Wall Street’s main indexes rallied as investors grew optimistic that Congress could be getting closer to clinching a deal for a fresh stimulus package, as the spiraling COVID-19 cases are threatening to slow down the recovery from the economic crisis.
The Dow Jones Industrial Average and the S&P 500 Index both climbed 1.1%. Meanwhile, the tech-heavy Nasdaq Composite Index advanced 0.8%.
China’s Baidu surged 10% amid a Reuters report that the search engine leader is considering producing its own electric vehicles and has held talks with automakers about the possibility. The company, which also develops autonomous driving technology and internet connectivity infrastructure, is looking into contract manufacturing, or creating a majority-owned venture with automakers.
In more automotive news, General Motors announced plans to invest $76 million in its two US manufacturing plants to boost the production capacities of its Chevrolet Silverado and GMC Sierra pickup trucks. The vehicle maker will inject $70 million in its Tonawanda, New York engine factory and over $6 million in its Parma, Ohio metal stamping facility. According to the company, “The Tonawanda investment will be used to increase capacity on the engine block machining line and the Parma investment will be used to construct four new metal assembly cells to support increased truck production volumes.”
Coming to regulatory news, Uber Technologies has been fined $59 million for “refusing” to provide the California Public Utilities Commission (CPUC) with information regarding sexual assault and sexual harassment claims. The CPUC determined that if Uber fails to pay the penalty within 30 days, its permits to operate as a transportation network company (TNC) and a charter-party carrier will be suspended. Shares fell less than 1%.
Also, Barclays was hit with a £26 million ($34.9 million) fine by the UK’s Financial Conduct Authority (FCA) for failures in how the bank treated their consumer credit customers who fell into arrears. Specifically, the FCA found that retail and small business customers in financial distress, who had been offered consumer credit by Barclays Bank UK PLC, Barclays Bank PLC and Clydesdale Financial Services between April 2014 and December 2018, were treated “poorly” when they fell into arrears. The UK watchdog added that Barclays failed to treat customers “fairly or to act with due skill, care and diligence.”
In earnings news, Canada’s Hexo Corp. rose almost 4% after the cannabis company generated better-than-expected revenues and posted a lower-than-feared EBITDA loss in the first quarter. The company’s 1Q revenues of C$29.5 million surged 103% year-over-year and came ahead of the Street’s estimates of C$14.5 million. Hexo reported an adjusted EBITDA loss of C$0.42 million in 1Q, compared to a loss of C$3.25 million in the year-ago period. Analysts had forecasted a loss of C$2.8 million for the reported quarter. Despite the upbeat results, Oppenheimer analyst Rupesh Parikh stuck to a Hold rating, arguing that the company is “driven by a continued challenging industry backdrop, valuation, and still muted profit potential in the intermediate term.”
In M&A news, Alarm.com jumped 5% after announcing the acquisition of indoor gunshot detection technology provider, Shooter Detection Systems (SDS), for an undisclosed sum. Alarm.com, which offers cloud-based services for remote control, home automation, and monitoring services, said that the acquisition will play a crucial role in the expansion of its commercial plans and provide premier gunshot detection solutions to its partners’ customers. Under the terms of the deal, SDS will become a subsidiary of Alarm.com and continue to be led by its current management team.
Last, but not least, Aon advanced more than 2% after extending its long-term partnership with parametric technology firm CelsiusPro. CelsiusPro is a Swiss-based insurance technology firm specializing in risk modeling, underwriting and administration of index-based insurance products in the context of weather risk and natural disasters. The collaboration between Aon, which offers a broad range of risk, retirement and health solutions, and CelsiusPro has culminated in parametric data being delivered within a few hours of a triggering event, and the subsequent claim sometimes being paid within 48 hours.
