The major averages were pointed to a lower open in the early going but equity futures were lifted into positive territory following the encouraging weekly jobless claims report. The indexes are mixed at midday as Congress is still in a stalemate on aid measures and U.S.-China relations remain tense. The big earnings reporter of last night, Cisco (CSCO), is sliding after it gave disappointing guidance as enterprise IT spending has been slower to return than consumer spending amid the pandemic.
ECONOMIC EVENTS: In the U.S., initial jobless claims dropped 228,000 to 963,000 in the week ended August 8. The trade price indexes beat estimates with July gains that extended the May-June bounce. Import prices rose 0.7% in July, with export prices increasing 0.8%, representing another inflation beat this week following the earlier PPI and CPI reports.
TOP NEWS: Shares of Cisco are 11% lower near noon after the company's fiscal fourth quarter results beat consensus estimates, but the company's guidance for the October quarter is raising concerns. In addition to reporting results and issuing guidance, Cisco said it is "rebalancing" its R&D investments to focus on new areas, initiated a restructuring plan in the first quarter of fiscal 2021 and announced that CFO Kelly Kramer has announced plans to resign.
Shares of Peloton (PTON) are in the spotlight following a Bloomberg report saying Apple (AAPL) is developing a new subscription for virtual fitness classes that will be offered in a bundle that would be a rival to virtual classes offered by the company. Apple has plans for a series of bundles, dubbed "Apple One" inside the company, to let customers subscribe to several of the company's digital services at a lower monthly price, according to Bloomberg's Mark Gurman.
In M&A news, Thermo Fisher (TMO) reported that its offer to acquire all of the ordinary shares of Qiagen N.V. (QGEN) has lapsed after the bid did not reach the minimum acceptance threshold. Thermo Fisher has terminated the acquisition agreement with Qiagen, which will pay an expense reimbursement payment of $95M and said that it will "continue to execute its successful growth strategy" as it moves forward "from a position of strength with robust growth prospects."
MAJOR MOVERS: Among the noteworthy gainers was Aspen Technology (AZPN), which rose 30% after the company reported "better than feared" Q4 results. Also higher was Keysight Technologies (KEYS) which gained 3% after Goldman Sachs analyst Mark Delaney upgraded the stock to Buy from Neutral with a $120 price target as he assumed coverage.
Among the notable losers was Vroom (VRM), which dropped 15% following the company's first quarterly report since coming public. Also lower was Micron (MU), which slid 3% after Deutsche Bank analyst Sidney Ho downgraded the shares to Hold from Buy with a $48 price target.
INDEXES: Near midday, the Dow was down 43.20, or 0.15%, to 27,933.64, the Nasdaq was up 87.59, or 0.80%, to 11,099.83, and the S&P 500 was up 1.78, or 0.05%, to 3,382.13.
Cisco
-5.28 (-10.98%)
Peloton
+1.09 (+1.70%)
Apple
+7.68 (+1.70%)
Micron
-1.7 (-3.51%)
Thermo Fisher
+0.04 (+0.01%)
Qiagen
-0.19 (-0.39%)
Vroom
-12.32 (-17.77%)
Keysight Technologies
+3.32 (+3.33%)
Aspen Technology
+29 (+29.87%)