer of chips for Huawei's HiSilicon unit announced separately that it intends to build and operate an advanced semiconductor fab in the United States with the mutual understanding and commitment to support from the U.S. federal government and the State of Arizona.
Shares of Sorrento Therapeutics (SRNE) surged 158% to close at $6.76 after the company claimed to have discovered an antibody that could shield the human body from the coronavirus and flush it out of a person's system within four days. Following the news, STAT's Adam Feuerstein said in a tweet that Sorrento "blitzed reporters earlier this week with embargoed pitches for today's nonsense news announcement. My email arrived Tuesday. I was ignored it bc the pitch was dumb. Fox bit, apparently."
Meanwhile, the FDA is alerting the public to early data that suggest potential inaccurate results from using the Abbott (ABT) ID NOW point-of-care test to diagnose COVID-19. In response, the company said it is "seeing studies being conducted to understand the role of ID NOW in ways that it was not designed to be used. In particular, the NYU study results are not consistent with other studies." Abbott intends to change the directions for using its ID Now COVID-19 test for a second time, Christopher Weaver of The Wall Street Journal noted following the FDA alert.
Facebook (FB) announced that visual expression company GIPHY is joining its Instagram team. While the company did not announce terms of the deal, Axios reported that it has learned "from multiple sources" that the total deal value is around $400M and that Giphy is expected to retain its own branding.
On the earnings front, DraftKings (DKNG) shares jumped 15.5% after its first quarterly earnings report as a publicly traded company. Following the report, Canaccord analyst Michael Graham raised his price target on the stock to $35 from $25.
In addition, shares of Sarepta (SRPT) were 11.2% higher after Pfizer (PFE) announced "encouraging" updated preliminary data on an investigational gene therapy being developed to treat Duchenne muscular dystrophy, or DMD. Following the news, analysts at H.C. Wainwright, JPMorgan, and William Blair maintained bullish stances on Sarepta, with JPMorgan's Anupam Rama saying the company is in the pole position in the micro-dystrophin DMD space.
MAJOR MOVERS: Among the noteworthy gainers was McKesson (MCK), which rose 5.4% after UBS analyst Kevin Caliendo upgraded the stock to Buy from Neutral and after Gordon Haskett's Don Bilson noted possible signs of activism at the company. Also higher were Aurora Cannabis (ACB) and Dillard's (DDS), which gained a respective 69.4% and 12% after reporting quarterly results.
Among the notable losers was Canada Goose (GOOS), which slid over 7% in New York trading after BofA analyst Robert Ohmes downgraded the stock to Underperform from Neutral, saying he anticipates significant annual declines in North America and Europe revenues amid restrained international tourism that should persist "at least through year end." Also lower was Co-Diagnostics (CODX), which fell 22.9% after reporting quarterly results and saying that its COVID-19 test demonstrated "excellent performance."
INDEXES: The Dow rose 60.08, or 0.25%, to 23,685.42, the Nasdaq gained 70.84, or 0.79%, to 9,014.56, and the S&P 500 advanced 11.20, or 0.39%%, to 2,863.70.
Applied Materials
-2.49 (-4.57%)
KLA Corp.
-8.71 (-4.95%)
Lam Research
-17.35 (-6.45%)
TSMC
-2.27 (-4.36%)
Sorrento Therapeutics
+4.085 (+155.62%)
Abbott
-1.845 (-2.01%)
Ticker changed to META
+4.29 (+2.08%)
DraftKings
+3.915 (+15.48%)
Sarepta
+14.04 (+11.04%)
Pfizer
-0.15 (-0.40%)
McKesson
+7.3 (+5.65%)
Aurora Cannabis
+4.25 (+64.30%)
Dillard's
+2.89 (+12.60%)
Canada Goose
-1.47 (-7.11%)
Co-Diagnostics
-5.18 (-23.34%)