Plus, ADP said private companies added 174,000 jobs in January, Vaxart shares are down on concerns over a lackluster immune response to its COVID-19 vaccine, and Capri Holdings delivered an earnings beat.
Stocks were lower to start Wednesday with the Dow falling 155 points, or 0.5%. The S&P 500 slid 0.2%, while the Nasdaq fell 0.1%.
Jeff Bezos announced he’s stepping down. Amazon’s founder and CEO will leave his post in the third quarter and transition to executive chairman of Amazon’s board, and will be turning the helm over to AWS top cloud executive, Andy Jassy. “I’m excited to announce that this Q3 I’ll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO,” Bezos said in a letter to employees. “In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.” Under Jassy, AWS reported 28% revenue growth for the fourth quarter, with around 52% of Amazon’s operating income attributed to the business as of October 2020.
Congress took its first big steps toward passing President Joe Biden’s $1.9 trillion coronavirus relief package yesterday. The Senate voted in a 50-49 party line vote to advance a budget resolution, which sets the reconciliation process in motion, with the House pushing a budget measure forward in a 216-210 vote. Once passed in both chambers, Democrats will be able to approve rescue legislation without any Republican support. Republicans have been reluctant to approve a large relief package, preferring instead to wait to see the effects of the deal passed in December, while Democrats have argued more cash is needed to inject money into the health and economic response as soon as possible. “Time is a luxury our country does not have,” said Senate Majority Leader Chuck Schumer, adding that Democrats “want this important work to be bipartisan” and will welcome input from Republicans.
ADP reported private companies added 174,000 jobs in January, one month after reporting the first loss since April. The gain beat the 50,000 jobs expected by economists. Services-related businesses accounted for 156,000 of the total gain, the battered leisure and hospitality industry added 35,000 for the month, construction and manufacturing added 19,000, and trade, transportation and utilities rose by 16,000. “The labor market continues its slow recovery amid COVID-19 headwinds,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. The Labor Department’s report on nonfarm payrolls will come out on Friday, with economists estimating a reading of an added 50,000 jobs.
Vaxart shares are down nearly 50% this morning on concerns that a lackluster antibody response could hinder the effectiveness of its experimental oral COVID-19 vaccine. Vaxart said 75% of volunteers in a small trial of 35 adults generated a type of T-cell responsible for destroying virus-infected cells, however, neutralizing antibodies were not detected in volunteers after a single dose. The company is now assessing antibody responses from second doses after antibodies were detected in nasal swab samples for volunteers who received two doses of the vaccine. “The immune response is multifaceted,” said Isaac Bogoch, an infectious disease specialist and professor at the University of Toronto. “While it’s great to see that there appears to be a decent T-cell response, the lack of antibodies detected is problematic and may reduce the effectiveness of this as a vaccine.”
And Capri Holdings shares are up nearly 2% at the time of writing after the Michael Kors and Versace owner beat holiday-quarter profit estimates as it boosted its margins by selling more products at full price while also cutting manufacturing costs. In its fiscal third quarter, Capri posted earnings per share of $1.65, versus analysts expectations for earnings of $1.01 per share. However, total revenue fell 17% to $1.30 billion as store closures in major European markets and no holiday products line from its Jimmy Choo brand hit sales. Capri said it expects to return to pre-pandemic revenue and earnings levels by fiscal 2023. In other earnings news, Sony shares are up nearly 11% after the company reported operating profit of 359.2 billion Japanese yen ($3.4 billion) last quarter, up 20% from the same period a year ago. Sony also hiked its full-year profit and sales forecasts, and said sales of its new PlayStation 5 console reached 4.5 million units in the holiday quarter.
Stocks We’re Watching
Mohawk Group Holdings Inc (NASDAQ: MWK): Mohawk shares are up more than 8% today after it announced it has acquired the assets of e-commerce company Healing Solutions, LLC, a leading online seller of essential oils for $15.3 million in cash and 1.4 million shares of Mohawk’s common stock. “Our mission to build the leading e-commerce consumer brands platform has taken another meaningful step forward today. We are thrilled to enter the essential oils category which further diversifies our e-commerce portfolio of brands,” Yaniv Sarig, Co-Founder and CEO of Mohawk, said in a statement. “Consumable products with recurring purchases and subscription revenue opportunities that complement our hard goods brands have been on our radar. Our strategy to create a supply chain and technology platform designed to operate e-commerce brands across a wide spectrum of categories at scale continues to bear fruit. We are still at the early stages of executing on our ambitious goals and are looking forward to developing new products for the brands we are acquiring as well as extending their reach internationally.”