Equity index futures were on both sides of unchanged with modest moves in the early morning as a cautious tone was in place with the S&P 500 and Nasdaq just shy of respective record peak closes seen last week. While elevated valuations have been an underlying worry for some time, stocks have moved higher nevertheless amid recovery optimism and massive fiscal and monetary stimulus. News that the U.S. would support a temporary waiver of intellectual property rules to allow developing nations to manufacture vaccines has weighed on shares of Pfizer (PFE), Moderna (MRNA) and other vaccine makers, but new headlines point to opposition to such a plan coming from Germany.
ECONOMIC EVENTS: In the U.S., initial jobless claims declined by 92,000 to 498,000 in the first week of May to hit a new pandemic cycle low. The Q1 productivity growth rate was reported at a stronger than assumed 5.4%. Challenger, Gray & Christmas reported job cuts announced by U.S.-based employers fell 25% in April to 22,913 from the 30,603 announced in March. Last month’s total is down 96.6% from last April, when employers announced the highest monthly total on record of 671,129 cuts, the firm noted.
TOP NEWS: Shares of Uber (UBER) were 7% lower near noon after the ride-hailing giant reported lower than expected revenue for the first quarter, with gross mobility bookings slipping 36% year-over-year. Of note, the company said that its revenue was reduced by a $600M accrual made for the resolution of historical claims in the U.K. relating to the classification of drivers. Uber added on its quarterly call that it still believes it can achieve EBITDA profitability by the end of 2021.
PayPal (PYPL) shares, on the other hand, rose 3% after the payment processing company's better than expected Q1 adjusted earnings and revenue, including 50% growth in total payment volume for the quarter. Looking ahead, the company provided upbeat earnings guidance for the second quarter and fiscal 2021.
In other earnings news, Etsy (ETSY) shares fell 14% despite reporting better than expected quarterly results and providing upbeat Q2 revenue guidance. Several analysts lowered their price targets on Etsy after the report, with BTIG analyst Marvin Fong reducing his target to reflect valuations in the sector.
Meanwhile, Moderna shares fell 4% after the company reported lower than expected Q1 revenue and announced a new supply agreement with Switzerland for 7M booster vaccine doses in 2022. The earnings announcement came a day after Bloomberg reported that the U.S. will support a proposal to waive intellectual-property protections for COVID-19 vaccines, joining an effort to increase global supply and access to the life-saving shots as the gap between rich and poor nations widens.
On the M&A front, shares of At Home Group (HOME) jumped 17% after the company agreed to be acquired by Hellman & Friedman for $2.8B, or $36 per share in cash. Upon completion of the transaction, At Home will become a privately-held company and At Home's shares will no longer trade on The New York Stock Exchange.
MAJOR MOVERS: Among the noteworthy gainers was Luokung Technology (LKCO), which rose 14% after its motion for a preliminary injunction was granted by the U.S. District Court for the District of Columbia and the stock was allowed to resume trading on Nasdaq. Also higher was Sally Beauty (SBH), which gained 17% after reporting quarterly results.
Among the notable losers was PurceCycle (PCT), which declined 41% after short selling research firm Hindenburg Research called the company a “zero-revenue ESG SPAC charade.” Also lower was James River Group (JRVR), which fell 32% after reporting quarterly results and pricing a 5.65M share spot secondary offering at $31 per share.
INDEXES: Near midday, the Dow was up 176.32, or 0.52%, to 34,406.66, the Nasdaq was down 3.52, or 0.03%, to 13,578.91, and the S&P 500 was up 12.89, or 0.31%, to 4,180.48.
Uber
-3.87 (-7.56%)
PayPal
+5.91 (+2.39%)
Etsy
-25.67 (-13.89%)
Moderna
-4.18 (-2.57%)
At Home Group
+5.38 (+17.22%)
Luokung Technology
+0.205 (+13.85%)
Sally Beauty
+3.575 (+17.63%)
PureCycle Technologies
-10.05 (-40.80%)
James River Group
-14.88 (-31.95%)