Thursday’s Market Snapshot: Here’s What You Need To Know Right Now

Wall Street’s main stock indexes fluctuated between subdued gains and losses in low volume trading in what marked the last trading day of 2020.

The tech-heavy Nasdaq Composite Index, which was little changed, was set to close the year with a gain of more than 40%, as the rollout of Covid-19 vaccines and more coronavirus aid relief spurred investor optimism of an economic rebound. The Dow Jones Industrial Average declined 0.1% and the S&P 500 Index was almost flat.

Meanwhile, US Labor Department data showed that initial claims for state unemployment benefits fell to a seasonally adjusted 787,000 for the week ended Dec. 26, from 806,000 a week earlier. Economists polled by Reuters had forecast 833,000 applications in the latest week.

Starting with earnings-related news, Exxon Mobil indicated that it is set to write down as much as $20 billion on its upstream assets despite an improvement in chemical margins driven by higher oil and gas prices during the fourth quarter. The US oil producer said that it anticipates higher prices to help boost upstream operating results by between $200 million to $1 billion. The company is scheduled to report its quarterly results on Feb. 2. Merrill Lynch analyst Doug Leggate reiterated a Buy rating with a Street-high price target of $74, saying that XOM is his major oil pick for 2021. “Three of the four have improved significantly leaving only refining as the primary headwind, but one of the areas we expect greatest improvement in 2H21. While we expect another quarterly cash burn, we believe XOM is past the worst with cash flow balanced after dividends in 2021, and longer-term cash flow growth preserved,” Leggate commented. Shares depreciated less than 1%.

Apple removed more than 46,000 apps, including 39,000 games apps, in its biggest single-day removal from its China store on Thursday, according to Reuters. The deadline for game publishers to submit a government-issued license number allowing users to make in-app purchases was originally set by Apple for June 30. However, the company later extended the deadline to December 31. Only 74 of the top 1,500 paid games survived the mass crackdown, according to research firm Qimai. The move comes as no surprise, according to analysts, as Apple strives to comply with the requirements of China’s content regulators. Shares slipped less than 1%.

In M&A news, Chrysler received a competing buyout offer from the founder’s heir Frank B. Rhodes, Jr. Rhodes sent a proposal to the Fiat Chrysler Automobiles board that he believes is superior to the proposed merger with Dutch-based, STELLANTIS. Fiat Chrysler Automobiles signed a 50-50 merger agreement with PSA Group, legally known as Peugeot, in December 2019, to create a Dutch-based multinational automotive manufacturing corporation called STELLANTIS. Rhodes has filed an objection to the STELLANTIS merger and advised US Senators to block the merger, which would exclude America from future profits and technologies. Fiat Chrysler stock declined less than 1%.

Shares of Comtech Telecommunications Corp. advanced about 1% after extending the term for the UHP Networks acquisition until Feb. 28, 2021. Comtech, which provides products and services for advanced communications solutions, previously expected to close the deal in the second half of fiscal 2020 (ending July 2020). Comtech had initially announced the $40 million merger agreement with UHP on Nov. 21, 2019. 

JD.com updated investors that it is exploring options to spin off its cloud and artificial intelligence (AI) business. The Chinese online retailer said that it is considering to spin off the assets into an entity named Jingdong Digits Technology Holding or JD Digits, in which it seeks to own a “significant minority stake”. JD.com believes that if the transaction happens, “JD Digits will be better positioned to deliver a suite of cutting-edge technology services to its business partners, while the Company will continue to focus on its core competences and synergistic businesses to better serve customers.” Shares fell 1.7%.

Amazon announced the acquisition of podcast startup Wondery in a move to further strengthen its non-musical content on Amazon Music app. The e-commerce giant didn’t disclose the financial terms of the deal. However, Amazon said that listeners will continue to access Wondery podcasts through several mediums following the deal closure. Earlier this month, The Wall Street Journal had reported that the two companies are in exclusive discussion and a deal could probably value Wondery at $300 million. Shares were down less than 1%.