The major averages had a mixed day, with modest moves, to close out the week as investors weighed a raft of domestic economic data against ongoing virus uncertainties and the lack of progress toward another U.S. stimulus package. Meanwhile, Reuters reported that a review of the "phase 1" trade deal between the U.S. and China that was initially slated for Saturday will be delayed due to scheduling issues. No new date has been agreed upon yet for the talks, the report said.
ECONOMIC EVENTS: In the U.S., retail sales increased 1.2% in July, and were up 1.9% excluding autos. The former figure is a little weaker than expected, while the latter is a bit stronger than forecast. Industrial production rose 3.0% in July and capacity utilization rose to 70.6%. Business inventories dropped 1.1% in June, marking a sixth straight decline, while business sales climbed another 8.4% in June. The University of Michigan consumer sentiment survey inched up 0.3 tics to 72.8 in the preliminary August reading following a 72.5 reading in July. Second quarter nonfarm productivity was reported to have grown at a 7.3% rate, bouncing from the 0.3% contraction estimated for the first quarter.
TOP NEWS: Two of Wall Street's bears on Tesla (TSLA) have softened their stances as analysts at both BofA and Morgan Stanley have raised their ratings on the stock to the equivalent of a hold. Morgan Stanley's Adam Jonas upgraded Tesla to Equal Weight from Underweight with a price target of $1,360, up from $1,050, as he is now assuming the benefits of a transfer of supply of batteries and EV powertrains to third party carmakers as part of his base case scenario. Meanwhile, BofA analyst John Murphy upgraded Tesla to Neutral from Underperform with a price target of $1,750, up from $800, as he argues that the company's "unfettered access" to low-cost capital remains a key advantage that should be leveraged to accelerate growth.
Shares of CureVac BV (CVAC) opened at nearly triple their $16 initial public offering price, with the stock's first trade coming in at $44 per share a bit after noon on Friday. The company, which is advancing its mRNA vaccine program against coronavirus among its other drug research efforts, closed its first day of trading at $55.90.
China's iQIYI (IQ) fell 11% in New York trading after the company disclosed that the SEC's Division of Enforcement is seeking certain financial and operating records following a report issued by short-seller firm Wolfpack Research in April 2020. Shares of Baidu (BIDU), the company's majority stakeholder, also slid 6% following the SEC probe news and its own earnings report.
In other earnings news, Applied Materials (AMAT) shares gained about 4% after the company reported strong results and provided what Stifel analyst Patrick Ho said was "a relatively optimistic outlook" for the rest of 2020.
MAJOR MOVERS: Among the noteworthy gainers was Mesoblast (MESO), which jumped 51% after the company announced that the Oncologic Drugs Advisory Committee of the U.S. FDA voted 9-to-1 in favor that the available data support the efficacy of remestemcel-L in pediatric patients with steroid-refractory acute graft versus host disease. Also higher was McKesson (MCK), which gained 4% after the U.S. Department of Health and Human Services and Department of Defense announced that the company will be a central distributor of future COVID-19 vaccines in support of Operation Warp Speed.
Among the notable losers was Paysign (PAYS), which dropped 22% after the company reported second quarter results last night. Also lower was GSX Techedu (GSX), which fell 11%. The company, like iQIYI, is domiciled in China, trades in the U.S., and has been accused of fraud by short-selling research firms.
INDEXES: The Dow gained 34.30, or 0.12%, to 27,931.02, the Nasdaq declined 23.20, or 0.21%, to 11,019.30, and the S&P 500 dipped 0.58, or 0.02%, to 3,372.85.
