Equity futures were marginally lower in early trading following yesterday's rally on Wall Street and the major averages closed out in the red, with the Nasdaq the worst performer. The sluggishness in equities follows a strong rally yesterday that saw the S&P 500 gain over 2% in its best single day move since June.
ECONOMIC EVENTS: In the U.S., little economic data of note was reported.
TOP NEWS: Shares of Target (TGT) closed 6.8% lower after the company's report of fourth quarter adjusted EPS and revenue that beat consensus forecasts. The company, which reported that its comparable sales grew 20.5% in Q4, added that its "off to a strong start" in February, with comps up 20%. However, in "the face of continued uncertainty," the company is not providing sales and EPS guidance for fiscal 2021 and beyond. In addition, Target announced plans to invest roughly $4B annually during the next several years to "continue scaling capabilities across its retail platform." The company said it would open roughly 100 Ulta Beauty at Target (ULTA) shop-in-shops in 2021, and that it has introduced a new Apple (AAPL) shopping destination online and in 17 stores. The retail giant also said it intends to open 30-40 new stores each year as well as five more sortation centers in 2021.
In other retail earnings news, Kohl's (KSS) also reported holiday quarter adjusted EPS and revenue that beat consensus forecasts. Michelle Gass, Kohl's CEO, said the company is "pleased with the progress we are making against our strategic initiatives and we are set up to deliver a multi-year improvement in sales and operating margin."
Outside of retail, shares of Zoom Video Communications (ZM) initially rose but reversed to close 9% lower after the company crushed earnings per share estimates for its fiscal fourth quarter. Zoom additionally issued an upbeat forecast for the current quarter, after which the shares were upgraded to Overweight at Piper Sandler.
In COVID-19 news, President Biden will announce today that Merck (MRK) will help make Johnson & Johnson's (JNJ) single-shot coronavirus vaccine, Laurie McGinley and Christopher Rowland of Washington Post report, citing senior administration officials. Under the arrangement, Merck will dedicate two facilities in the United States to Johnson & Johnson's shots, officials told the paper.
Additionally, Bloomberg reported that a federal jury in Waco, Texas has told Intel (INTC) to pay $2.18B after it lost a patent infringement trial over technology related to making chips.
MAJOR MOVERS: Among the noteworthy gainers was Perion Network (PERI), which rose 19% after raising its fiscal 2021 revenue guidance. Also higher was Rocket Companies (RKT), whose 71% move higher today was attributed to the stock being a target of Reddit message board traders, given its high short interest. In response, Wells Fargo analyst Donald Fandetti said that while the company's recently reported Q4 results were "good," they were "not good enough to support this move" on the third trading day after earnings.
Among the notable losers was Morphic (MORF), which declined over 16% after its $200M common stock offering. Also lower were FibroGen (FGEN) and Novavax (NVAX), which fell a respective 24.7% and 14.3% after reporting quarterly results. In addition, FibroGen disclosed it has been told by the FDA that an advisory panel will be held for roxadustat, which Citi analyst Joel Beatty called an "unusual last-minute decision" by the regulator.
INDEXES: The Dow fell 143.99, or 0.46%, to 31,391.52, the Nasdaq lost 230.04, or 1.69%, to 13,358.79, and the S&P 500 declined 31.53, or 0.81%, to 3,870.29.
