The major averages are weaker at midday as a "sell the news" trade appears to be in play following President-elect Joe Biden revealing last night the details of his $1.9T "American Rescue Plan." In earnings news, JPMorgan (JPM), Citigroup (C) and Wells Fargo (WFC) are all sliding after the trio of big banks kicked off reporting season for their sector.
ECONOMIC EVENTS: In the U.S., retail sales fell 0.7% in December and declined 1.4% excluding autos, which was much weaker than projected. The producer price index rose 0.3% in December and was up 0.1% excluding food and energy. The Empire State manufacturing index fell another 1.4 ticks to 3.5 in January, which was weaker than expected. Industrial production surged 1.6% in December, with capacity utilization rising to 74.5%, both of which were stronger than expected. Business inventories were up 0.5% in November and sales ticked down 0.1%, as forecast.
Data from the Johns Hopkins Whiting School of Engineering shows there are now 93.3M confirmed cases of COVID-19 worldwide, including 23.3M in the U.S., and nearly 2M deaths due to the disease, including 389,000 in the U.S.
TOP NEWS: Bank stocks were in focus as major players JPMorgan, Citi, and Wells Fargo kicked off this quarter's earnings season. JPMorgan shares were 2% lower near noon even as the lender reported better than expected earnings and revenue for the fourth quarter, with the company saying it plans to start share repurchases in the first quarter. Citi shares also fell 6% despite upbeat Q4 results, while shares of Wells Fargo were down 7% after the bank reported better than expected earnings but lower than expected revenue for the quarter. Commenting on the quarter, Wells Fargo CEO Charlie Scharf said the company's results continued to be impacted by "the unprecedented operating environment and the required work to put our substantial legacy issues behind us." Additionally, PNC Financial (PNC) shares fell 3% despite the company having reported upbeat Q4 results.
In other news, shares of Exxon Mobil (XOM) fell 4% after The Wall Street Journal reported that the SEC has launched an investigation into the company after an employee filed a whistleblower complaint last fall alleging that the company overvalued a key asset in the Permian Basin. In response, the company told Bloomberg that the whistleblower claims are "demonstrably false."
On the M&A front, Accolade (ACCD) shares rose 10% after the company announced an agreement to acquire Innovation Specialists, also known as 2nd.MD, for $230M in cash, $130M in Accolade common stock, and up to $100M of Accolade common stock payable upon the achievement of defined revenue milestones following the closing. Following the news, Credit Suisse analyst Jailendra Singh upgraded Accolade to Outperform from Neutral, saying there will be significant cross-sell synergy opportunities from the deal.
Meanwhile, Spotify (SPOT) shares fell 5% after Citi analyst Jason Bazinet downgraded the stock to Sell from Neutral, saying there's no benefit seen from the company's podcast investments.
MAJOR MOVERS: Among the noteworthy gainers was DBV Technologies (DBVT), which rose 45% after announcing the receipt of written responses from the FDA to questions provided in the Type A meeting following the company's receipt of a complete response letter in connection with its biologics license application for Viaskin Peanut. Also higher was Bionano Genomics (BNGO), which gained 23% after announcing presentations from the Cytogenomics Symposium.
Among the notable losers was Cardiff Oncology (CRDF), which declined 22% after presenting data from its Phase 1b/2 study in KRAS-mCRC. Also lower was Progress Software (PRGS), which fell 10% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 139.64, or 0.45%, to 30,851.88, the Nasdaq was down 72.71, or 0.55%, to 13,039.93, and the S&P 500 was down 22.05, or 0.58%, to 3,773.49.
JPMorgan
-2.75 (-1.95%)
Citi
-3.5 (-5.07%)
Wells Fargo
-2.34 (-6.73%)
PNC Financial
-3.42 (-2.14%)
Exxon Mobil
-1.98 (-3.94%)
Accolade
+5.57 (+11.67%)
Spotify
-17.59 (-5.14%)
DBV Technologies
+1.75 (+46.79%)
Bionano Genomics
+1.765 (+25.47%)
Cardiff Oncology
-4.21 (-21.38%)
Progress Software
-4.87 (-9.97%)