Stock were mixed on Tuesday as weakness in "defensive" sectors such as Tech offset moves higher in pro-cyclical areas that came alongside a move up in yields for 10-year U.S. Treasuries. A continued march higher in yields, combined with lofty valuations, has come along with increasingly optimistic recovery expectations, good news on vaccines, the potential for another $4T in stimulus and an ultra-accommodative Fed. Hence, more choppy action looks to be on tap for April as the market mulls the various cross-currents.
ECONOMIC EVENTS: In the U.S., the Conference Board consumer confidence index surged 19.3 points in March to its highest reading in a year and now stands at 109.7, up from 90.4 in February. The FHFA home price index rose 1.0% in January to 316.7, hitting another new high. The S&P Case/Shiller 20-city home price index rose 0.9% to 243.0 in January.
TOP NEWS: In COVID-19 news, BioNTech (BNTX) and Pfizer (PFE) announced that they expect to increase manufacturing capacity for BNT162b2 - their joint COVID-19 vaccine - to up to 2.5B doses by the end of 2021. The increase is driven by the optimization of production processes, the recent initiation of production at BioNTech's Marburg, Germany facility, regulatory approval for six dose vials, and the expansion of the manufacturing and supplier network, said the companies, which added that further measures and discussions with potential partners to continue to expand the manufacturing capacity and network are ongoing.
Bitcoin jumped back above $59,000 earlier today after recent news that Visa (V) will allow USD Coin, another cryptocurrency, on its payment network and this morning's announcement that PayPal (PYPL) will allow U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants.
In M&A news, Spotify has acquired Betty Labs, the creators of Locker Room, a live audio app "that's changing the way insiders and fans talk about sports." Additionally, DraftKings (DKNG) announced that it has acquired Vegas Sports Information Network, which it said will enable the company "to further build out its content capabilities and will augment VSiN's ability to broaden their audience alongside the expansion of legal sports betting in the U.S."
Meanwhile, the Federal Trade Commission has filed an administrative complaint and authorized a federal court lawsuit to block Illumina's (ILMN) $7.1B proposed acquisition of Grail - a maker of a non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing. In its complaint, the FTC said that as "the only viable supplier of a critical input, Illumina can raise prices charged to Grail competitors for NGS instruments and consumables; impede Grail competitors' research and development efforts; or refuse or delay executing license agreements that all MCED test developers need to distribute their tests to third-party laboratories." In response, Illumina announced that it disagrees with, and will oppose, the FTC's challenge and will pursue its right to proceed with the transaction.
MAJOR MOVERS: Among the noteworthy gainers was DXC Technology (DXC), which rose 9.1% after Deutsche Bank analyst Bryan Keane upgraded the stock to Buy from Hold with a price target of $44, up from $28. Also higher was American Airlines (AAL), which gained 5.3% after Jefferies analyst Sheila Kahyaoglu upgraded shares to Hold from Underperform with a price target of $25, up from $15.
Among the notable losers was Wave Life Sciences (WVE), which dropped almost 16% after the company's Phase 1b/2a Huntington's disease trial failed on efficacy. Also lower was Canoo (GOEV), which fell 21.2% and was downgraded to Neutral by Roth Capital analyst Craig Irwin after the EV startup reported its first quarterly results post SPAC-IPO.
INDEXES: The Dow lost 104.41, or 0.31%, to 33,066.96, the Nasdaq fell 14.25, or 0.11%, to 13,045.40, and the S&P 500 declined 12.54, or 0.32%, to 3,958.55.
Illumina
-26.6 (-6.74%)
Pfizer
-0.51 (-1.39%)
BioNTech
+8.67 (+9.06%)
PayPal
+1 (+0.42%)
Visa
-2.76 (-1.29%)
Bitcoin
+ (+0.00%)
Spotify
+4.93 (+1.95%)
DraftKings
+2.84 (+4.88%)
DXC Technology
+2.64 (+9.26%)
American Airlines
+1.24 (+5.41%)
Wave Life Sciences
-1.165 (-16.43%)
Canoo
-2.48 (-21.12%)