Stocks looked set in pre-market trading for a big bounce after yesterday's steep selloff. The averages saw their highs at the open but the buy-the-dip enthusiasm faded as the market bled lower throughout the morning. By the early afternoon the averages all turned red, but from there enough buying resumed to see the indexes close in the green across the board, though well off their early levels.
ECONOMIC EVENTS: In the U.S., import prices rose 1.0% in May, while export prices rose 0.5%. The preliminary June print for the University of Michigan consumer sentiment survey pointed to a jump of 6.6 points to 78.9 from a 72.3 reading in May.
In COVID-19 news, the CDC's Deputy Director for Infectious Diseases, Jay Butler, told reporters during a press briefing that states may need to reinstate strict social distancing measures if U.S. coronavirus cases rise "dramatically," reported CNBC.
TOP NEWS: Shares of Tesla (TSLA) dropped 3.9% on Friday after the stock was downgraded to Underweight at Morgan Stanley, citing several factors including China risks and near-term demand pressure. The electric carmaker's stock was also downgraded at Goldman Sachs to Neutral just days after Tesla hit $1,000 per share for the first time.
Shares of Adobe (ADBE) gained 4.9% after the company's quarterly earnings report prompted a number of target hikes around Wall Street. Among those who raised their price targets, Jefferies analyst Brent Thill said Adobe software is proving critical for online content, paperless workflows, and digital customer experiences in the current work-from-home and shelter-in-place environment.
Shares of Lululemon (LULU) did not react as well to the company's earnings report, sliding 3.8% on Friday. MKM Partners analyst Roxanne Meyer was among those who kept her Buy rating on Lululemon after its Q1 results, saying she remains confident in its recovery and recommends investors buy shares on the pullback.
President Donald Trump retweeted a comment from Richard Grenell that Microsoft "should now be barred from federal government contracts - there should be consequences for not selling technology to police departments." Yesterday, Microsoft (MSFT) President Brad Smith confirmed at a Washington Post Live event that the company plans to await federal regulation before selling facial recognition technology to police. Microsoft's position is in line with similar decisions by Amazon (AMZN) and IBM (IBM).
MAJOR MOVERS: Among the noteworthy gainers was Perspecta (PRSP), which advanced 19.6% after activist investor Jana Partners disclosed a 5.9% ownership stake yesterday and said that it may have "discussions to maximize shareholder value." While Jana listed M&A on its list of ways to acheive its goal, William Blair analyst Louie DiPalma said he believes that an acquisition of Perspecta is unlikely over the next 12 months. However, if a deal were to take place, DiPalma believes that the most likely buyer would be SAIC (SAIC), adding that CACI (CACI) may also be interested.
Also higher was Hertz (HTZ), which jumped 40.8% after The Wall Street Journal's Becky Yerak reported that the company is looking to sell up to $1B in additional equity to capitalize on the rally in its stock price in spite of its bankruptcy proceedings. The car rental company is asking a bankruptcy judge to approve a deal with Jefferies to allow the potential sale of 246.8 million unissued shares, the report noted.
Among the notable losers was PVH Corp. (PVH), which slid 5.9% after its first quarter earnings report. Also lower was Oneok (OKE), which fell 3.5% after pricing a 26M share secondary offering at $32 per share, below the last closing price of $35.33.
INDEXES: The Dow added 477.37, or 1.9%, to 25,605.54, the Nasdaq gained 96.08, or 1.01%, to 9,588.81, and the S&P 500 advanced 39.21, or 1.31%, to 3,041.31.
Tesla
-38.63 (-3.97%)
Adobe
+18.29 (+4.72%)
Lululemon
-11.35 (-3.69%)
Microsoft
+1.04 (+0.56%)
Amazon.com
-16.55 (-0.65%)
IBM
+3.94 (+3.34%)
Perspecta
+4.09 (+19.41%)
SAIC
+0.16 (+0.19%)
CACI
+2.265 (+0.95%)
PVH Corp.
-3.16 (-5.99%)
Oneok
-1.265 (-3.58%)
Hertz
+0.84 (+41.58%)