Mid-Morning Market Update: Markets Open Lower; Johnson & Johnson Sales Miss Views

Following the market opening Tuesday, the Dow traded down 1.79% to 33,748.82 while the NASDAQ fell 2.56% to 13,499.97. The S&P also fell, dropping, 2.59% to 13,496.29.

The U.S. has the highest number of coronavirus cases and deaths in the world, reporting a total of 72,958,690 cases with around 891,590 deaths. India confirmed a total of at least 39,799,200 cases and 490,460 deaths, while Brazil reported over 24,134,940 COVID-19 cases with 623,410 deaths. In total, there were at least 355,957,770 cases of COVID-19 worldwide with more than 5,624,630 deaths.

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Leading and Lagging Sectors

Utilities shares fell by just 1% on Tuesday. Meanwhile, top gainers in the sector included Middlesex Water Company MSEX, up 2% and Companhia Paranaense de Energia - COPEL ELP up 1%.

In trading on Tuesday, information technology shares dipped 2.8%.

Top Headline

Johnson & Johnson JNJ reported better-than-expected earnings for its fourth quarter, while sales missed estimates.

Johnson & Johnson reported Q4 adjusted earnings of $2.13 per share, up 14.5% Y/Y over the $1.86 posted a year ago and marginally ahead of the consensus of $2.12. Net sales increased 10.4% Y/Y to $24.8 billion, missing the consensus of $25.29 billion.

Johnson & Johnson expects FY22 total sales of $100.3 billion – $101.8 billion, including $3 billion - $3.5 billion from COVID-19 Vaccine sales. It expects adjusted EPS of $10.40 - $10.60, higher than the consensus of $10.37.

Equities Trading UP

Sierra Oncology, Inc. SRRA shares shot up 48% to $22.90 after the company unveiled topline data for momelotinib in myelofibrosis patients who are symptomatic, anemic, and previously treated with an FDA-approved JAK inhibitor. The company also entered into a term loan agreement with Oxford Finance LLC to support the commercial preparation and potential launch of momelotinib.

Shares of Bally's Corporation BALY got a boost, shooting 22% to $35.62. Standard General, Bally's largest shareholder, submitted proposal to acquire all of the outstanding shares of Bally's common stock not currently owned by the company at a price of $38 per share.

Turquoise Hill Resources Ltd. TRQ shares were also up, gaining 16% to $17.50. Rio Tinto Plc and the Mongolian government said reached an agreement to end a dispute over the Oyu Tolgoi copper-gold mining project. As part of the agreement, Turquoise Hill Resources will waive debt worth $2.4 billion owed to it by Mongolia.

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Equities Trading DOWN

Inhibrx, Inc. INBX shares tumbled 16% to $21.70. The company, earlier during the month, announced initial results from Part 3 (combination dose escalation) of the Phase 1 trial of INBRX-106 combined with Keytruda for solid tumors.

Shares of Aerojet Rocketdyne Holdings, Inc. AJRD were down 15% to $38.29. Aerojet Rocketdyne on Lockheed Transaction said, 'We believe it is highly likely that the FTC will vote to sue to block the transaction and expect they will make a decision before Jan. 27, 2022.'

Vertex Energy, Inc. VTNR was down, falling 11% to $3.77. Clean Harbors and Vertex Energy mutually agreed to terminate planned acquisition of Vertex’s used motor oil collection and re-refining assets.

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Commodities

In commodity news, oil traded up 1.1% to $84.26, while gold traded down 0.2% to $1,837.20.

Silver traded down 0.2% Tuesday to $23.75 while copper fell 0.1% to $4.4065.

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Euro zone

European shares were higher today. The eurozone’s STOXX 600 climbed 1.2%, London’s FTSE 100 gained 1.2%, while Spain’s IBEX 35 Index rose 1.3%. The German DAX gained 1.3%, French CAC 40 climbed 1.5% and Italy’s FTSE MIB Index gained 1.1%.

The Ifo business climate indicator for Germany increased to 95.7 in January from a ten-month low level of 94.8 in December. Spanish producer price inflation rate increased to a new high of 35.9% year-over-year in December from a revised 32.2% a month ago.

Economics

The Federal Open Market Committee will begin its two-day policy meeting today.

The S&P Corelogic Case-Shiller home price index surged 18.3% year-over-year in November.

The FHFA House Price Index rose 1.1% from a month ago for November.

The Conference Board’s Consumer Confidence Index fell to 113.8 in January from previous reading of 115.2

The Treasury is set to auction 52-week bills at 11:30 a.m. ET.

The Treasury will auction 5-year notes at 1:00 p.m. ET.

Data on money supply for December will be released at 1:00 p.m. ET.

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