Stocks have been searching for direction following a relatively quiet night and morning of news from a macro perspective, as evidenced by the flat S&P and mixed Dow and Nasdaq. The ECB kept its interest rates unchanged and said it plans to end its bond buying this month, but ECB President Mario Draghi also downgraded the bank's economic forecast for the eurozone for this year and next, citing the threat of protectionism, vulnerabilities in emerging markets and financial market volatility.
ECONOMIC EVENTS: In the U.S., initial jobless claims fell 27,000 to 206,000 in the week ended December 8, versus expectations for 226,000 first-time claims. The trade price report was weak, with a 1.6% month-over-month decline for import prices in November and a 0.9% drop for export prices.
In Europe, the ECB held rates steady and confirmed it will end its bond purchase program this month, as expected. The central bank also revised slightly downwards its two-year economic forecast. It now expects the eurozone economy to grow 1.9% this year and 1.7% in 2019, compared with the 2% and 1.8% growth rates projected in September.
COMPANY NEWS: Shares of General Electric (GE) are reacting favorably after the most prominent bear on Wall Street raised his long-held sell rating on the stock. JPMorgan analyst Stephen Tusa upgraded the stock to Neutral from Underweight, with an unchanged price target of $6, and removed the shares from his firm’s Analyst Focus list as a short idea. The “known unknowns” in the near-term are better understood and the debate has become more balanced, Tusa said. Separately, General Electric said it was launching a $1.2B industrial Internet of Things software company and selling a majority stake in its ServiceMax to private equity group Silver Lake. Near noon, GE shares are up 8% to $7.24.
Apple (AAPL) announced an investment of $1B to build a new campus in North Austin, Texas. The campus will initially accommodate 5,000 additional employees, with the capacity to grow to 15,000, the iPhone maker said. The company also announced plans to establish new sites in Seattle, San Diego and Culver City and expand in cities across the U.S. including Pittsburgh, New York and Boulder, Colorado over the next three years.
Shares of Tesla (TSLA) could jump sharply in the next year as the company starts making money more consistently, according to an analyst at Baird. The upbeat analyst note from Baird's Ben Kallo, who raised his price target on Tesla to $465 from $411, comes as an explosive Wired magazine deep-dive reported that CEO Elon Musk had a habit of going on firing sprees, with some employees being told not to walk too close to Musk's desk in case it jeopardized their career.
MAJOR MOVERS: Among the noteworthy gainers was Qudian (QD), which rose 23% after it reaffirmed its fiscal 2018 guidance, provided fiscal 2019 guidance, and adopted a new $300M share repurchase program. Also higher was Ciena (CIEN), which gained 7.5% after reporting quarterly results.
Among the notable losers was Limelight Networks (LLNW), which fell 26% after it lowered its fiscal 2018 guidance. Also lower was Tailored Brands (TLRD), which dropped 30% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 20.69, or 0.08%, to 24,547.96, the Nasdaq was down 41.77, or 0.59%, to 7,056.54, and the S&P 500 was down 5.56, or 0.21%, to 2,645.51.
