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

Wall Street’s main stock indexes gained, led by tech shares, amid investor expectations for more fiscal spending, while COVID-19 vaccines are rolled out in coming months.

The tech-heavy Nasdaq Composite Index increased 0.6%. The S&P 500 Index was up 0.5% and the Dow Jones Industrial Average added 0.2%.

Intel made big headlines today. The stock spiked almost 8% after the chipmaker announced that its CEO Bob Swan will be replaced by VMware CEO Pat Gelsinger, effective Feb. 15, 2021. Omar Ishrak, independent chairman of the Intel board commented “the board concluded that now is the right time to make this leadership change to draw on Pat’s technology and engineering expertise during this critical period of transformation at Intel. The board is confident that Pat, together with the rest of the leadership team, will ensure strong execution of Intel’s strategy to build on its product leadership and take advantage of the significant opportunities ahead as it continues to transform from a CPU to a multi-architecture XPU company.”

In M&A news, Telefonica jumped about 9% after announcing the sale of its telecommunications division to American Towers for €7.7 billion ($9.41 billion), payable in cash. The deal fits into Telefonica’s plan to focus on reducing its debt and to actively managing its portfolio to create value. According to Telefonica President José María Álvarez-Pallete, “this is a deal that makes strategic sense within our roadmap.” The agreement includes the sale of about 30,722 phone towers across Europe and Latin America.

In chip deals, Qualcomm shares were up 1.4% after the supplier of mobile phone chips agreed to buy chip startup Nuvia for about $1.4 billion. With this acquisition, Qualcomm will be able to put Nuvia’s processors into its portfolio of products, to power flagship smartphones, next-generation laptops, and digital cockpits, as well as advanced driver assistance systems. Nuvia, which has developed a CPU (central processing unit) processor technology to be used in server chips, has expertise in Systems on a Chip (SoC) and power management for compute-intensive devices and applications.

In earning-related news, shares of Urban Outfitters fell 1.7% as the apparel maker announced dismal holiday sales and the departure of the CEO of its namesake brand. The company’s net sales for the two months ended December 31, 2020 plunged 8.4% year-over-year due to weak retail store sales as customer traffic continued to be impacted by the COVID-19 pandemic. Urban Outfitters’ comparable retail segment net sales were down 9% as the strong double-digit increase in digital channel sales was not enough to offset lower store sales. Meanwhile, the wholesale segment’s net sales decreased 1% in the holiday period.

Meanwhile, Target Corp. slipped less than 1% even as the retailer benefited from booming online sales growth during the holiday period. Target saw its comparable sales grow 17.2% in November through December as comparable digital sales spiked 102%. Additionally, the retail chain’s store traffic rose 4.3%. Sales growth was strongest in the retailer’s home and hardlines segment. The retailer said that its contactless same-day services, which includes ordering online and picking up at the store, with curbside pickup, contributed to the performance. In December alone, customers bought 150 million items using the Drive Up and Order Pickup services, four times more than during the same period last year. We’ve seen continued strong sales trends in the new year, commented Target CEO Brian Cornell.

Shares of Big Lots declined 1.4% after the retailer forecasted 4Q earnings that were below analysts’ expectations. Big Lots estimates 4Q earnings to generate between $2.40-$2.50 per share, lagging analysts’ expectations of $3.02 per share. Meanwhile, the company expects 4Q gross margin to be flat year-over-year. The company’s quarter-to-date comparable sales (comps) increased 7.5%. Furthermore, e-commerce sales soared 135% quarter-to-date. The company expects to report 4Q results on February 25.

In healthcare-related earnings news, GenMark Diagnostics rose 2.5% as the company announced an 84% year-over-year jump in its preliminary fourth-quarter revenue to about $50 million. The company said that it anticipates 2020 revenue of $171 million, reflecting 95% growth. Notably, GenMark estimates ePlex platform revenue will rise 138% to $45 million in 4Q and 155% to $152 million in 2020. The company enhanced its manufacturing capacity by over 75% year-over-year with the completion of the first of its two new production lines in 4Q 2020.