The major averages have reversed their early losses and turned positive as Federal Reserve Chairman Jerome Powell gives his second day of testimony to lawmakers and has reaffirmed his view that the economy needs continued support. Also helping to improve risk sentiment is the news that FDA staff have determined ahead of a review meeting later this week that they view J&J's COVID-19 vaccine candidate both safe and effective.
ECONOMIC EVENTS: In the U.S., new home sales rose 4.3% to a 923,000 pace in January, which was much stronger than expected.
Fed Chair Powell reprises his Monetary Policy Report to the House Financial Services Committee today following yesterday's Senate testimony, during which he confirmed the Fed remains committed to its ultra accommodative policy stance.
TOP NEWS: In COVID-19 news, the FDA released its detailed analysis of Johnson & Johnson's (JNJ) single-shot vaccine ahead of a meeting of a committee of outside experts on Friday to evaluate the analyses by both the agency and the company. In briefing documents ahead of Friday's panel meeting, FDA staff said that "based on the totality of scientific evidence available, including data from adequate and well-controlled trials, if available, it is reasonable to believe that the product may be effective to prevent, diagnose, or treat such serious or life-threatening disease or condition that can be caused by SARS-CoV-2." In the documents, the staff of the FDA also wrote that safety analysis "supported a favorable safety profile with no specific safety concerns identified that would preclude issuance of an EUA," or Emergency Use Authorization.
Shares of Lowe's (LOW) are 4% lower near noon despite the company beating consensus Q4 adjusted EPS and revenue expectations while reporting comparable sales for the U.S. home improvement business increased 28.6%. Lowe's said that if its positive trends continue, FY21 revenue could approach $86B, which is above the current $85.4B consensus forecast, adding that it is "confident" in taking market share and improving operating income in FY21.
In other earnings news, Square (SQ) has slid 5% near noon after the company reported what Piper Sandler analyst Christopher Donat called "an expense-driven earnings beat." While many metrics were "impressive," they were not good enough to justify the 19% year-to-date increase in the shares, said Donat. Of note, Square also announced that it has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170M. Combined with Square's previous purchase of $50M in bitcoin, bitcoin now "represents approximately five percent of Square's total cash, cash equivalents and marketable securities as of December 31, 2020."
Fisker (FSR) shares are 28% higher after the electric car hopeful announced it has entered into a memorandum of understanding with Hon Hai Technology Group, or "Foxconn," supporting a project to develop a "breakthrough electric vehicle." The proposed collaboration, codenamed "Project PEAR," will see Fisker and Foxconn jointly develop a new segment vehicle and Foxconn manufacture the vehicle at projected annual volumes of more than 250,000, the company stated. Fisker Chairman and CEO Henrik Fisker said the two companies plan to "create a vehicle that crosses social borders, while offering a combination of advanced technology, desirable design, innovation and value for money, whilst delivering on our commitment to create the world's most sustainable vehicles."
Exelon (EXC) announced its board has approved a plan to separate Exelon Utilities, comprised of the company's six regulated electric and gas utilities, and Exelon Generation, its competitive power generation and customer-facing energy businesses into two publicly traded companies. "The separation gives each company the financial and strategic independence to focus on its specific customer needs, while executing its core business strategy," the company stated.
MAJOR MOVERS: Among the noteworthy gainers was Poseida Therapeutics (PSTX), which rose 16% after announcing a presentation that will include a case study of a patient with metastatic castration-resistant prostate cancer treated with P-PSMA-101 at a dose of 0.25 x 10e6 cells/kg "who showed a marked decrease in PSA expression levels of more than 50% in the first three weeks post treatment and is continuing on trial." Also higher was Owens & Minor (OMI), which gained 37% after reporting quarterly results.
Among the notable losers was Workhorse (WKHS), which dropped 5% further after sliding yesterday following news that the U.S. Postal Service awarded a 10-year contract to Oshkosh Defense (OSK) to manufacture a new generation of U.S.-built postal delivery vehicles. Oshkosh shares have gained another 5% this morning after yesterday afternoon's news of the deal. Also lower were Entercom (ETM) and Overstock.com (OSTK), which fell 15% and 14%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was up 294.13, or 0.93%, to 31,831.48, the Nasdaq was up 79.44, or 0.59%, to 13,544.64, and the S&P 500 was up 30.86, or 0.80%, to 3,912.23.
