The major averages are higher at midday following a busy morning of earnings updates as well as a GDP report that showed a strong bounce back from the equally sharp contraction seen in the prior quarter. The Nasdaq is leading among the indexes as investors brace for a torrent of big tech earnings after the closing bell, including reports from Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL) and Facebook (FB).
ECONOMIC EVENTS: In the U.S., Q3 GDP growth surged 33.1%, bouncing from the 31.4% contraction in Q2. Initial jobless claims fell 40,000 to 751,000 in the week ended October 24.
On the stimulus front, House Speaker Nancy Pelosi said in a letter dated today to Treasury Secretary Steven Mnuchin that she's awaiting the Trump Administration's "promised responses on multiple items of critical importance." She added, "Your responses are critical for our negotiations to continue."
In Europe, the ECB maintained the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility. In addition, the ECB stated along with its monetary policy decisions: "The new round of Eurosystem staff macroeconomic projections in December will allow a thorough reassessment of the economic outlook and the balance of risks. On the basis of this updated assessment, the Governing Council will recalibrate its instruments, as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favourable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path."
TOP NEWS: As earnings season continues in full swing, Gilead (GILD) shares were 1.5% lower at midday after the company reported upbeat results but narrowed its earnings and product sales guidance for fiscal 2020. Of note, the company said that it expects its core business to continue gradually recovering heading into the fourth quarter and first half of 2021. Following the results, several analysts cut their price targets on Gilead, with BMO Capital's Matthew Luchini saying that the updated revenue and earnings guidance was due to lower than expected demand for Veklury, the company's COVID-19 drug.
Shares of Ford (F) gained 3% after the car maker reported better than expected Q3 results, with the company saying it now expects positive adjusted company EBIT for FY20.
Also in positive territory following its quarterly report was Visa (V), whose shares were 1.5% higher near midday following its upbeat Q4 results. Though several analysts lowered their price targets on the stock following the report, Morgan Stanley's James Faucette said that the card company's momentum heading into the December quarter is "promising."
Pinterest (PINS) shares surged 26% higher after the company reported better than expected Q3 results, with global monthly active users rising 37% year-over-year in the quarter. Following the report, JPMorgan and MKM Partners upgraded the stock to Buy-equivalent ratings, with MKM's Rohit Kulkarni saying the "big" Q3 earnigns beat and above-consensus Q4 guidance demonstrates that the company's trend of accelerating user growth and monetization is "clearly sustainable."
Meanwhile, eBay (EBAY), shares fell 7% after the company reported lower than expected Q3 results and provided conservative guidance for Q4 and FY20, although Stifel said the guidance picture may have been confused by the company starting to consider its Classifieds segment as discontinued operations..
In non-earnings news, shares of Marvell Technology (MRVL) are down about 1% after the company confirmed plans to acquire Inphi Corporation (IPHI) in a cash and stock deal. Under the terms of the definitive agreement, the transaction consideration will consist of $66 in cash and 2.323 shares of stock of the combined company for each Inphi share. Upon closing of the transaction, Marvell shareholders will own approximately 83% of the combined company and Inphi stockholders will own approximately 17%. Shares of Inphi jumped 28% after the news.
MAJOR MOVERS: Among the noteworthy gainers was Alliance Data (ADS), which rose 15% after it reported upbeat quarterly results and announced a deal to acquire technology-driven digital payments company Bread for $450M. Also higher after reporting quarterly results were Criteo (CRTO) and Comcast (CMCSA).
Among the notable losers was Tricida (TCDA), which dropped 49% after announcing that it held an End-of-Review conference as a Type A meeting with the Division of Cardiology and Nephrology of the FDA on October 20. Also lower were 1-800-Flowers.com (FLWS), Nokia (NOK), and Spotify (SPOT), which fell 16%, 19%, and 6%, respectively, after reporting quarterly results.
INDEXES: Near 1 pm ET, the Dow was up 53.69, or 0.20%, to 26,573.64, the Nasdaq was up 158.02, or 1.44%, to 11,162.89, and the S&P 500 was up 28.63, or 0.88%, to 3,299.66.
