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

Wall Street’s main stock indexes gained, led by tech stocks, as large corporates from Amazon to Google outpaced quarterly earnings results.  

The tech-heavy Nasdaq Composite Index appreciated 0.4% and the S&P 500 Index rose 0.3%. The Dow Jones Industrial Average was flat.

In earnings news, Google parent Alphabet spiked 7% after reporting better-than-expected Q4 results. Earnings surged 45.3% year-on-year to $22.30 per share and beat analysts’ estimates of $15.90. Total revenue also exceeded forecasts of $53.1 billion, rising 23% to $56.9 billion. Higher advertising revenue and strong demand for its cloud services were the main drivers as advertising sales soared 21.8% to $46.2 billion year-on-year while Google Cloud sales increased 46.6% to $3.8 billion.

Shares of Spotify Technology sank almost 9% as the music streaming company posted a 4Q loss of €0.66 per share versus a loss of €1.14 year-on-year. Analysts were expecting a loss of €0.5 per share. Revenues rose by 17% year-on-year to €2.2 billion, beating the consensus forecast of €2.1 billion. Looking ahead, the company cautioned, “we face increased forecasting uncertainty versus prior years due to the unknown duration of the pandemic and its ongoing effect on user, subscriber, and revenue growth.”

Online dating company Match Group posted 4Q earnings, which fell short of Street estimates, pushing its shares 4.3% lower. Meanwhile, quarterly revenues and the company’s 2021 sales outlook beat analysts’ expectations. Average subscriber numbers increased 12% year-over-year to 10.9 million. Average revenue per user (ARPU) rose 5% year-over-year to $0.62.

Shares of fast-food restaurant chain Chipotle declined 3.8% as the company’s Q4 earnings results disappointed the market. Adjusted earnings per share and revenues both saw year-on-year growth, but the ongoing effects of the coronavirus caused these figures to fall short of analysts’ expectations. Comparable-store sales grew 5.7% but a 177.2% spike in digital sales accounted for almost half of the total sales growth in the quarter. Chipotle expects to open around 200 new restaurants in 2021.

In automotive news, Tesla has backed down to US regulators and will recall 134,941 Tesla Model S sedans and Model X SUVs due to a safety issue with their large center touchscreen. The electric vehicle maker agreed to perform a recall even though it did not conclude that a defect exists, the company said. Specifically, Tesla will recall certain 2012-2018 Tesla Model S and 2016-2018 Model X vehicles with a center display equipped with a NVIDIA Tegra 3 processor. As part of the recall action, which is expected to begin March 30, the EV maker will need to contact owners of cars with a potential safety-related defect and conduct a remedy repair, free of charge. Shares slipped 1.9%

In healthcare-related updates, Cassava Sciences surged another 10% after the stock more than doubled yesterday as the small-cap biotech company released promising results from an interim study of its lead investigational drug, sumifilam, for the treatment of Alzheimer’s disease (AD). The study showed that patient cognition and behavior scores both improved following six months of treatment with simufilam. “We would have been satisfied to show simufilam stabilizes cognition in patients over 6 months. An improvement in cognition and behavior tells us this drug candidate has potential to provide lasting treatment effects for people living with Alzheimer’s disease,” said Cassava CEO Remi Barbier.

Meanwhile, Abbvie gained 1.5% after reporting 4Q diluted EPS of $2.92, which came in ahead of analysts’ estimates of $2.86. Revenues in the fourth quarter were up by 59.2% year-on-year to $13.8 billion versus analysts’ estimates of $13.7 billion. “Based on our broad portfolio of diversified growth assets and the robust momentum of our business, we expect impressive growth again in 2021,” Abbvie CEO Richard A. Gonzalez said.