Stocks traded mixed today, with the Dow and S&P positive, supported by strong economic data and solid results from tech titan Alphabet.
ECONOMIC EVENTS: In the U.S., ADP reported private payrolls bounced 174,000 in January, which was better than expected. Markit's final services PMI for January was boosted to 58.7 in the final reading. That is up from 58.0 in the preliminary reading and up 3.5 points from December's 54.8 figure. The ISM services index increased 1 point to 58.7 in January, which beat estimates.
Meanwhile, The Wall Street Journal reported that U.S. President Joe Biden suggested in a call with House Democrats that he was open to issuing $1,400 payments to a smaller group of Americans in the next round of COVID-19 stimulus legislation and altering the overall price tag of his $1.9T plan
TOP NEWS: Shares of Amazon (AMZN) closed 2% lower after earnings. However, the company's announcement that Jeff Bezos will transition to the role of Executive Chair and Andy Jassy will become CEO largely overshadowed blowout results in the holiday quarter. The company's earning per share came in at roughly twice the average analyst estimate, Amazon blew by $100B in quarterly revenue with its report of $125.6B and guided to break the $100B mark again in the coming quarter, but all of that news is taking a backseat to the exit from the CEO chair being made by one of the world's most well known founders.
Shares of Alphabet (GOOG, GOOGL) rose more than 7% after the company reported blowout results and gave a finer level of detail about its segments, including its Google Cloud unit. Morgan Stanley analyst Brian Nowak, who raised the firm's price target on Alphabet to $2,200 from $2,050 and keeps an Overweight rating on the shares, has previously argued that Alphabet and Facebook (FB) are the only two "mega-cap" tech companies not trading on some version of a sum-of-the-the parts valuation methodology. However, after the report, he is "optimistic these results put sum of the parts in play."
In other earnings news, Spotify (SPOT) fell 8%, Biogen (BIIB) slid over 5%, Electronic Arts (EA) declined 5.5%, and Amgen (AMGN) dipped more than 1% following their respective reports of results and guidance.
In M&A news, Jazz Pharmaceuticals (JAZZ) announced an agreement to acquire GW Pharmaceuticals (GWPH) for $220.00 per American Depositary Share in cash and stock for a total consideration of $7.2B, or $6.7B net of GW cash. Commenting on the news, Mizuho analyst Difei Yang told investors she sees the deal having a positive read through to GW competitor Zogenix (ZGNX), while her peer at Ladenburg argued that the acquisition "spotlights" the value of Zynerba's (ZYNE) CBD products.
Meanwhile, Bloomberg reported that investigators at the U.S. Securities and Exchange Commission are combing social media and message board posts for signs that fraud played a role in dizzying stock swings for GameStop (GME), AMC (AMC) and other companies. . The scrutiny is being done in tandem with a review of trading data to assess whether such posts were part of a manipulative effort to drive up share prices, according to Bloomberg.
MAJOR MOVERS: Among the noteworthy gainers was 10X Capital Venture Acquisition (VCVC), which jumped 49.5% after REE Automotive and the company announced they have entered into a merger agreement for a $3.1B business combination that would result in REE becoming a publicly listed company. Also higher were AbbVie (ABBV) and Apollo Global (APO), which gained 2.5% apiece after reporting quarterly results.
Among the notable losers was Vaxart (VXRT), which dropped 57.8% after announcing preliminary data from its Phase 1 trial of its oral COVID-19 tablet vaccine candidate. Also lower was Chipotle (CMG), which fell 1.5% after reporting quarterly results.
INDEXES: The Dow rose 36.12, or 0.12%, to 30,723.60, the Nasdaq lost 2.23, or 0.016%, to 13,610.54, and the S&P 500 advanced 3.86, or 0.10%, to 3,830.17.
Amazon.com
-70.28 (-2.08%)
Alphabet
+140.82 (+7.30%)
Alphabet
+136.24 (+7.09%)
Ticker changed to META
-0.395 (-0.15%)
Spotify
-28.03 (-8.11%)
Biogen
-14.18 (-5.11%)
Electronic Arts
-8.13 (-5.46%)
Amgen
-3.06 (-1.27%)
Jazz Pharmaceuticals
-6.06 (-3.85%)
GW Pharmaceuticals
+65.21 (+44.52%)
Zogenix
+1.84 (+9.35%)
Zynerba
+0.98 (+27.53%)
GameStop
+1.71 (+1.89%)
AMC Entertainment
+1.04 (+13.28%)
10X Capital Venture Acquisition
+5.605 (+51.64%)
AbbVie
+3.49 (+3.37%)
Apollo Global
+1.27 (+2.60%)
Vaxart
-13.395 (-57.66%)
Chipotle
-31.92 (-2.09%)