Market Overview

Mid-Morning Market Update: Markets Mixed; Cisco Issues Weak Outlook

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Following the market opening Thursday, the Dow traded down 0.15% to 27933.86 while the NASDAQ rose 0.54% to 11,071.49. The S&P also rose, gaining 0.05% to 3,382.12.

The U.S. has the highest number of coronavirus cases and deaths in the world, reporting a total of 5,201,230 cases with around 166,110 deaths. Brazil confirmed a total of over 3,164,780 COVID-19 cases with 104,200 deaths, while India reported a total of at least 2,396,630 confirmed cases and 47,030 deaths. In total, there were at least 20,666,150 cases of COVID-19 worldwide with over 750,370 deaths, according to data compiled by Johns Hopkins University.

Leading and Lagging Sectors

Communication services shares gained 0.6% on Thursday. Meanwhile, top gainers in the sector included China Unicom (Hong Kong) Limited (NYSE: CHU), up 20%, and Entercom Communications Corp. (NYSE: ETM), up 23%.

In trading on Wednesday, health care shares fell by 0.5%.

Top Headline

Cisco Systems, Inc. (NASDAQ: CSCO) reported upbeat results for its fourth quarter, but issued a weak forecast for the current quarter.

Earnings per share came in at $0.80, which beat the estimate of $0.74. The company posted revenue of $12.20 billion, exceeding expectations of $12.08 billion.

Cisco said it expects Q1 adjusted EPS of $0.69-$0.71, versus analysts’ estimates of $0.76. Sales are projected to decline 9% to 11% year over year.

Equities Trading UP

FAT Brands Inc. (NASDAQ: FAT) shares shot up 155% to $9.00 after the company announced it planned to acquire Johnny Rockets for $25 million.

Shares of India Globalization Capital, Inc. (NYSE: IGC) got a boost, shooting 27% to $3.25 on continued upward momentum after the company earlier reported on Tuesday the FDA approved the initiation of the company's cannabinoid trial on Alzheimer's patients.

Aspen Technology, Inc. (NASDAQ: AZPN) shares were also up, gaining 31% to $127.82 after the company reported better-than-expected Q4 results and issued strong FY20 guidance. KeyBanc maintained Aspen Technology with an Overweight rating and raised the price target from $120 to $137.

Equities Trading DOWN

Newgioco Group, Inc. (NASDAQ: NWGI) shares tumbled 25% to $2.01 after the company reported pricing of $10.0 million underwritten public offering.

Shares of Varex Imaging Corporation (NASDAQ: VREX) were down 24% to $12.15 after the company reported a Q3 loss of $0.20 per share. Oppenheimer also downgraded the stock from Outperform to Perform.

Vroom, Inc. (NASDAQ: VRM) was down, falling 19% to $56.32 after the company issued downbeat Q3 EPS and sales guidance.

Commodities

In commodity news, oil traded up 0.1% to $42.67, while gold traded up 0.1% to $1,950.50.

Silver traded up 3.3% Thursday to $26.825, while copper fell 1.8% to $2.8405.

Euro zone

European shares were lower today. The eurozone’s STOXX 600 fell 0.6%, the Spanish Ibex Index fell 0.4%, while Italy’s FTSE MIB Index declined 0.7%. Meanwhile, the German DAX 30 declined 0.6%, French CAC 40 fell 0.5% and UK shares fell 1.3%.

Economics

U.S. initial jobless claims increased 963,000 in the week ended August 8, versus analysts’ estimates of 1.1 million.

U.S. import prices increased 0.7% in July after rising 1.4% in June. Export prices rose 0.8% in July, following a revised 1.2% gain in June.

The Energy Information Administration’s weekly report on natural gas stocks in underground storage is scheduled for release at 10:30 a.m. ET.

The Treasury is set to auction 4-and 8-week bills at 11:30 a.m. ET.

The Treasury will auction 30-year bonds at 1:00 p.m. ET.

Data on money supply for the recent week will be released at 4:30 p.m. ET.

 

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