U.S. markets rose on Wednesday as investors digested more positive news about the search for a Covid-19 vaccine. Prices of gold and silver also moved higher.
Tesla posted adjusted profits results Wednesday afternoon well ahead of expectations. Excluding one-time charges, Tesla's second-quarter earnings per share of $2.18 were well above the 3 cents per share expected by analysts polled by Refinitiv. The company also reported GAAP net income for the fourth consecutive quarter, a key achievement that opens the door for S&P Dow Jones to include the stock in the S&P 500.
The electric car maker said in its earnings presentation that the progress it's made in 2020 has "positioned us for a successful second half." Tesla also reiterated its goal of delivering 500,000 vehicles this year. — Thomas Franck
Shares of Chipotle Mexican Grill dipped more than 1% in extended trading after the restaurant chain reported second quarter earnings that were down 90% as locations remained closed during the pandemic. The company posted an adjusted profit of 40 cents per share, which was 5 cents ahead of Street estimates, according to Refinitiv. Revenue came in at $1.36 billion, which was slightly ahead of the expected $1.34 billion. Digital orders increased by 216% and accounted for 60.7% of sales. - Amelia Lucas, Pippa Stevens
Shares of casino company Las Vegas Sands fell 1.4% in extended trading after the company missed Wall Street estimates for its top and bottom lines for the second quarter. The company reported a loss of $1.05 per share on $98 million of revenue. Analysts surveyed by Refinitiv projected a loss of 74 cents per share and $564 million of revenue. The estimates had a wider-than-typical range. Casino stocks have been hit hard by the coronavirus pandemic, which has brought global travel to a standstill. Las Vegas Sands said it had $3.02 billion of unrestricted cash on its balance sheet and access to another $3.9 billion through credit facilities. — Jesse Pound
Shares of Microsoft dipped 2% in after-hours trading Wednesday evening after the software giant reported fiscal fourth-quarter earnings and revenues that surpassed analysts' expectations. Microsoft reported a profit of $1.46 per share on sales of $38.03 billion. Analysts had expected earnings per share of $1.34 and revenues of $36.5 billion, according to Refinitiv.
CEO Satya Nadella said in a press release accompanying the results that "the last five months have made it clear that tech intensity is the key to business resilience. Organizations that build their own digital capability will recover faster and emerge from this crisis stronger."
Microsoft said its commercial cloud unit surpassed $50 billion in annual revenues for the first time as customers continued to work and learn from home amid the Covid-19 pandemic.
The company also said transactional license purchasing continued to slow, particularly in small and medium businesses, and LinkedIn was negatively impacted by the weak job market and reductions in advertising spend.— Thomas Franck
Shares of Whirlpool jumped more than 8% after the company beat second quarter estimates by a large margin. The company reported an adjusted profit of $2.15 per share for the quarter, compared with the $1.00 profit analysts surveyed by Refinitiv were expecting. Revenue also topped expectations, coming in at $4.04 billion versus the expected $3.57 billion. The company also raised its full-year revenue outlook. - Pippa Stevens
Stocks closed around their highest levels of the day following news that the GOP is considering extending unemployment benefits at a reduced rate. The Dow advanced 165 points for a gain of 0.62%, while the S&P 500 closed 0.58% higher. The tech-heavy Nasdaq Composite was the relative underperformer, gaining 0.24%. Optimism over a potential Covid-19 vaccine developed by Pfizer and Germany-based BioNTech also fueled investor optimism. - Pippa Stevens
As stocks rose this month, so did bonds, and the yield on the 10-year is back below 0.60% for the first time since April 22.
John Briggs, head of strategy at NatWest Markets, said there has been strong buying interest all month, and the 10-year has lost about 9 basis points since early July to 0.58% Wednesday. Bond yields fall as prices rise.
"It's just relentless. It's like a half point a day no matter what the news is," he said. "There's just strong demand. Domestic banks have had their largest consecutive increase in Treasurys [holdings] since the 1970s."
Briggs said banks bought $205 billion in Treasurys since mid-May, the largest consecutive boost to their holdings since 1973. But others are buying too. Typically when bond yields fall and buyers run into bonds, it's because there are worries about the economy or something else. Since early July, the spread of coronavirus has picked up dramatically, yet the S&P 500 is up more than 5%.
"Either the bond guys are just depressed or there's nothing to spark an up move, and we just see buying," Briggs said. -- Patti Domm
Stocks jumped to their highest levels of the day in the final hour of trading following news that Republicans are considering extending stimulus benefits at a reduced level. The current $600 per week jobless benefit boost, which was implemented in March, is set to expire at the end of July. Talks are ongoing, but the GOP is currently discussing extending the benefit at a reduced rate of $400 per month for the rest of the year. - Kayla Tausche, Jacob Pramuk
The Dow and S&P 500 were on pace to record slight gains after Pfizer and BioNTech landed a $2 billion government deal for their coronavirus vaccine. The 30-stock Dow traded 0.3% higher along with the S&P 500. The Nasdaq Composite struggled, falling 0.1%. A decline in bank shares weighed on the major averages. —Fred Imbert
Bank stocks fell in afternoon trading, limiting the Dow and S&P 500 to modest gains. Shares of Goldman Sachs and Morgan Stanley fell 3% and 2.3%, respectively, while JPMorgan lost 1.6%. Last week, major banks reported quarterly results that largely beat expectations, thanks in part to strong performances from their trading units. Investors have not rewarded the stocks however, with the SPDR S&P Bank ETF losing ground so far in July. — Jesse Pound
The number of advancing stocks at the New York Stock Exchange was roughly the same as declining issues as the broader market traded in a narrow range. FactSet data showed that 1,547 NYSE-listed stocks traded higher while 1,317 declined. —Fred Imbert
Tesla reports its second-quarter earnings on Wednesday after the bell and Wall Street analysts say the pressure is on for Tesla to deliver.If the company delivers its fourth straight quarter of profits, the company would be eligible for inclusion in to the S&P 500. However, many analysts are urging clients to be cautious and believe the stock is overvalued. "Expectations have risen into the quarter, but regardless we think the Tesla 2020 earnings story still hinges more on H2 execution/outcomes," Citi said. Shares are up over 5% this week.
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Nike said Wednesday that it is shaking up its leadership ranks and cutting some jobs as the retailer refocuses its business on digital sales in the wake of the coronavirus pandemic. Nike did not disclose how many jobs will be lost.
"We are announcing changes today to transform Nike faster, accelerate against our biggest growth opportunities and extend our leadership position," Nike President and Chief Executive Officer John Donahoe said in a statement. "Now is the right time to build on Nike's strengths and elevate a group of experienced, talented leaders who can help drive the next phase of our growth."
Shares of Nike were flat around midday trading. - Lauren Thomas, Pippa Stevens
FirstEnergy — Shares of FirstEnergy plunged more than 24%, extending a steep sell-off from Tuesday, after the energy company was embroiled in a corruption investigation in Ohio. The company said that it has received subpoenas as part of the investigation.
Best Buy — Shares of the electronics retailer surged nearly 8% after the company said its online sales jumped more than three-fold in the current quarter through July 18.
iRobot – Shares of iRobot dropped more than 6% after the automatic vacuum maker posted big earnings beat. The company also raised its revenue forecast due to a surge in demand amid the pandemic.
Check out more companies making headlines in midday trading. — Yun Li
The major averages were up sliglty around midday amid optimism around a coronavirus vaccine candidate from Pfizer and its German partner BioNTech. The Dow climbed 85 points, or 0.3%. The S&P 500 gained 0.2% and the Nasdaq Composite advanced 0.1%. —Fred Imbert
Jonathan Golub, chief U.S. equity strategist at Credit Suisse, thinks investors shouldn't worry too much about the outperformance of Big Tech relative to the market. "There's lots to worry about these days including an increase in COVID-19 cases, a strained relationship with the world's #2 economy, ballooning deficits and the potential for higher taxes," said Golub. "Fortunately, you can cross market concentration off your list of things to fret about." —Fred Imbert
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Shares of Pershing Square Tontine Holdings, Bill Ackman's new SPAC fund, jumped 7% when they began trading on Wednesday. Also known as blank-check companies, SPACs raise money in an IPO and then hold the cash until finding an acquisition target. Ackman's new SPAC is the largest on record after raising $4 billion in outside capital. Pershing Square will contribute an additional $1 billion to $3 billion, meaning the total size could reach $7 billion. - Pippa Stevens
Sales of existing homes jumped nearly 21% in June, marking the largest monthly gain on record, according to the National Association of Realtors. The jump came after sharp declines over the previous three months due to the coronavirus pandemic. Sales were still 11.3% lower annually. The iShares U.S. Home Construction ETF (ITB) gained 3.4% on Wednesday, on pace for its best day in a week. Leaders in the ETF included NVR and M/I Homes, which were both up almost 8%. KB Home and Toll Brothers also popped 6% each. — Yun Li, Gina Francolla
The iShares Silver Trust ETF (SLV) jumped 5% as investors continue to hedge positions through safe-haven assets like precious metals. The ETF hit its highest level since March 2014 and has already traded 19 million shares, nearly two-thirds its 30-day average volume. —Fred Imbert, Gina Francolla