Morning Brief

What to watch today: S&P 500 to add to Tuesday's record close

BY THE NUMBERS

U.S. stock futures were higher as Target and Lowe's reported blowout earnings Wednesday morning, one day after Walmart and Home Depot did the same. The S&P 500 was pacing to add to Tuesday's record close, which wiped out all the coronavirus stock market losses. It was the shortest bear market ever. The index on Tuesday also hit an all-time intraday high. (CNBC)

Shares of Target (TGT) jumped 8% in the premarket after the retailer blew past every forecast on Wall Street for the second quarter as it attracted millions of new customers online during the coronavirus pandemic and set a record for same-store sales that drove earnings up by 80%. (CNBC)

Target CEO credits canceled vacations, not stimulus checks, for blowout quarter (CNBC)

Shares of Lowe's (LOW) rose about 2% in the premarket after the company reported second-quarter revenue had surged 30% to $27.3 billion. Adjusted per-share earnings of $3.75 also beat estimates as consumers spent more on home improvement projects while stuck in the house during the coronavirus crisis. Net earnings of $2.83 billion was up more than 68% from last year's second quarter.

Minutes from the Fed's latest policy meeting, out this afternoon, are likely to shed more light on how central bank officials will wrap up their yearlong strategy review by effectively abandoning their past practice of preemptively lifting interest rates to head off higher inflation. (WSJ)

IN THE NEWS TODAY

The third day of the virtual Democratic National Convention features Hillary Clinton and former President Barack Obama as well as Sen. Kamala Harris accepting the VP nomination. Former presidential hopeful Sen. Elizabeth Warren and House Speaker Nancy Pelosi also speak. On Tuesday night, former President Bill Clinton and Jill Biden argued for electing Joe Biden instead President Donald Trump. The party also formally nominated Biden for president. On Thursday night, Biden officially accepts the nomination, makes his case for his candidacy, and closes out the convention. (CNBC)

* Bill Clinton lays out a stark choice for voters (CNBC)
* Jill Biden says Joe Biden will make the nation 'whole' (CNBC)
* Colin Powell endorses Biden for president, boosting national security profile (CNBC)

Shares of Momenta Pharmaceuticals surged 70% in the premarket after Johnson & Johnson said it agreed to buy the biotech company for about $6.5 billion in cash. The deal gives J&J's Janssen unit access to Momenta's experimental therapy to treat a neuromuscular disease that causes weakness in muscles. J&J shares were basically flat after the announcement. (Reuters)

U.S.-based Regeneron and Swiss drugmaker Roche are teaming up on an investigational antibody cocktail against Covid-19. If the drug were to get regulatory approval, Regeneron will sell it in America and Roche will sell it elsewhere. The stocks were higher on Wednesday's news. (Reuters)

Oracle (ORCL) received verbal support from President Donald Trump in its efforts to buy the U.S. operations of Chinese video-sharing app TikTok. Microsoft (MSFT) is also in negotiations with TikTok parent ByteDance, and The Wall Street Journal previously reported Twitter (TWTR) was also exploring a bid. (CNBC)

Michigan State University is going online for the fall, encouraging students to stay home as schools across the nation struggled to control coronavirus outbreaks. The University of Notre Dame said Tuesday it will move undergraduate instruction online for two weeks. Earlier this week, the University of North Carolina at Chapel Hill said it will switch to remote learning, starting today. (AP & CNBC)

* Ithaca College shifts to remote semester as crosstown Cornell sticks to in-Person fall (The Cornell Daily Sun)

STOCKS TO WATCH

Gilead Sciences (GILD) experimental treatment for moderately to severely active rheumatoid arthritis will not be approved in its current form, according to a complete response letter from the Food and Drug Administration to Gilead. The letter asks for more data and expresses certain concerns about the treatment, but Gilead said it would address the FDA's issues and it still believes in the benefit/risk profile of the treatment.

Southwest Airlines (LUV) said its cash burn rate during July was about $17 million per day, smaller than its previous $18 million forecast. The airline now estimates its third-quarter burn rate at $20 million per day compared with a prior $23 million estimate. The airline attributes the smaller cash burn to recent modest improvements in revenue trends.

Hedge fund Third Point sold its entire holdings of Sony's American depositary receipts (SNE), according to a Securities and Exchange Commission filing. Third Point still owns a large amount of Sony's Japanese shares, however, a person familiar with the fund told Reuters.

Blackstone (BX) is set to buy the over-the-counter drug business of Japan's Takeda Pharmaceutical for $2.37 billion, according to multiple published reports in Japan. Takeda is seeking to reduce debt following its $59 billion acquisition of Irish drugmaker Shire, which was completed in early 2019.

Sorrento Therapeutics (SRNE) fired Chief Financial Officer Jiong Sharo, effective immediately. The California-based biotech company did not give a reason for Sharo's departure.

Uber (UBER) and Lyft (LYFT) are considering moving to a licensing model in California, according to The New York Times. By licensing their brands to vehicle fleet operators in that state, the ride-hailing companies would avoid having to reclassify their drivers as employees.

La-Z-Boy (LZB) reported a profit of 18 cents per share, compared to forecasts of an 18 cents per share loss. The furniture maker's revenue did come in below analysts' estimates, however, amid a pandemic-induced 31% drop in sales. La-Z-Boy said sales have picked up as the summer has progressed.