The major averages are mixed, with modest moves, as investors weigh a raft of domestic economic data, ongoing virus uncertainties, frustration over the lack of another U.S. aid package, and persistent U.S.-China frictions.
ECONOMIC EVENTS: In the U.S., retail sales increased 1.2% in July, and were up 1.9% excluding autos. The former figure is a little weaker than expected, while the latter is a bit stronger than forecast. Industrial production rose 3.0% in July and capacity utilization rose to 70.6%. Business inventories dropped 1.1% in June, marking a sixth straight decline, while business sales climbed another 8.4% in June. The University of Michigan consumer sentiment survey inched up 0.3 tics to 72.8 in the preliminary August reading following a 72.5 reading in July. Second quarter nonfarm productivity was reported to have grown at a 7.3% rate, bouncing from the 0.3% contraction estimated for the first quarter.
TOP NEWS: Two of Wall Street's bears on Tesla (TSLA) have softened their stances as analysts at both BofA and Morgan Stanley have raised their ratings on the stock to the equivalent of a hold. Morgan Stanley's Adam Jonas upgraded Tesla to Equal Weight from Underweight with a price target of $1,360, up from $1,050, as he is now assuming the benefits of a transfer of supply of batteries and EV powertrains to third party carmakers as part of his base case scenario. Meanwhile, BofA analyst John Murphy upgraded Tesla to Neutral from Underperform with a price target of $1,750, up from $800, as he argues that the company's "unfettered access" to low-cost capital remains a key advantage that should be leveraged to accelerate growth.
China's iQIYI (IQ) is sliding after the company disclosed that the SEC's Division of Enforcement is seeking certain financial and operating records following a report issued by short-seller firm Wolfpack Research in April 2020. Shares of iQIYI trading in New York are 16% lower following the disclosure, which came alongside the company's quarterly report, while shares of Baidu (BIDU), the company's majority stakeholder, are also 7% following the SEC probe news and its own earnings report.
In other earnings news, Applied Materials (AMAT) shares are up 4% after the company reported strong results and provided what Stifel analyst Patrick Ho said was "a relatively optimistic outlook" for the rest of 2020.
MAJOR MOVERS: Among the noteworthy gainers was Mesoblast (MESO), which jumped 52% after the company announced that the Oncologic Drugs Advisory Committee of the U.S. FDA voted 9-to-1 in favor that the available data support the efficacy of remestemcel-L in pediatric patients with steroid-refractory acute graft versus host disease. Also higher was Kamada (KMDA), which gained 11% after the company reported Q2 results and multiple stories were published in the Israeli press highlighting the initial positive response observed in the first three patients who were given the company's convalescent plasma-derived hyperimmune globulin product to treat COVID-19.
Among the notable losers was Paysign (PAYS), which dropped 27% after the company reported second quarter results last night. Also lower was GSX Techedu (GSX), which fell 15%. The company, like iQIYI, is domiciled in China, trades in the U.S., and has been accused of fraud by short-selling research firms.
INDEXES: Near midday, the Dow was up 60.22, or 0.22%, to 27,956.94, the Nasdaq was down 25.09, or 0.23%, to 11,017.41, and the S&P 500 was up 3.20, or 0.09%, to 3,376.63.
Tesla
+27.02 (+1.67%)
iQiyi
-3.445 (-15.88%)
Baidu
-8.375 (-6.72%)
Applied Materials
+2.95 (+4.54%)
Mesoblast
+6.48 (+54.92%)
Kamada
+1.27 (+14.11%)
Symbol now GOTU
-14.835 (-14.84%)
Paysign
-2.825 (-27.19%)