Stocks have halted a two-day slide as investors digest the latest round of corporate earnings and await the passage of new support measures from the federal government. The Senate passed a $484B relief package to replenish the small business loan program and House leader Pelosi has said the bill will pass the House shortly. Meanwhile, Treasury Secretary Steve Mnuchin said he anticipates most of the economy will restart by the end of August, adding to what appears to be an optimistic trading environment following two days of pulling back.
ECONOMIC EVENTS: In U.S. data, the FHFA house price index increased 0.7% to 287.0 in February.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now about 2.6M confirmed cases of COVID-19 and 179,778 deaths due to the disease.
TOP NEWS: Shares of Netflix (NFLX) are slipping 3% following last night's quarter report. While the streaming company reported a big jump in subscribers amid the COVID-19 pandemic, Netflix also said that given the uncertainty on home confinement timing, predicting future subscriber growth was "mostly guesswork." Both Raymond James and Stifel analysts downgraded the stock after the announcement, with the latter saying that he feels now is "as good as it gets" for Netflix. Meanwhile, Wells Fargo analyst Steven Cahall upgraded the stock to Equal Weight, arguing that "as long as hand sanitizer is sold out," Netflix should outperform.
Shares of Snap (SNAP) are up 29% near midday following its Q1 results, which included in-line losses, above consensus revenue, and better than expected user engagement. Oppenheimer analyst Jason Helfstein upgraded Snap to Outperform from Perform with an $18 price target, telling investors in a post-earnings research note that the company is "executing on all metrics." Pre-COVID-19 revenue growth of 58% year-over-year in January and February suggests the company has overcome its monetization issues, Helfstein added.
Meanwhile, AT&T (T) shares are down 1% after the wireless services and media giant reported worse than expected revenue for the first quarter and withdrew its financial guidance. Randall Stephenson, AT&T Chairman and CEO, attributed a 5 cents per share impact on its first quarter earnings from the COVID pandemic, stating that "without it, the quarter was about what we expected - strong wireless numbers that covered the HBO Max investment, and produced stable EBITDA and EBITDA margins." The company's "core businesses are solid and continue to generate good free cash flow - even in today's environment," added Stephenson.
Shares of L Brands (LB) have fallen sharply 21% after Bloomberg reported that Sycamore Partners is seeking to terminate its agreement with the company regarding the Victoria's Secret brand. Following the report, L Brands confirmed that Sycamore Partners delivered a notice on April 22, "purporting to terminate" the transaction agreement relating to the sale of a 55% interest in Victoria's Secret Lingerie, Victoria's Secret Beauty and PINK. L Brands said it believes that Sycamore's purported termination of the agreement is invalid and that the company "will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights" while continuing its work towards closing the transactions contemplated by the pact with the private equity firm.
Additionally, Delta Air Lines (DAL) is down about 3% after reporting revenue that was worse than expected in the first quarter but losses that were not as steep as analysts' average forecast. "With the significant impact of COVID-19 on Delta's revenue, we were burning $100 million per day at the end of March. Through our decisive actions, we expect that cash burn to moderate to approximately $50 million per day by the end of the June quarter," said CFO Paul Jacobson.
MAJOR MOVERS: Among the noteworthy gainers was Expedia (EXPE), which rose 10% after The Wall Street Journal reported that the company was in talks to sell a stake in itself to private equity firms Silver Lake and Apollo (APO). Also higher were Healthcare Services (HCSG), Manhattan Associates (MANH), and Chipotle (CMG), which gained a respective 19%, 13%, and 13% after reporting quarterly results.
Among the notable losers was United Airlines (UAL), which has declined 7% after filing to sell 39.25M shares of common stock. Also lower were Biogen (BIIB) and Interactive Brokers (IBKR), which fell 10% and 8%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was up 429.84, or 1.87%, to 23,448.72, the Nasdaq was up 202.11, or 2.45%, to 8,465.33, and the S&P 500 was up 57.53, or 2.10%, to 2,794.09.
