Plus, Boeing is laying off another 7,000 workers, GE delivered a surprise earnings beat, and CoreLogic shares jump on reports of multiple takeover offers.
Stocks were lower to start Wednesday with the Dow dropping 777 points, or 2.8%. The S&P 500 slide 2.9%, while the Nasdaq traded 3.1% lower.
Tuesday marked the third consecutive day the U.S. set a new record high for average COVID-19 cases, rising to a seven-day average of 71,832. Cases are up by at least 5% in 45 states. “As the nation did after Memorial Day, we are at another critical point in the pandemic response,” said Ads. Brett Giroir, assistant secretary of health who leads the government’s testing effort. “Cases are going up in more states across the country. Hospitalizations are up, although we’re still tens of thousands of hospitalizations below where we were in July, but that is rising. And we are starting to see the increase in deaths.” The continued surge in cases and hospitalizations is starting to overwhelm hospitals in some areas of the country. In Utah, the Utah Hospital Association has asked the governor to allow them to ration care as hospitals run out of space and the staff to treat patients, while in Texas, El Paso County Judge Ricardo Samaniego issued a curfew Sunday to protect “overwhelmed and exhausted” hospitals and health care workers.
On the vaccine front, the World Health Organization said that while it welcomes updates from developers scrambling to deliver a safe and effective COVID-19 vaccine, it is still “going to take time” before one is widely available and safe for everyone. “While the information coming from the vaccine developers is encouraging, WHO has not yet seen published data on the efficacy of a vaccine candidate in the elderly,” a WHO spokesperson said today. “Documenting the safety and efficacy of a vaccine that would be made widely available is critical – full data and longer follow-up to gather the evidence is required to make an informed decision. It is going to take time before we have a safe and effective COVID-19 vaccine—in any population group—and even longer before it is available to a large number of people. That is why it is important to continue using public health tools and measures that we know are effective in preventing the infection and breaking the chain of transmission.”
Boeing shares are down nearly 3% this morning after the plane maker said that it swung to a net loss of $466 million in the third quarter from a profit of $1.2 billion in the same quarter a year ago. Boeing reported a third quarter loss of $1.39 per share on revenue of $14.1 billion, and while revenue came in slightly ahead of expectations for $13.9 billion, the figure represents a 29% drop in revenue year-over-year. While Boeing CEO Dave Calhoun said that the company is “getting very close to the finish line” of the worldwide grounding of its 737 Max plane, which hasn’t flown since March 2019 on safety concerns following two deadly crashes. That good news aside, the manufacturer—which is already shedding 16,000 jobs—is adding another 7,000 job cuts, bringing the platemaker’s workforce cut to 19% following an unprecedented collapse in air travel and jetliner sales amid the coronavirus pandemic. “We’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” Calhoun said.
In other earnings news, General Electric shares are up 10% after it posted a surprise adjusted profit. GE reported adjusted earnings per share of $0.06 in its third quarter on revenue of $19.42 billion, compared to estimates for a loss of $0.04 per share on revenue of $18.73 billion. “We are managing through a still-difficult environment with better operational execution across our businesses, and we are on track with our cost and cash actions,” GE CEO Lawrence Culp said in a statement. “While our work continues, GE’s transformation is accelerating, and we expect Industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021.” Also reporting positive results was UPS, which reported average daily volumes in the U.S. rose 13.8% on continued strength in residential demand. UPS reported earnings per share of $2.28, versus analysts’ estimates for earnings per share of $1.91, on revenue of $21.24 billion up from revenue of $18.32 in the same period last year. “Our results were fueled by continued strong outbound demand from Asia and growth from small and medium-sized businesses,” CEO Carol Tomé said in a statement.
And CoreLogic shares are up 13% this morning following reports that the property data and analytics firm has received multiple potential takeover bids that value the company at more than $80 a share. CoreLogics possible suitors include private equity firms, CNBC reported, and the company has already signed a non-disclosure agreement with at least one potential buyer. CoreLogic confirmed that it is “engaging with third parties indicating preliminary interest based on public information in the potential acquisition of the Company at a value at or above $80 per share. No decision has been made to enter into a transaction at this time, and the Company can offer no assurance that it will enter into any transaction in the future or, if entered into, what the terms of any such transaction would be.”
Stocks We’re Watching
Ultragenyx Pharmaceuticals (NASDAQ: RARE): Ultragenyx shares rose 9% yesterday after the biotech reported fiscal third quarter results, posting $81.5 million in total revenue, with $37.3 million in totally revenue from its Crysvita drug. “Crysvita continues to deliver meaningful revenue growth and with the launches of Dojolvi and Crysvita for TIO, we are now generating sales from three products across four indications,” said Emil D. Kakkis, M.D., Ph.D., Chief Executive Officer and President of Ultragenyx. “The Angelman program with GeneTx recently read out very promising, early data for this neurological disorder demonstrating the potential to substantially improve clinical symptoms in that disease. The strategic collaboration with Solid Biosciences we recently announced adds an important potential Duchenne therapy to our preclinical pipeline and a sixth program to our strong gene therapy franchise.”