The major averages are lower at midday amid a continued stimulus stalemate in Washington. While many of the first round of earnings reports have been solid, the big test in that regard will come next week, when the volume of reporting will increase. Intel (INTC) has been a drag on the tech sector with its post-earnings slide and a post-earnings pullback from Seagate (STX) is not helping in that area.
ECONOMIC EVENTS: In the U.S., flash PMIs from Markit showed continued expansion and posted their best levels since early 2019. The manufacturing PMI ticked up 0.1 point to 53.3 in October, while the preliminary services index bounced 1.4 points to 56.0 in October.
TOP NEWS: Shares of Intel are 11% lower near noon following the company's September quarter report last night. BofA analyst Vivek Arya downgraded Intel to Underperform from Neutral with a price target of $45, down from $60, after its "weak" results, telling investors that he is concerned that the company offered no plan or update on fixing its manufacturing challenges. Arya, who was among many on Wall Street to cut their price targets for Intel, further points to increasing competition from the "nimbler" Nvidia (NVDA) and AMD (AMD).
In other earnings news, American Express (AXP) issued a mixed report this morning, with earnings that missed consensus and revenue that beat it. "While our business continues to be significantly affected by the impacts of the pandemic, our third quarter results have increased our confidence that our strategy for managing through the current environment is the right one," said Chairman and CEO Stephen Squeri. AmEx shares are down 3% at midday following the results.
Gilead Sciences (GILD) announced last night that the Food and Drug Administration has granted a full approval for Veklury, or remdesivir, for the treatment of patients with COVID-19 requiring hospitalization. "Previously authorized by the FDA for emergency use to treat COVID-19, Veklury is now the first and only approved COVID-19 treatment in the United States," Gilead noted.
MAJOR MOVERS: Among the noteworthy gainers was Mattel (MAT), which rose 11% after reporting better than expected quarterly results and providing a "positive" outlook for Q4 and fiscal 2020. Also higher were Barclays (BCS) and Capital One (COF), which gained a respective 5% and 1% after reporting quarterly results.
Among the notable losers was Seagate, which declined 2% after reporting quarterly results and providing Q2 guidance. Also lower after reporting quarterly results were Limelight Networks (LLNW) and Bloomin' Brands (BLMN), which fell 29% and 13%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 168.88, or 0.60%, to 28,194.78, the Nasdaq was down 61.14, or 0.53%, to 11,444.86, and the S&P 500 was down 10.83, or 0.31%, to 3,442.66.
