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Tag Archives: UnitedHealth
Dow Jones Futures Fall: JPMorgan Earnings, UnitedHealth Top; Tesla Slashes U.S., European Prices
Dow Jones futures fell solidly early Friday, along with S&P 500 futures and Nasdaq futures. Tesla slashed prices in the U.S. and Europe, following big cuts in China and key Asia markets last week, sending TSLA stock and other automakers tumbling. JPMorgan, Bank of America, Delta Air Lines and UnitedHealth earnings topped views before the open. But those stocks were generally lower.
X
The stock market rally gained some more ground on Thursday, though the S&P 500 hit resistance at a critical area.
The much-anticipated CPI inflation report showed cooling price pressures largely in line with expectations, though service price gains were a mixed picture. Still, the slowing inflation trend should continue for several months, raising hopes that the Federal Reserve will soon end rate hikes.
Investors should be looking to add exposure, carefully. This market is prone to pullbacks, and could be due for one. Meanwhile, many leading stocks are now extended from at least early buy points. Exxon Mobil (XOM) and Celsius Holdings (CELH) are still actionable.
XOM stock and Celsius are on the IBD 50. CELH stock is on SwingTrader and on the IBD Leaderboard watchlist.
Tesla Price Cuts
Tesla cut prices sharply in the U.S., making more of its models eligible for tax credits of up to $7,500. U.S. Model 3 prices have been reduced 6%-14%, depending on the trim. The base Model Range Standard Range RWD was cut $3,000 to $43,990, which means it would be $36,240 after the IRA tax credits. The Performance version was cut $9,000 to $53,990, getting under the $55,000 limit for tax credits. The base Model Y has been slashed $13,000, or nearly 20%, to $52,990. The Performance variant has been cut to $56,990, also down $13,000.
Meanwhile, Tesla cut Model 3 and Y prices in at least Austria, France, Germany, the Netherlands, Norway, Switzerland and the U.K.
The price cuts should significantly boost sales in the U.S. and provide a boost in Europe, where backlogs had been falling significantly. But they also raise concerns about Tesla’s prized profit margins.
On Jan. 6, Tesla cut China prices significantly for the second time in less than three months, as inventories swelled despite big year-end incentives and temporary Shanghai plant production halt.
Tesla stock fell 6% in premarket trading. General Motors (GM), Ford (F), Rivian (RIVN) and Lucid (LCID) declined 3%-4%, as Tesla price cuts may undercut their demand and pricing for EVs and other vehicles.
Key Earnings
UnitedHealth (UNH) earnings topped fourth-quarter views early Friday. UNH stock retreated slightly early Friday. Shares have sold off in 2023 along with other health insurers, though it rose Thursday.
Delta Air Lines (DAL) topped Q4 estimates as well and reiterated recent bullish guidance on 2023. But shares fell solidly before the open. DAL stock has spiked in 2023 with the airline group, adding to gains Thursday on bullish preliminary revenue from American Airlines (AAL). Delta is well extended from early entries and is working up the right side of a long, deep base.
JPMorgan Chase (JPM) and Bank of America (BAC) topped fourth-quarter views, while Wells Fargo (WFC) and Citigroup (C) had mixed results.
JPM stock and BofA fell modestly, while Wells Fargo and Citi stock also declined. JPMorgan stock closed Thursday in a buy zone after a traditional breakout. Bank of America and Citigroup stock were near early entries in bottoming bases. WFC stock has more work to do.
Dow Jones Futures Today
Dow Jones futures fell 0.8% vs. fair value. JPM stock and UnitedHealth are both Dow Jones components. S&P 500 futures declined 0.95%. Nasdaq 100 futures fell 1.15%. Tesla stock is weighing on S&P 500 and Nasdaq futures, while all the banks and DAL stock are hitting the S&P 500.
The 10-year Treasury yield rose 4 basis points to 3.49%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally wavered Thursday, with volatile premarket swings continuing into the morning. But as the session wore on, the major indexes calmed down and moved higher before fading somewhat in the day.
The Dow Jones Industrial Average advanced 0.6% in Thursday’s stock market trading. The S&P 500 index climbed 0.3%. The Nasdaq composite rose 0.6%. The small-cap Russell 2000 jumped 1.7%.
U.S. crude oil prices rose 1.3% to $78.39 a barrel, climbing 7.6% over the past six sessions.
Copper climbed 0.8% on Thursday, surging 11.9% over the past six trading days.
The 10-year Treasury yield tumbled 11 basis points to 3.45%, near recent lows. The two-year Treasury yield, more closely tied to Fed policy, hit a three-month low. Markets have almost fully priced in a quarter-point rate hike on Feb. 1, which would be a step down from 50 basis points and 75 basis points in the prior two meetings. Investors also strongly expect another quarter-point hike in March, to a 4.75%-5% range. Right now, markets are betting that’s the end.
Time The Market With IBD’s ETF Market Strategy
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) and Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 0.8%. The VanEck Vectors Semiconductor ETF (SMH) climbed 1.5%.
SPDR S&P Metals & Mining ETF (XME) jumped 2% and the Global X U.S. Infrastructure Development ETF (PAVE) rose 0.8%. U.S. Global Jets ETF (JETS) soared 4.6%, with DAL stock and American Air both key holdings. SPDR S&P Homebuilders ETF (XHB) edged up 0.3%. The Energy Select SPDR ETF (XLE) advanced 1.9%. The Financial Select SPDR ETF (XLF) nudged 0.2% higher, with JPMorgan, Wells Fargo, Citigroup and BAC stock all major components. The Health Care Select Sector SPDR Fund (XLV) dipped 0.3%, with UNH stock a major holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 2.1% and ARK Genomics ETF (ARKG) 3.45%. TSLA stock is a major holding across Ark Invest’s ETFs. Cathie Wood’s Ark has been loading up on Tesla shares in recent days and weeks.
Five Best Chinese Stocks To Watch Now
Market Rally Analysis
After wavering in the morning, the major indexes ultimately climbed modestly, while small caps jumped.
The S&P 500 came right up to its 200-day moving average, closing just below that key level. The Nasdaq held support at its 50-day line and moved a little higher from that area.
The Dow Jones and Russell 2000, above all their moving averages, are working toward their December highs.
Overall, the market rally has made huge strides over the past five sessions. Investors see the light at the end of the tunnel for Fed rate hikes.
Still, the major indexes face further tests. The S&P 500 needs to decisively clear the 200-day line, where it’s hit resistance multiple times. The December highs are the ultimate test for the indexes. But after running up for several sessions, with the major indexes right around key levels, a pause or pullback wouldn’t be a surprise.
Dow Jones futures are pointing to a pullback at Friday’s open.
Leading stocks are showing better action, but many are now extended, at least from early entries or moving averages.
Exxon Mobil stock rose 1.7% to 113.22, just below a 114.76 flat-base buy point, according to MarketSmith analysis. But XOM stock is in range from the 50-day line. Celsius stock dipped 0.2% to 106.40, but found support at the 21-day line. CELH stock is still actionable from Wednesday’s jump, rebounding from the 50-day line and breaking a short trendline.
In a positive sign for the broader market rally, the chip sector has regained momentum, with the SMF ETF moving decisively above its 200-day line this week. Taiwan Semiconductor (TSM), the largest holding in SMH, gapped above its 200-day line on earnings. That’s despite revenue falling short and TSMC also guiding low on Q1. But not many chip names, even those that are clear market leaders, are actionable right now.
Tesla Vs. BYD: EV Giants Vie For Crown, But Which Is The Better Buy?
What To Do Now
The stock market rally has had a strong stretch, moving above some key resistance areas and with the CPI inflation report out of the way.
Investors can be adding exposure, gradually, if conditions continue to improve. The major indexes, sectors and leading stocks have had a tendency to stage big pullbacks just as they seem to be gaining steam. And the market rally is gaining momentum.
Earnings season could upend the market rally, or slam specific sectors or stocks.
Investors who largely stayed on the sidelines in recent days may feel like big opportunities have passed them by. It’s true that some stocks may be out of reach right now. But don’t chase extended names. Wait to see if they pause or pull back or set up new bases. Meanwhile, other stocks will come to the fore.
If this market rally has real legs, that there will plenty of chances. If it quickly stalls out again, then you’ll be glad you’re not heavily invested.
But it’s crucial to have your watchlists up to date. Cast a wide net to find stocks that are setting up across different sectors. Then focus on stocks that are “ready” or nearly so.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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Dow Jones Reverses On Hot Inflation Data; JPMorgan, UnitedHealth Rally On Earnings
The Dow Jones Industrial Average reversed lower Friday amid weaker-than-expected U.S. retail sales data. Dow Jones stocks JPMorgan (JPM) and UnitedHealth (UNH) rallied following better-than-expected earnings results.
X
September retail sales were flat, missing Econoday estimates for a 0.2% rise. Meanwhile, consumer sentiment topped estimates with a 59.8 reading in September, above estimates for a 58.8 reading. Lastly, University of Michigan One-Year Inflation Expectations came in hotter than expected, at 5.1% in October vs. the 4.7% rate in September. The UoM Inflation Expectations measures the percentage that consumers expect the price of goods and services to change during the next 12 months.
Stock Market Today: Earnings Season Heats Up
Friday started with a busy mix of earnings news. Banks JPMorgan, Morgan Stanley (MS), Citigroup (C) and Wells Fargo (WFC) reported. So did healthcare giant UnitedHealth.
Citigroup shares fell less than 1% shortly after the company’s report. JPM stock rallied 2% after better-than-expected third-quarter results, while Morgan Stanley shares declined 3% on weak earnings and sales. UNH shares rose 2% on strong results, along with a positive outlook. And Wells Fargo stock jumped 3% despite missing earnings estimates.
Delta Air Lines (DAL) rallied more than 2% on an analyst upgrade, following its third-quarter report on Wednesday. Grocery chains Kroger (KR) and Albertsons (ACI) traded sharply lower, after the companies confirmed Kroger would buy Albertsons, in a bid to better compete with Walmart (WMT) and Amazon (AMZN).
Electric-vehicle leader Tesla (TSLA) reversed 1.6% lower Friday. Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) were modestly higher after today’s stock market open.
Cardinal Health (CAH), ConocoPhillips (COP), Denbury (DEN) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stocks Chevron (CVX) and Merck (MRK) — are among the top stocks to watch. Keep in mind that the ongoing stock market correction is a time for investors to sit on the sidelines and build watchlists of top growth stocks.
Cardinal Health and Vertex are IBD Leaderboard stocks. Chevron and Conoco were featured in this week’s Stock Near A Buy Zone column, along with two other top stock ideas. Vertex was IBD’s Stock Of The Day on Friday. Merck was Tuesday’s IBD 50 Stocks To Watch pick.
Dow Jones Today: Treasury Yields, Oil Prices
After Friday’s opening bell, the Dow Jones Industrial Average reversed 0.1% lower, while the S&P 500 moved down 0.3%. The tech-heavy Nasdaq composite turned down 0.8% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was down 0.2%, and the SPDR S&P 500 ETF (SPY) rose 0.1%.
The 10-year Treasury yield declined Friday, falling to 3.88% following Thursday’s brief jump above 4%. That jump came after inflation data showed prices in September rose 0.4%, hotter than the expected 0.2% increase.
Meanwhile, U.S. oil prices lost about 2% Friday, sending West Texas Intermediate futures below $88 a barrel. Oil prices are threatening to give back a large part of Thursday’s rebound.
Stock Market Rally Attempt
On Thursday, the Dow Jones Industrial Average sold off as much as 1.6% before closing with a 2.8% advance. The tech-heavy Nasdaq composite reversed an early dive of more than 3% into a 2.2% climb. The Nasdaq staged its best comeback since Feb. 24, according to Dow Jones Market Data.
Thursday’s The Big Picture commented, “With the market in correction mode, investors should be tracking companies that handily beat earnings results and have strong upside reactions. They could be among the stock market’s leaders if the market is able to extend its rebound.”
Thursday was Day 1 of the stock market’s latest rally attempt, so investors now await a follow-through day, which can occur as early as Tuesday of next week. A follow-through day confirms the beginning of a new uptrend. Be mindful that not all follow-throughs work, so it’s important to raise exposure slowly and methodically, as the uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron, Merck
Energy giant Chevron found support at its 50-day line Thursday, with a near-5% advance. Shares are consolidating below a 182.50 buy point ahead of the company’s Oct. 28 earnings release. Chevron shares fell 1.2% early Friday, tracking lower with oil prices.
CVX stock boasts a strong 98 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Dow Jones member and IBD 50 stock Merck is closing in on a double bottom’s 93.12 buy point, according to IBD MarketSmith pattern recognition. The relative strength line hit a new high this week, as the stock decisively regained its key 50-day moving average. Third-quarter earnings results are due Oct. 27 before the opening bell.
Merck shares fell 0.1% Friday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: Cardinal, Conoco, Denbury, Vertex
IBD Leaderboard stock and medical leader Cardinal Health is shaping a flat base that has a 72.38 buy point, according to IBD MarketSmith chart analysis. Shares of the drug distribution heavyweight are again receiving support around their key 10-week moving average, per Leaderboard commentary. Earnings are due Nov. 4. Shares traded up 0.7% Friday.
Energy giant ConocoPhillips regained a 118.49 buy point in a cup with handle amid Thursday’s 5.5% advance. The stock’s RS line hit a new high Thursday, illustrating strong stock market outperformance. Earnings are due Nov. 3. Shares moved down 1.1% Friday.
Denbury tested its cup base’s 94.05 buy point Thursday, briefly giving up that level before closing above it. Shares broke out earlier this week following reports that Exxon Mobil (XOM) is considering a takeover. Shares are in the 5% chase zone that runs up to 98.75, though the market remains in a correction. The company will report earnings are Nov. 3. Shares dipped 0.75% Friday.
Biotech leader Vertex Pharmaceuticals continues to build a flat base with a 306.05 buy point and an early entry at 296.90. Its RS line made a new high this week, confirming the biotech leader as a key stock to watch. VRTX stock found support at its 50-day line Thursday. Earnings are due out Oct. 27. Shares traded up 0.8% Friday.
Join IBD experts as they analyze leading stocks in the current stock market rally attempt on IBD Live
Tesla Stock
Tesla stock rose 2.1% Thursday, reversing from big morning losses. Shares are still at their lowest level since early July and about 47% off their 52-week high. Tesla stock fell 1.6% Friday morning.
The EV giant’s third-quarter results are Oct. 19. Tesla is expected to earn an adjusted $1.03 per share on sales of $22.4 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 3.4% Thursday, rebounding from new recent lows. Still, shares are around 22% off their 52-week high and below their 50- and 200-day lines. Apple stock moved up 0.3% Friday.
Microsoft rose 3.8% Thursday, rebounding from this week’s 52-week low price. The software giant is about 33% off its 52-week high. Microsoft shares gained 1% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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Judge Rejects Antitrust Challenge to UnitedHealth Acquisition
U.S. District Judge Carl Nichols ruled for the companies in an opinion that he kept under seal for now because he said it “may contain competitively sensitive information.” The judge said he would release a redacted public version of the ruling in the coming days. In a one-page public order, he denied the Justice Department’s request to block the companies from completing the deal.
The court ruling represents an early blow to stepped-up antitrust enforcement by the Biden administration, which sued in February to block the deal. The Justice Department’s top antitrust official,
Jonathan Kanter,
said the department disagreed with the decision and was considering its next steps.
“Protecting competition and access to affordable healthcare is of the utmost importance to the antitrust division and the Department of Justice,” Mr. Kanter said.
The decision is a triumph for UnitedHealth, which owns the largest U.S. health insurer and a healthcare operation that comprises thousands of doctors as well as clinics, surgery centers and other assets, along with a powerful conglomeration of health data.
In a statement, a UnitedHealth spokesman said, “We are pleased with the decision and look forward to combining with Change Healthcare as quickly as possible so that together we can continue our work to make the health system work better for everyone.”
Change provides services related to payment processes for healthcare systems, analytics for financing and billing and tools that help hospitals make decisions about patient care.
UnitedHealth had agreed to divest business assets related to claims-processing to address competition concerns, an offer the Justice Department had dismissed as insufficient.
Judge Nichols in his order required UnitedHealth to make that divestiture.
UnitedHealth’s deal for Change, announced in January 2021, will bring the health-technology company under the company’s Optum health-services arm. UnitedHealth had argued that its combination with Change could help improve care by getting better information to doctors, and reduce waste. It agreed to pay nearly $8 billion for Change and assume about $5 billion in debt.
The Justice Department had argued that the deal would give UnitedHealth a virtual monopoly on an important tool that health insurers use to determine when a claim should be paid. And it said the company shouldn’t be allowed to own Change Healthcare’s data clearinghouse, which rival insurers use to compete with UnitedHealth.
The judge, an appointee of former President
Donald Trump,
signaled his skepticism of the lawsuit in a hearing earlier this month. A trial took place in August.
The lawsuit was part of an early batch of antitrust cases brought by the Justice Department under President Biden, a Democrat, that were designed to take a harder line on corporate deal activity. Among other cases, the department is waiting on a ruling in its challenge to a major publishing industry deal, Penguin Random House’s planned acquisition of Simon & Schuster. And it is preparing to go to trial next week in its lawsuit challenging a partnership between
American Airlines Group Inc.
and
JetBlue Airways Corp.
The current crop of antitrust officials, backed by calls from Democrats for a more aggressive approach, have sought to set new court precedents that would steer the law in a broader direction, after years of rulings in which the judiciary has tended to read the antitrust laws more narrowly than a generation ago. Monday’s decision served as a reminder that the Justice Department’s goals are dependent on proving their cases in front of a judge.
The Federal Trade Commission, which shares antitrust authority with the department, also is facing hurdles. It recently lost a ruling from its own in-house administrative law judge, in a case where it was challenging
Illumina Inc.’s
acquisition of cancer-testing developer Grail Inc.
Monday’s decision comes as UnitedHealth and its rivals have continued to move more deeply into vertical integration of health assets, spanning insurance and healthcare provider businesses, as well as pulling together ever-larger troves of health data.
Even after the Justice Department filed suit to block the Change deal, UnitedHealth moved ahead with other acquisitions, including a $5.4 billion takeover of home-health company
LHC Group Inc.
announced last March.
Earlier this month,
CVS Health Corp.
—the parent of health insurer Aetna, a pharmacy-benefit operation and its eponymous drugstores—announced an $8 billion deal to take over home-healthcare company Signify Health Inc. CVS has said it wants to get deeper into the business of primary care.
Write to Anna Wilde Mathews at anna.mathews@wsj.com and Brent Kendall at brent.kendall@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Justice Dept. Sues to Block $13 Billion Deal by UnitedHealth Group
WASHINGTON — The Justice Department on Thursday sued to block a $13 billion acquisition of a health technology company by a subsidiary of UnitedHealth Group, in the latest move by the Biden administration to clamp down on corporate consolidation.
The agency argued that a deal by UnitedHealth to buy the health tech firm Change Healthcare would give UnitedHealth sensitive data that it could wield against its competitors in the insurance business. The suit was filed in the U.S. District Court for the District of Columbia.
A spokeswoman for Optum, the UnitedHealth subsidiary, said in a statement that the Justice Department’s “deeply flawed position is based on highly speculative theories that do not reflect the realities of the health care system,” and added that the company would “defend our case vigorously.” Change Healthcare declined to comment.
The deal is the latest transaction to run into opposition from the Biden administration, which has made countering corporate consolidation a central part of its economic agenda. President Biden signed an executive order last year to spur competition in different industries. He also appointed Lina Khan, a prominent critic of the tech giants, to lead the Federal Trade Commission, and Jonathan Kanter, a lawyer who has represented large companies, as chief of antitrust efforts at the Justice Department.
Since then, the F.T.C. has blocked Lockheed Martin from buying a maker of missile propulsion systems and the chip giant Nvidia from purchasing the design firm Arm. Even before Mr. Kanter was confirmed, the Justice Department sued to block the merger of two major insurance brokers; the purchase of Simon & Schuster by the publisher Penguin Random House; and a deal that would have married some of JetBlue’s operations with American Airlines’s.
The lawsuit on Thursday challenges a deal made by Optum, which said last year that it would buy Change Healthcare, a company that offers technology services to insurers. UnitedHealth is one of the largest health corporations in the country, with $287.6 billion in revenue in 2021. In addition to its health care information technology business, its Optum unit owns physician practices, a large chain of surgery centers and one of the nation’s largest pharmacy benefit managers.
At the center of the Justice Department’s lawsuit is the data that Change Healthcare gathers when it helps process insurance claims. The Justice Department argued that the deal would enable UnitedHealth to see the rules that its competitors use to process claims and undercut them. UnitedHealth could also crunch data about patients at other insurers to gain a competitive advantage, the agency said.
The lawsuit also argued that UnitedHealth could withhold Change Healthcare’s products — which are used by other insurers — from its rivals or save some of its new innovations for itself. The Justice Department added that the deal would give UnitedHealth a monopoly over a type of service that is used to screen insurance claims for errors and speed up processing.
The companies have said that the acquisition will improve efficiency in the industry. They also explored selling the part of Change Healthcare that the Justice Department said would give UnitedHealth a new monopoly.
Lawmakers and regulators have increasingly worried that big businesses could use troves of data to hurt their rivals. A congressional committee has investigated whether Amazon uses data from outside merchants who use its platform to develop competing products, for example. Critics of Facebook have also argued that the company having years of user data makes it difficult for an upstart service to challenge its dominance.
Since Mr. Kanter joined the antitrust division at the Justice Department, critics have said that he should not oversee cases against companies whose rivals he represented while in private practice. According to a financial disclosure form he filed last year, he once represented Cigna, a major insurer that competes with UnitedHealth, and the remote health care company Teladoc.
Mr. Kanter has not participated in the lawsuit against UnitedHealth, one of the people with knowledge of the Justice Department’s case said.
Reed Abelson contributed reporting.
Dow Jones Today, Futures Rise As Jobless Claims Hit Pandemic Low; TSM Earnings Lift Chip Stocks; UnitedHealth, Walgreens Rally
Stock futures shifted sharply higher Thursday, boosted by earnings reports and by a notable improvement in weekly jobless claims. Taiwan Semiconductor (TSM) and Bank of America (BAC) were early leaders on earnings news. On the Dow Jones today, UnitedHealth Group (UNH) led after reporting positive third-quarter results.
X
Dow Jones futures rumbled 0.9% higher, while S&P 500 futures also swung 0.9% above fair value. Nasdaq 100 futures racked up a 1.1% gain on today’s stock market, enough to push the index into positive territory for the week.
Chip equipment makers led the Nasdaq 100, boosted by strong third-quarter results from Taiwan Semiconductor. ASML Holdings (ASML) ran at the top of the list with a 3.1% gain. Applied Materials (AMAT) and KLA (KLAC) gained more than 2%, Lam Research (LRCX) gained 1.9%. The VanEck Semiconductor ETF (SMH) climbed 1.7% in premarket trade.
Taiwan Semi jumped 3.9% following its third-quarter earnings report in which it raised guidance for the current quarter. The stock is looking to snap a five-week decline.
Vaccine maker Moderna (MRNA) ran strong, up 2.2%, ahead of a vote among advisors to the Food And Drug Administration regarding approval of a third shot of the company’s Covid-19 vaccine. Moderna shares are struggling to climb off the bottom of a nine-week correction.
Also receiving an FDA boost, biotech Regeneron Pharmaceuticals (REGN) jumped 2.7%, after the agency reportedly accepted the company’s application for its monoclonal antibody treatment for non-hospitalized Covid-19 patients. Regeneron shares are testing 200-day support after a steep, four-week breakdown.
Network storage leader NetApp (NTAP) jumped more than 3% to lead the S&P 500. Shares are technically in a buy range on a rebound from their 10-week moving average.
United Parcel Service (UPS) powered up 2.7%. Stifel upgraded the stock to buy, from hold, and raised its price target to 224, from 210.
Dow Jones Today: Walgreens, UnitedHealth Earnings
UnitedHealth Group and Walgreens Boots Alliance (WBA) topped the Dow Jones today, running strong on quarterly earnings news.
UnitedHealth added 2.6%, positioning the stock for a possible test of resistance at its 50-day moving average. The managed-care giant cleared analysts’ third-quarter revenue and earnings targets by narrow margins, and boosted its full-year earnings guidance in line with Wall Street expectations.
UnitedHealth stock is rebounding from a test of support at its 200-day line. It faces potential resistance at its 50-day moving average as it attempts to move up the right side of what IBD MarketSmith analysis plots as a flat base.
Walgreens rallied 2.2%, after reporting that fiscal fourth-quarter earnings and revenue cleared estimates. U.S. sales rose 6.6% to $28.8 billion. International sales soared 62%, to $5.5 billion.
Walgreens stock is locked in a six-month consolidation, trading below both its 10-week and 40-week moving averages.
IBD 50: Callon Pete, Diamondback Lead
On the IBD 50 list, Callon Petroleum (CPE) and Diamondback Energy (FANG) were early leaders as oil prices leaned toward a sixth-straight daily advance.
Callon ended Wednesday down more than 7% since the start of the week, pulling back after briefly topping a 60.61 buy point. The pullback went well beyond the 8% loss limit that triggers the automatic sell rule, ejecting investors and sending a caution flag about buying while the market outlook reads “in correction.”
Diamondback has been less didactic, breaking out past a 102.63 buy point on Oct. 4. Shares are narrowly extended above the cup base entry, after finding support at its short-term 10-day moving average on Wednesday.
Econ News: Jobless Claims Fall, Oil Rises
The Labor Department reported first-time applications for unemployment assistance decreased to 293,000 in the week ended Oct. 9. That marked a 10% drop vs. the prior week, and below economist projections for 320,000 claims.
The second-straight decline in weekly applications, it was also the lowest tally since March 2020, just as the pandemic got underway.
The Energy Information Administration reports weekly natural gas inventories at 10:30 a.m. ET, and weekly oil supply estimates at 11 a.m. ET.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Oil prices swung higher, with West Texas Intermediate futures up 1.2%, trading above $81 a barrel and pushing to add an eighth week to their advance. Copper rose 1.5%, after posting a 4.6% surge on Wednesday. Bond yields were largely flat after two days of strong declines, with the 10-year Treasury yield unchanged at 1.54%.
Meanwhile, bitcoin surged nearly 5% to trade above $57,500, according to CoinDesk. The cryptocurrency moved as high as $58,518 and as low as $54,554 over the prior 24 hours.
Earnings: Bank Of America, Morgan Stanley Climb
Financials were in motion on earnings news, after a tough day of trading on Wednesday.
Bank of America popped 2.7%, trading high on the S&P 500, after reporting a better-than-expected 67% surge in earnings. Revenue also topped analyst estimates, and asset quality improvements spurred a reserve release of $1.1 billion. Bank of America stock is pulled back to test support at its 21-day exponential moving average, after rekindling a failed August breakout.
Morgan Stanley (MS) rallied 2.5% as a 28% third-quarter earnings gain swept past analyst forecasts. Revenue rose 20%, also above forecasts, as earnings received a boost from a $1.7 billion release of reserves banked against possible defaults.
A late-September spike to new highs interrupted Morgan Stanley’s basing pattern. Shares are currently consolidating below their 10-week moving average.
Nasdaq, S&P 500, Dow Jones Today
The Dow Jones today heads for the starting bell with a 1.1% loss for the week. The S&P 500 is down 0.6%. For the month, the Dow is up 1.6%. The S&P 500 has a 1.3% gain.
Meanwhile, the Nasdaq composite is down less than 0.1%. If the index holds near current levels, it would mark a second weekly close within 0.1% of the prior week. On a weekly chart, that shows as a three-weeks-tight pattern, a bullish marker usually found in stocks.
The Nasdaq and the S&P 500 both snapped three-day retreats on Wednesday. Both now have found five days of support at their short-term 10-day moving averages, but remained well below the longer-term 50-day moving averages.
The Dow remains on the fence, with a flat finish Wednesday that essentially added a fourth down day to its chart. The Dow, however, erased earlier losses. The stock market market outlook is still “in correction,” but the rally attempt, constructed upon the Oct. 4 lows for the Nasdaq and S&P 500, remains in effect.
For more detailed analysis of the current stock market and its status, study the Big Picture.
A follow-through day — a big gain by the Nasdaq or S&P 500 in rising volume — is needed to launch a new uptrend and kick the market outlook over to “confirmed uptrend.” Until that occurs, the best place for investors to be is in cash, building watchlists and waiting for the shift in market status.
Alan R. Elliott is on Twitter @IBD_Aelliott
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UNH Stock: UnitedHealth Earnings Top, Dow Jones Giant Nears Buy Point
UnitedHealth Group (UNH) beat second-quarter views and raised guidance as the spreading Delta variant of the coronavirus poses new risks as hospitalizations rise. UNH stock rose slightly, nearing a buy point.
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UnitedHealth Earnings
Estimates: Wall Street expects UnitedHealth earnings to decline 38% to $4.43 per share, reflecting tough comparisons in part. Revenue is seen climbing 12% to $69.47 billion, according to FactSet. The company saw a profit windfall in Q2 2020, when earnings nearly doubled as the coronavirus lockdowns led Americans to forgo nonemergency medical care.
Analyst forecast that UnitedHealth’s medical cost ratio, a key metric, is expected to reach 83%. The ratio, also known as medical loss ratio, measures the percentage of premiums that health insurers pay out in medical claims. It’s closely watched as the engine of the managed care industry.
In Q1, United Health’s medical care ratio reached 80.9%, up from 79.1% the prior quarter.
Results: UnitedHealth earnings of $4.70 a share while revenue grew 15% to $71.32 billion. The medical cost ratio was 82.8% vs. 70.2% a year earlier, as Americans avoided seeing the doctor or using their medical benefits during the pandemic.
Outlook: After beating Q2 views by 27 cents, UnitedHealth now sees 2021 EPS of $18.30-$18.60 vs. its April guidance of $18.10-$18.60. Wall Street had forecast UnitedHealth earnings per share of $18.57, FactSet says.
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UNH Stock
Shares of the Dow Jones health giant rose 1.3% to 420.05 in Thursday stock market trading. UNH stock is in a flat base with a 426.10 buy point, according to MarketSmith chart analysis.
The relative strength line for UnitedHealth stock is lackluster and below the consolidation peak. A rising RS line shows a stock is outperforming the S&P 500 index.
The coronavirus pandemic initially lifted UnitedHealth earnings as Americans deferred elective procedures. Now the wind could blow the other way given higher Covid-19 treatment and testing costs, while more people are seeing their doctors again.
The Delta variant is especially of concern. Hospitalizations are rising again, though well below January’s peak, as the more contagious coronavirus strain spreads among the unvaccinated.
Meanwhile, UnitedHealth’s planned purchase of Change Healthcare (CHNG) is under antitrust scrutiny.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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Dow Jones Industrial Average Stock News
Morgan Stanley, AIG, AMC, UnitedHealth and others
Check out the companies making headlines before the bell:
Morgan Stanley (MS) – Morgan Stanley beat estimates by 20 cents with second-quarter earnings of $1.85 per share, while revenue topped forecasts as well, helped by an acceleration in investment banking activity. Despite the beat, Morgan Stanley shares fell 1.6% in the premarket.
American International Group (AIG) – AIG shares surged 5% in premarket trading after it announced a deal to sell a 9.9% stake in its life insurance and retirement services unit to Blackstone (BX) for $2.2 billion. The deal also calls for Blackstone to manage an initial $50 billion in assets backing AIG’s life insurance policies and annuities, increasing to about $100 billion over the next six years.
AMC Entertainment (AMC) – AMC tumbled another 6.2% in the premarket after the movie theater operator’s stock fell for the fourth straight day and the eighth time in nine sessions Wednesday. The skid was capped by a 15% drop in yesterday’s session, bringing its total loss over that time to about 41%.
UnitedHealth Group (UNH) – The health insurer saw its second-quarter profit fall by more than a third from a year ago, as consumers resumed elective medical care that they had postponed due to the pandemic. However, UnitedHealth did beat estimates on the top and bottom lines, earning an adjusted $4.70 per share compared to a consensus estimate of $4.43.
Bank of NY Mellon (BK) – Bank of NY Mellon beat estimates by 13 cents with quarterly earnings of $1.13 per share and revenue topping estimates as well. Its board also reauthorized the repurchase of up to $6 billion in common stock.
Truist Financial (TFC) – The bank that resulted from the 2019 merger of SunTrust and BB&T reported an adjusted quarterly profit of $1.55 per share, beating the $1.19 consensus estimate, while revenue also came in above Wall Street projections. Results were helped by strong fee and wealth management income, among other factors.
US Bancorp (USB) – US Bancorp earned $1.28 per share for the second quarter, 14 cents above estimates, with revenue beating estimates as well. Its results got a boost from an improving economy which helped boost credit and debit card revenue and allowed it to lower its credit loss provision.
Norton LifeLock (NLOK) – Norton LifeLock is in talks to buy fellow cybersecurity firm Avast, in a deal that would expand Norton’s presence in consumer software. Avast said the two sides were in advanced discussions about a possible cash-and-stock deal. Norton LifeLock fell 2.6% in the premarket.
Johnson & Johnson (JNJ) – Johnson & Johnson is recalling some batches of its Neutrogena and Aveeno spray sunscreen products after benzene was found in some samples. Johnson & Johnson said benzene – which can potentially cause cancer – is not used in the manufacture of the products and it is investigating how it wound up in some products. Shares fell 1% in the premarket.
General Motors (GM) – NHSTA urged owners of about 50,000 Chevy Bolts to park outside after charging the electric vehicles, due to fire risks. GM, which makes the Bolt, had issued a similar warning earlier in the day about vehicles from the 2017 to 2019 model years.
Netflix (NFLX) – Netflix hired former Facebook executive Mike Verdu to lead its video games unit, as it steps up efforts to grow beyond its flagship video streaming business. The stock rose 1.8% in premarket action.
Beyond Meat (BYND) – Beyond Meat opened an online store in China on e-commerce platform JD.com (JD), as it tries to boost sales of its plant-based meat alternatives in that country.