The major averages are higher at midday amid a firming in risk appetites following selling action yesterday that knocked the Nasdaq down nearly 2% and the S&P 500 down almost 1%. Of note, Treasury Secretary Janet Yellen has attempted to blunt the impact of her comments yesterday where she said rates may need to rise to keep the economy from overheating. She has clarified that she was not making a forecast or advocating for a rate hike from the Fed.
ECONOMIC EVENTS: In the U.S., ADP reported private payrolls increased 742,000 in April, missing the consensus forecast for 785,000 payroll additions. The final April Markit services and composite indexes were revised higher versus the preliminary reading. The services PMI was bumped up 1.6 ticks to 64.7 following the 2.5 point rise in the preliminary to 63.1, while the final composite index for April was revised 1.3 points higher to 63.5 from the 62.2 flash reading. The ISM-NMI services index slipped 1 point to a 62.7 figure from a record-high of 63.7 in March
TOP NEWS: Shares of General Motors (GM) were 4% higher near noon after the car maker reported better than expected first quarter adjusted earnings and provided guidance for fiscal 2021. The company said that it is "highly confident" in its FY21 guidance, adding that the current semiconductor chip shortage won't impact its growth or electric vehicle initiatives.
Lyft (LYFT) shares, on the other hand, fell 4% after the ride-sharing service reported worse than expected first quarter losses, with active riders in the quarter falling 36.4% year-over-year, and Q2 revenue guidance that was lighter than expected. Following the report, no fewer than five analysts raised their price targets on Lyft shares, with Barclays analyst Ross Sandler saying that demand continues to outpace supply, which is helping offset the higher driver incentives and increase unit economics.
In other earnings news, T-Mobile (TMUS) shares rose 5% after the carrier reported upbeat Q1 results, including 1.4M total net additions and 1.2M postpaid net additions in the quarter. In addition, the company raised its fiscal 2021 postpaid net additions view.
In non-earnings news, Facebook (FB) was in focus after its Oversight Board upheld the social media giant's decision on January 7 to restrict then-President Donald Trump's access to posting content on his Facebook page and Instagram account. The company said it was "pleased" with the board's decision and will seek to determine an action that is "clear and proportionate." In the meantime, Trump's accounts will remain suspended, the company added.
Shares of Peloton (PTON) are down 13% near midday following the announcement of two separate voluntary recalls of the company’s Tread+ and Tread treadmills. KeyBanc analyst Edward Yruma called the voluntary recall "a clear negative," telling investors in a research note that he thinks that the solution on Tread may be simpler while the high running surface of the Tread+ may require a more substantive fix.
Jessica Alba's Honest Company (HNST), which identifies itself as "a mission-driven, digitally-native brand focused on leading the clean lifestyle movement," priced 25.81M shares at $16 in its initial public offering and began trading at $21.22 per share.
Pfizer Canada (PFE) and BioNTech (BNTX) announced that Health Canada has expanded the Interim Order authorization for their COVID-19 vaccine to include individuals 12 to 15 years of age. Meanwhile, a CDC spokeswoman told Bloomberg in an email that the CDC has scheduled an advisory committee meeting for May 12 to consider the use of the COVID-19 vaccine developed by Pfizer and BioNTech in teenagers.
MAJOR MOVERS: Among the noteworthy gainers was Athenex (ATNX), which rose 31% after it acquired Kuur Therapeutics for $185M. Also higher was Hayward (HAYW), which gained 29% after reporting quarterly results.
Among the notable losers was HollyFrontier (HFC), which fell 6% after entering into a definitive agreement to acquire Puget Sound Refinery from Shell Oil Products U.S. Royal Dutch Shell Class A (RDS.A) shares were up 3% following the news. Also lower was Esperion (ESPR), which dropped 25% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 139.80, or 0.41%, to 34,272.83, the Nasdaq was up 65.73, or 0.48%, to 13,699.23, and the S&P 500 was up 19.58, or 0.47%, to 4,184.24.
