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Thursday’s Market Snapshot: Here’s What You Need To Know Right Now
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Thursday’s Market Snapshot: Here’s What You Need To Know Right Now

US stock indexes are rising amid speculation that more fiscal stimulus maybe needed to help the economy recover as a resurgence in Covid-19 cases surfaces. US initial jobless claims for the week ended Sept. 19 increased by 4,000 to 870,000. Wall Street analysts had expected a reading of 840,000. 

The tech-heavy Nasdaq Composite Index is leading the gains among US indexes and is up 1.1%. The big tech stocks, including Apple, Microsoft, Nvidia, and Netflix are advancing between 1% and 3%. The Dow Jones Industrial Average and the S&P 500 Index are both up 0.9%.

In the doghouse: Nikola shares are losing another 5% taking their five-day drop to 41%. Negative sentiment today appears to be driven by comments made by short-seller Hindenburg Research head Nathan Anderson to The Wall Street Journal that more news will emerge about the electric-truck maker. On Sept. 10, Hindenburg issued a report accusing Nikola of being an “intricate fraud built on dozens of lies” and misleading investors.

RBC Capital analyst Joseph Spak this week slashed the stock’s price target to $21 from $49 and maintained a Hold rating, saying that “Nikola’s stock will be in ‘penalty box’ for a while as they look to rebuild credibility with Street.”

Earnings: Shares in BlackBerry are soaring 7% after the company’s second-quarter earnings exceeded analysts’ expectations fueled by demand for its security software products during the coronavirus pandemic. Total revenue for the second quarter ended Aug. 31 rose to $259 million from $244 million, surpassing the Street consensus of $237.03 million. Non-GAAP earnings amounted to 11 cents per share versus analysts’ forecast of a profit of 2 cents per share.

Darden Restaurants is up 8% as the company expects 2Q earnings in the range of $0.65 to $0.75 per share, surpassing the Street consensus of $0.35 per share. The restaurant chain operator anticipates revenues to be 82% of last year’s sales of $2.06 billion, which would be about $1.69 billion in the November-ending second quarter. Meanwhile, analysts had expected 2Q revenue of $1.77 billion.

Stock bonanza: Penn National Gaming stock is diving almost 5% as the gaming company announced the start of a public offering to sell 14 million shares of its common stock. The gaming company will grant the underwriters a 30-day option to purchase up to 2.1 million of additional shares of its common stock. 

Based on Wednesday’s close and assuming the issuance of the greenshoe, the transaction would raise about $1 billion in cash, Deutsche Bank analyst Carlo Santarelli estimated. Santarelli, who has a Sell rating on the stock with a $22 price target (65% downside potential), says he believes the raised capital is likely to be put to work towards competing in the highly promotional sports betting arena. 

While we would not view the transaction as a positive for shares, we do believe it was a necessary strategic decision, given the run in shares and the unrealistic, in our opinion, implied value of the sports and iCasino verticals, the analyst said.

Investors turned back to Dollar Tree stock. The stock is up almost 3% as the company said it resumed its share repurchase program, after being temporarily suspended since March due to uncertainties related to the COVID-19 pandemic. Dollar Tree currently has $800 million authorization remaining under its existing repurchase plan.

Dividend hike: New Residential announced a 50% increase in its quarterly dividend to $0.15 per share sending shares up almost 3%. This marks the company’s second consecutive dividend increase this year. The new dividend will be payable on Oct. 30 to shareholders of record on Oct. 5.

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