Stocks are rising in Thursday morning trading, with the jump in the Nasdaq pushing the tech-heavy index back into positive territory for the year. News that U.S. and Chinese negotiators are scheduled to speak as soon as next week is helping sentiment despite the fact that there were over 3M U.S. jobless claims again last week.
ECONOMIC EVENTS: In U.S. data, initial jobless claims fell 677,000 to 3.17M in the week ended May 2. First quarter nonfarm productivity contracted at a 2.5% rate, which was not as bad a feared.
TOP NEWS: Shares of ViacomCBS (VIAC) are up 14% near noon after the company reported Q1 revenue that beat expectations due to content licensing. However, the "big news," according to Credit Suisse analyst Douglas Mitchelson, was the announcement of a distribution deal with Google's (GOOGL) YouTube TV. The deal not only gives the company almost 3M additional subscribers, but it demonstrates the value of CBS's negotiating leverage helping Viacom, Mitchelson tells investors.
Moderna (MRNA) has jumped 9% after reporting along with its financial results for the first quarter that the FDA completed its review of the company's Investigational New Drug application for its novel coronavirus vaccine candidate, mRNA-1273, allowing it to proceed to Phase 2 study that is expected to begin shortly. The company also noted it is finalizing protocol for Phase 3 study of mRNA-1273, expected to begin in early summer of 2020.
Shares of Lyft (LYFT) are up 24% following the company's quarterly report. In the wake of the report, Piper Sandler analyst Alexander Potter downgraded Lyft to Neutral, stating that he has "less faith in the attractiveness of the ride-hailing theme" over the next year and beyond due to the COVID-19 pandemic. Lyft's larger ride-sharing competitor, Uber (UBER), is on deck next with its earnings report coming later today.
Payment players PayPal (PYPL) and Square (SQ) are both rising following their quarterly reports. While PayPal missed on earnings in Q1, its total payment volume metric growth saw a "meaningful" 22% bounce in April compared to last year, Wall Street analysts noted as several of them raised their targets on the stock. Credit Suisse analyst Timothy Chiodo, who was among those to raise his price target for Square, said that Jack Dorsey's company needed to deliver strong Cash App metrics, demonstrate increased adoption of e-commerce and omnichannel capabilities, and show a stabilization in GPV declines, all of which he said it did.
In M&A news, Liberty Global (LBTYA, LBTYB and LBTYK) and Telefonica (TEF) announced an agreement to merge their operating businesses in the U.K. to form a 50:50 joint venture. The combination of Virgin Media and O2 will create a nationwide integrated communications provider with over 46 million video, broadband and mobile subscribers and GBP 11 billion of revenue, the companies stated.
MAJOR MOVERS: Among the noteworthy gainers was Ameriprise (AMP), which rose 18% after it reported quarterly results and raised its quarterly dividend. Also higher after reporting quarterly results were Twilio (TWLO) and Peloton (PTON), which gained a respective 37% and 13%.
Among the notable losers was Spirit Airlines (SAVE), which slid 12% after it reported quarterly results and said it plans to reduce discretionary capital spending in 2020 by about $50M. Also lower after reporting quarterly results were SolarEdge (SEDG) and Bausch Health (BHC), which fell 13% and 5%, respectively.
INDEXES: Near midday, the Dow was up 384.12, or 1.62%, to 24,048.76, the Nasdaq was up 138.01, or 1.56%, to 8,992.39, and the S&P 500 was up 48.87, or 1.72%, to 2,897.29.
