Mid-Morning Market Update: US Stocks Open Lower After Disappointing Earnings From Meta Platforms

US stocks opened on a weak note this morning after Meta Platforms, Inc. FB reported weaker-than-expected earnings for its fourth quarter and issued a weak forecast.

Following the market opening Thursday, the Dow traded down 0.86% to 35,322.74 while the NASDAQ fell 2.13% to 14,110.62. The S&P also fell, dropping, 1.42% to 4,524.28.

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Leading and Lagging Sectors

Financials shares fell by just 0.2% on Thursday. Meanwhile, top gainers in the sector included Greenhill & Co., Inc. GHL, up 6% and EZCORP, Inc. EZPW up 6%.

In trading on Thursday, communication services shares tumbled by 4.7%.

Top Headline

Merck & Co Inc MRK reported upbeat results for its fourth quarter.

Merck’s quarterly sales reached $13.52 billion, +24% Y/Y, beating the consensus of $13.16 billion. Adjusted EPS of $1.80 also surpassed the analysts' estimate of $1.53 and up from $0.98 posted a year ago.

Merck expects FY22 sales of $56.1 billion - $57.6 billion, compared to the consensus of $56.64 billion. It expects an adjusted EPS of $7.12 and $7.27 (consensus $7.29).

Equities Trading UP

Redwire Corporation RDW shares shot up 20% to $6.36. Redwire said it sees FY21 adjusted sales of $146 million to $151 million and contracted backlog at $133 million to $138 million.

Shares of Bon Natural Life Limited BON got a boost, shooting 20% to $3.97 following FY21 results. Bon Natural Life reported FY21 earnings of $0.68 per share on sales of $25.5 million.

Lightning eMotors, Inc. ZEV shares were also up, gaining 15% to $5.01 after the company announced it has reached an agreement with General Motors to be the first GM Specialty Vehicle Manufacturer to provide fully electric Class 3 through Class 6 commercial vehicles.

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Equities Trading DOWN

Meta Platforms, Inc. FB shares tumbled 24% to $246.66 after reporting weaker-than-expected earnings for its fourth quarter and issuing a weak forecast.

Shares of Resolute Forest Products Inc RFP were down 22% to $11.03 after the company reported downbeat Q4 results.

MDJM Ltd MDJH was down, falling 20% to $1.95 after jumping 35% on Wednesday.

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Commodities

In commodity news, oil traded down 0.8% to $87.52, while gold traded down 1.1% to $1,790.30.

Silver traded down 3.1% Thursday to $21.995 while copper fell 1.2% to $4.4435.

Euro zone

European shares were lower today. The eurozone’s STOXX 600 dropped 0.7%, London’s FTSE 100 slipped 0.1%, while Spain’s IBEX 35 Index fell 0.5%. The German DAX fell 0.5%, French CAC 40 fell 0.4% and Italy’s FTSE MIB Index fell 0.4%.

The IHS Markit Eurozone services PMI slipped to 51.1 in January from a preliminary reading of 51.2. German services PMI rose to 52.2 in January from 48.7 in December, while French services PMI fell to 53.1 in January from 57.

Italy’s services PMI dropped to 48.5 in January from 53 in the previous month, while Spanish services PMI declined to 46.6 in January from 55.8.

Economics

US initial jobless claims dropped by 23,000 to 238,000 in the last week of January.

Nonfarm labor productivity increased an annualized 6.6% in the fourth quarter, while unit labor costs rose 0.3%.

The IHS Markit services PMI was revised higher to 51.2 in January from a preliminary level of 50.9.

US factory orders fell 0.4% for December.

The ISM services PMI dropped to 59.9 in January from 62.3 in December.

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.

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Check out the full economic calendar here

COVID-19 Update

The U.S. has the highest number of coronavirus cases and deaths in the world, reporting a total of 76,882,290 cases with around 917,600 deaths. India confirmed a total of at least 41,803,310 cases and 498,980 deaths, while Brazil reported over 25,813,680 COVID-19 cases with 629,070 deaths. In total, there were at least 385,803,990 cases of COVID-19 worldwide with more than 5,720,560 deaths.