The S&P is heading for a fourth straight winning session amid signs of a U.S. fiscal deal, President Trump stating he will go it alone on a payroll tax cut if he has to and reports that the U.S. and China will meet on August 15 to assess the phase one trade deal.
ECONOMIC EVENTS: In the U.S., ADP reported private payrolls increased 167,000 in July, which was sharply below estimates. The trade deficit narrowed by a less than expected 7.5% to $50.7B in June as exports bounced 9.4% and imports jumped 4.7%. Markit's PMI services index rose to 50.0 in the final July read, bettering the 49.6 preliminary reading and the 47.9 figure for June. ISM's services index rose 1 point to 58.1 in July, which was better than forecast.
TOP NEWS: Shares of Disney (DIS) are 9% higher near noon following last night's fiscal Q3 report. Following the report, BMO Capital analyst Daniel Salmon highlighted what he sees as "a slew of new news" that has "reinvigorated the Bull case," including another investor day that is upcoming, the launch of a new STAR-branded general entertainment app internationally, and the announcement that "Mulan" will premier on Disney+ in most countries "on a premier access basis." Meanwhile, Douglas Mitchelson, who upgraded Disney to Outperform from Neutral with a price target of $146, up from $116, said that new CEO Bob Chapek is now indicating an "innovative and bold" further pivot to streaming.
In other mega cap earnings news, shares of CVS Health (CVS) are down 1% at midday following the company's quarterly report.
In COVID-19 vaccine news, shares of Novavax (NVAX) are on the rise on Wednesday after the company announced data from its Phase 1/2 randomized, observer-blinded, placebo-controlled trial of its COVID-19 vaccine with and without Matrix-M adjuvant in healthy adults 18-59 years of age. Wall Street analysts are split on the stock, with JPMorgan analyst Eric Joseph upgrading Novavax to Overweight on his view that it is "not too far a stretch" to conclude the activity of NVX-CoV2373 "looks best-in-class." On the flip side, Ladenburg Thalmann analyst Michael Higgins downgraded Novavax to Sell from Neutral, stating that the company is one of the last in "Operation Warp Speed" to present its initial data and its current valuation overestimates the revenue and net profit opportunity.
In addition, Johnson & Johnson (JNJ) has announced that its Janssen Pharmaceutical unit has entered into an agreement with the U.S. government for the large scale domestic manufacturing and delivery in the U.S. of 100M doses of Janssen's SARS-CoV-2 investigational vaccine, while Pfizer Canada (PFE) and BioNTech (BNTX) also announced an agreement with the Government of Canada to supply their BNT162 mRNA-based vaccine candidate against SARS-CoV-2, assuming it is found to work. Moderna (MRNA), another peer developing a COVID vaccine that just reported on its earnings, has dropped 4% near midday.
In M&A news, shares of both Teladoc (TDOC) and Livongo (LVGO) are lower after the companies announced that they have entered into a definitive merger agreement. Each share of Livongo will be exchanged for 0.5920x shares of Teladoc Health plus cash consideration of $11.33 for each Livongo share, representing a value of $18.5B based on the closing price of Teladoc Health shares as of August 4. Upon completion of the merger, existing Teladoc Health shareholders will own approximately 58% and existing Livongo shareholders will own approximately 42% of the combined company.
MAJOR MOVERS: Among the noteworthy gainers was Fulgent Genetics (FLGT), which rose 24% after the company reported better than expected earnings and revenue. Also higher were EnLink Midstream (ENLC), LivePerson (LPSN), and Assurant (AIZ), which gained after reporting quarterly results.
Among the notable losers was EverQuote (EVER), which slid 17% after it reported quarterly results and agreed to acquire Crosspointe Insurance & Financial Services. Also lower after reporting quarterly results were Vapotherm (VAPO), New Relic (NEWR), and Cardlytics (CDLX).
INDEXES: Near midday, the Dow was up 290.47, or 1.08%, to 27,118.94, the Nasdaq was up 34.28, or 0.31%, to 10,975.44, and the S&P 500 was up 17.44, or 0.53%, to 3,323.95.
Disney
+10.75 (+9.15%)
Novavax
+17.39 (+11.07%)
Johnson & Johnson
+0.76 (+0.52%)
Pfizer
-0.05 (-0.13%)
Moderna
-2.88 (-3.67%)
Livongo Health
-9.09 (-6.29%)
CVS Health
-0.78 (-1.20%)
Fulgent Genetics
+7.17 (+24.16%)
EnLink Midstream
+0.57 (+22.49%)
LivePerson
+10.29 (+22.25%)
Assurant
+15.84 (+14.79%)
EverQuote
-9.235 (-17.02%)
Vapotherm
-20.84 (-38.98%)
New Relic
-18.405 (-25.04%)
Cardlytics
-7.01 (-9.65%)
BioNTech
-1.96 (-2.36%)
Teladoc
-34.41 (-13.81%)