The Nasdaq Composite Index rose 0.4%, led by technology stocks, as investors were hopeful of a Covid-19 stimulus package under US President Joe Biden to jumpstart the economic recovery.
US Labor Department data showed that initial claims for state unemployment declined 26,000 to a seasonally adjusted 900,000 in the week ended Jan. 16. Economists polled by Reuters had expected 910,000 applications in the latest week.
The S&P 500 Index was almost flat and the Dow Jones Industrial Average slipped 0.1%.
In earnings news, shares of United Airlines plunged 7% after the air carrier posted a $7.1 billion loss in FY20 versus a profit of $3 billion a year ago as the pandemic-led lockdown restrictions brought air travel to an almost complete halt. The US airline reported a net loss of $1.9 billion in 4Q compared to a profit of $641 million in the year-ago period. Its 4Q loss of $7 per share was larger than analysts’ estimates of a loss of $6.60 per share. Revenue in 4Q plunged 69% year-on-year to $3.4 billion. In addition, United announced plan to cut operational costs by $2 billion and generate future cost savings.
In more aviation news, Boeing has been awarded a $2.1 billion contract with the US Air Force to build an additional 15 KC-46 refueling tankers. Earlier this month, the aerospace giant won a $1.7 billion US Air Force contract for 12 KC-46A tanker aircraft. Boeing delivered its first KC-46A to the US Air Force in January 2019, and since then, has delivered 42 tankers to four different bases. Boeing is now on contract for 79 of the KC-46A tankers. Shares declined 2%.
Meanwhile, Kinder Morgan posted better-than-expected fourth quarter results. Adjusted EPS came in at $0.27 vs. the $0.24 expected by analysts. Revenue declined to $3.12 billion compared to $3.35 billion a year ago, but also beat analysts’ estimates of $3.05 billion. Natural gas transport volumes dropped 2% compared to a year ago but the natural gas pipeline operator expects earnings to improve this year. The pipeline operator’s board raised its dividend for the fourth quarter by 5% to $0.2625 per share and expects to increase its dividend by another 3% for 2021.
Shares of Inovio Pharmaceuticals slumped almost 8% after the biotech company priced its $150.5 million share offering. Inovio is proposing to sell 17,700,000 shares of its common stock at a price of $8.50 per piece, reflecting a 13% discount to the closing price on Jan. 20. Furthermore, Inovio has granted the underwriters of the offering a 30-day option to buy up to an additional 2,655,000 shares of common stock. The share sale is expected to close by January 25, pending customary closing conditions.
In automotive news, Ford Motor jumped more than 7% after Deutsche Bank put the stock on its short-term Catalyst Buy list, citing a “robust” product cycle, attractive pricing environment for US trucks, and restructuring savings, which taken together could lead to better-than-expected 2021 guidance. Deutsche Bank analyst Emmanuel Rosner believes that the catalysts could “prompt investors to anticipate a more aggressive turnaround trajectory” and benefit the shares in the short-term.
Last, but not least, Tesla’s vehicle registrations in California surged almost 63% in the fourth quarter compared to the same period a year earlier, Reuters reported citing Cross-Sell data. The data showed that quarterly registrations were largely driven by demand for Tesla’s Model Y. Registration numbers in California, a bellwether for the electric vehicle (EV) maker, rebounded from a third-quarter low of about 16,200 vehicles to around 22,117 vehicles in the three months ended December. Shares retreated 0.6%.