Stocks remain near record highs amid continued optimism that vaccines will allow a return to normal next year. Moreover, a stimulus deal is looking increasing likely by the end of this year following reporting that Democrats have signaled a readiness to trim their demands. At the same time, virus cases continue to climb in the U.S. and Europe, leading to more restrictions. A report that Pfizer (PFE) is lowering its projections for vaccine doses that will be available this year took some wind out of the market's sails and caused a late day dip.
ECONOMIC EVENTS: In the U.S., initial jobless claims dropped 75,000 to 712,000 in the week ended November 28, which was a much larger than expected decline. Markit's services PMI rose to 58.4 in the final November print versus the 57.7 preliminary and is up 1.5 points from the 56.9 in October. The ISM services index slipped 0.7 ticks to 55.9 in November, which was weaker than forecast.
In energy news, Reuters reported that OPEC and Russia have agreed to a small oil production boost from January by 500,000 barrels per day, but failed to reach a compromise over a broader and longer term policy for the remainder of 2021.
TOP NEWS: Late in the day, The Wall Street Journal reported that Pfizer expects to ship half of the COVID-19 vaccine doses it originally planned for this year because of supply-chain problems, cutting its rollout estimate to 50M doses in 2020 from the previously expected 100M doses. The report prompted a decline in shares of the drugmaker, partner BioNTech (BNTX) and in the broader market.
Shares of Boeing (BA) closed 6% higher after the company announced that Ryanair (RYAAY) is placing a firm order for 75 additional 737 MAX airplanes, increasing its order book to 210 jets. "Ryanair will continue to play a leading role in our industry when Europe recovers from the COVID-19 pandemic and air traffic returns to growth across the continent. We are gratified that Ryanair is once again placing its confidence in the Boeing 737 family and building their future fleet with this enlarged firm order. Boeing remains focused on safely returning the full 737 fleet to service and on delivering the backlog of airplanes to Ryanair and our other customers," said Dave Calhoun, president and CEO of Boeing.
Chevron (CVX) lowered its spending plans, announcing a 2021 organic capital and exploratory spending program of $14B that includes over $300M for investments to advance the energy transition. Chevron's capital guidance of $14B-$16B annually from 2022 to 2025 is "significantly lower" than its previous guidance of $19B-$22B, which excluded Noble Energy, Chevron noted.
In M&A news, Flutter Entertainment (PDYPY) announced that it has entered into a conditional agreement to acquire the entire 37.2% interest in FanDuel which is currently held by Fastball for $4.175B. The deal will increase Flutter's ownership stake in FanDuel to 95%.
In spinoff news, XPO Logistics (XPO) announced a plan to pursue a spin-off of 100% of its logistics segment as a separate publicly traded company. If completed, the spin-off will result in two separate businesses: XPORemainCo, a global provider of less-than-truckload, or LTL, and truck brokerage transportation services; and NewCo, a contract logistics provider. Meanwhile, International Paper (IP) announced a plan to pursue a spin-off of the company's Printing Papers segment into a standalone, publicly traded company. Following the completion of the transaction, International Paper expects to have approximately $17B in sales, while SpinCo will have approximately $4B in sales.
Shares of Splunk (SPLK) plunged 23.25% after the data-analytics company reported a wider than expected third quarter loss that prompted downgrades at no less than six Wall Street research firms.
Meanwhile, shares of movie theater operators dropped in afternoon trading after AT&T's (T) Warner Bros. Pictures Group announced that it has committed to releasing its 2021 film slate via a "unique, consumer-focused distribution model" in which Warner Bros. will continue to exhibit the films theatrically worldwide, while adding an exclusive one month access period on the HBO Max streaming platform in the U.S. concurrent with the film's domestic release. Some of the films included in this release slate are "Matrix 4," "Mortal Kombat," "The Suicide Squad," "Godzilla vs. Kong," "In the Heights," and "Space Jam: A New Legacy."
MAJOR MOVERS: Among the noteworthy gainers was Waddell & Reed (WDR), which surged 50.5% after it agreed to be acquired by Macquarie (MQBKY) at a price of $25 per share. Also higher was Zscaler (ZS), which jumped 26.5% after reporting quarterly results. In addition, Tesla (TSLA) shares rose 4.3% after Goldman Sachs analyst Mark Delaney upgraded the stock to Buy from Neutral and raised his price target on the shares to $780 from $455.
Among the notable losers was Codexis (CDXS), which declined almost 10% after its 4.289M share spot secondary priced at $17.50 per share. Also lower was Kroger (KR), which fell 4.4% following the company's quarterly earnings report.
INDEXES: The Dow rose 85.73, or 0.29%, to 29,969.52, the Nasdaq gained 27.82, or 0.23%, to 12,377.18, and the S&P 500 declined 2.29, or 0.06%, to 3,666.72.
