Morning Brief

What to watch today: Dow futures dropped as Wall Street's volatile week continues

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On the final day of a volatile week of short-squeezing frenzy, the Dow Jones Industrial Average was set to drop about 150 points at Friday's open, with Dow stock Johnson & Johnson (JNJ) falling after the U.S. drug giant released data about its one-dose coronavirus vaccine. The shot was 72% effective in the U.S., but less so in other regions. Wall Street's volatility came amid the Reddit-fueled trading around GameStop (GME) and other highly shorted stocks. (CNBC)

The Dow on Thursday recovered nearly half of Wednesday's 633-point decline, the worst one-session drop since late October. Ahead of Friday's trading, the Dow was nearly 2% away from its closing record high earlier this month. Three Dow stocks — Caterpillar, Honeywell and Chevron — reported quarterly earnings before-the-bell, along with drugmaker Eli Lilly. (CNBC)

IN THE NEWS TODAY

J&J's highly anticipated vaccine results were based on 468 confirmed Covid cases among the phase three trial's more than 43,000 volunteers, including those infected with the new, highly contagious strain found in South Africa. J&J also said the vaccine was 85% effective in preventing severe disease four weeks after vaccination in all adults. If the J&J vaccine gets cleared by the FDA, it would be the third approved for emergency use in the U.S. (CNBC)

U.S.-based biotech firm Novavax (NVAX) said late Thursday its vaccine was more than 89% effective in protecting against the coronavirus. In its phase three clinical trial conducted in Britain, the two-shot vaccine appeared to be 85.6% effective against the new strain originally found in that country. However, in a phase two study in South Africa, the Novavax was only 49.4% effective against the new variant found there. Shares of Novavax surged nearly 60% in Friday's premarket. (CNBC)

Robinhood raised $1 billion overnight from investors to shore up its balance sheet as the brokerage app was set to ease restrictions in the trading of certain volatile stocks, according to CNBC's Andrew Ross Sorkin. The money raised was on top of the $500 million the broker accessed through credit lines to ensure it had the capital required to keep allowing its clients to trade stocks like GameStop and AMC Entertainment (AMC) (CNBC)

AMC Entertainment (AMC) is exploring raising more capital, including a potential stock sale, according to a Reuters report. The movie theater chain's stock is among those that have seen a surge from Reddit-inspired traders, along with stocks like GameStop (GME) and Bed Bath & Beyond (BBBY). (Reuters)

Robinhood restricted trading in cryptocurrencies Friday as the price of bitcoin and a meme-inspired token rose sharply after Elon Musk tweets. Bitcoin skyrocketed as much as 20% early Friday to about $38,100 after Musk added #bitcoin to his Twitter bio. The Tesla CEO also sent out a cryptic tweet: "In retrospect, it was inevitable." (CNBC)

Dogecoin, originally founded as a joke about a dog meme, soared as much as 800% on Thursday after a Reddit board talked about making it the cryptocurrency equivalent of GameStop. Musk tweeted out Thursday evening a picture of a magazine cover of "Dogue," play on popular fashion title "Vogue." (CNBC)

Democrats on Capitol Hill and the White House rejected a Republican pitch to split President Joe Biden's $1.9 trillion coronavirus rescue plan into smaller chunks. Democrats appeared ready to push the measure through without GOP help. Success would give Biden a signature accomplishment in his first 100 days in office (AP)

STOCKS TO WATCH

Caterpillar (CAT): The heavy equipment maker earned $2.12 per share for the fourth quarter, above the consensus estimate of $1.49 a share. Revenue essentially came in line with forecasts. The company said it was well-positioned for the future and should emerge from the pandemic stronger than it was before.

Honeywell (HON): The industrial conglomerate earned $2.07 per share for the fourth quarter, 7 cents a share above estimates, with a beat for revenue as well. Honeywell said 2020 was a challenging year but noted that sequential improvements in profit and sales continued during the final three months of 2020.

Chevron (CVX): Chevron lost a penny a share for the fourth quarter, compared to consensus estimates of a 7 cents per share profit. Revenue was also below analysts' forecasts, and the company's overall results were hurt by low margins on fuel and acquisition costs among other factors.

Visa (V): Visa beat estimates by 14 cents a share, with quarterly earnings of $1.42 per share. The payment network operator's revenue also topped Wall Street forecasts. Visa benefited from a surge in online shopping during the holiday period, with overall payment volume up 5%. The company also announced an $8 billion stock buyback.

Colgate-Palmolive (CL): The consumer products company came in a penny a share ahead of estimates, with quarterly earnings of 77 cents per share. Revenue also topped Wall Street forecasts. Colgate said it sees 2021 organic sales up 3% to 5%, in line with its long-term target.

Eli Lilly (LLY): The drugmaker beat estimates by 40 cents a share, with quarterly earnings of $2.75 per share. Revenue also beat Street projections, boosted by strong sales of its diabetes drugs as well as the launch of its Covid-19 antibody treatment.

Biogen (BIIB): The drugmaker's shares jumped nearly 12% premarket on news that the Food and Drug Administration has extended the review period by three months for its experimental Alzheimer's treatment aducanumab. Biogen is providing additional data to the FDA as part of the agency's review.

Mondelez (MDLZ): Mondelez came in a penny a share ahead of Street forecasts, with quarterly profit of 67 cents per share. The maker of Oreos and other snack foods reported better-than-expected revenue as well. Stay-at-home consumers continued to increase snack consumption.