Stock futures were mixed in early trading, with the Nasdaq lagging, but at midday all of the major averages have moved solidly into the green and the Nasdaq has become the leader. A fall in continuing jobless claims is providing support for stocks, with today's report revealing the first weekly decline in the measure since the pandemic hit the economy.
ECONOMIC EVENTS: In U.S. data, a revision in the first quarter GDP contraction rate to 5.0% from 4.8% left a slightly weaker than expected headline thanks to a huge $50.8B revision to inventories. Durable goods orders dropped another 17.2% in April. Weekly jobless claims contracted 323,000 to 2.12M in the week ended May 23, moving the four-week moving average down to 2.61M. An index of pending home sales declined 21.8% to 69.0 in April.
TOP NEWS: Social media companies were in focus after Reuters reported that President Donald Trump will sign an executive order regarding the industry after the president threatened to shut down websites he accused of stifiling conservative voices. The heads of the two most prominent social media companies, Twitter (TWTR) and Facebook (FB), appear on different sides of the issue, as Facebook CEO Mark Zuckerberg told Fox News' Dana Perino that privately-owned digital platforms should not act as the "arbiter of truth," while Twitter CEO Jack Dorsey defended his platform's decision to fact check and place warnings on two of Trump's tweets this week. "Fact check: there is someone ultimately accountable for our actions as a company, and that's me," Dorsey said. "Please leave our employees out of this. We'll continue to point out incorrect or disputed information about elections globally. And we will admit to and own any mistakes we make. This does not make us an 'arbiter of truth.' Our intention is to connect the dots of conflicting statements and show the information in dispute so people can judge for themselves. More transparency from us is critical so folks can clearly see the why behind our actions."
HP Inc. (HPQ) shares fell 11% after the company reported results for the second quarter, with earnings per share beating analysts' estimates and revenue coming in below expectations. The company also provided conservative third quarter guidance and noted that it had some supply chain issues in Q2.
Meanwhile, shares of Boeing (BA) rose 3% after the company said last night that it has resumed production of 737 MAX aircraft at its Renton, Washington factory. "We've been on a continuous journey to evolve our production system and make it even stronger," said Walt Odisho, vice president and general manager of the 737 program. "These initiatives are the next step in creating the optimal build environment for the 737 MAX."
Additionally, Hertz (HTZ) shares dropped 13% after activist investor Carl Icahn disclosed in a regulatory filing last night that he has exited his stake in the rental car company.
MAJOR MOVERS: Among the noteworthy gainers was Diversified Healthcare Trust (DHC), which rose 15% after being named to join the S&P 600. Also higher were Triumph (TGI) and Dollar Tree (DLTR), which gained a respective 36% and 11% after reporting quarterly results.
Among the notable loser was Iovance Therapeutics (IOVA), which slid 15% after announcing an offering of $500M of common stock. Also lower was Plantronics (PLT), which fell 10% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 175.91, or 0.69%, to 25,724.18, the Nasdaq was up 92.17, or 0.98%, to 9,504.53, and the S&P 500 was up 27.30, or 0.90%, to 3,063.43.
