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Stocks Are Little Changed To Close Out A Wild Year

Stocks Are Little Changed To Close Out A Wild Year

Plus, weekly jobless claims unexpectedly fell, Amazon is buying podcasting firm Wondery, and Enphase Energy will be added to the S&P 500 next month.

Stocks were marginally lower to start the last day of the year with the Dow dropping 26 points, or 0.1%. The S&P 500 and Nasdaq both traded just below the flatline.

Weekly jobless claims unexpectedly fell last week. The Labor Department reported initial jobless claims for the week ended December 26 fell to 787,000, while economists had expected claims to rise to 828,000. Continuing claims fell by 103,000 to 5.219 million for the week of December 19, while the number of people receiving benefits across all unemployment programs came in at 19.6 million. “There is no real improvement in the data,” said John Ryding, an economic advisor at Brean Capital. “What we’re seeing is a very difficult time in the economy with the virus pickup that we have seen and the slow rollout of the vaccination. There is good news ahead, but you can’t see it in these numbers.”

As 2020 nears its end, the U.S. has set one-day records for COVID-19 deaths and patients hospitalized. The U.S. reported 3,903 deaths on Wednesday, and more than 125,000 hospitalizations, according to data from The COVID Tracking Project. CDC officials said yesterday that the new strain of the coronavirus now circulating in the U.S. could further stress already overwhelmed hospitals. “Because the variants spread more rapidly, they could lead to more cases and put even more strain on our already heavily burdened health-care systems,” said Dr. Henry Walke, the agency’s COVID incident manager, adding that the available data indicates that the new variant spreads “more easily and quickly than other strains” of the virus but does not appear to cause more severe disease or increased risk of death. 

Amazon is pushing deeper into the podcasting space, announcing yesterday that it is acquiring podcasting company Wondery. Wondery, which produces popular shows including “Dirty John” and “Dr. Death,” will join Amazon Music, the e-commerce giant’s music streaming business. “This is a pivotal moment to expand the Amazon Music offering beyond music as listener habits evolve,” Amazon said in a statement. While financial terms of the deal weren’t disclosed, Wondery had reportedly sought a price of between $300 million to $400 million. 

Exxon shares are down nearly 1% this morning after the oil giant indicated it incurred a fourth straight quarterly loss. Exxon confirmed in a filing that it will take a write down of as much as $20 billion on its upstream assets, a possibility first disclosed at the end of October. But it wasn’t all bad news, higher oil and gas prices seem to have had an impact of up to $1 billion upstream profits compared with the third quarter. Still, a fourth-quarter loss would confirm Exxon’s challenges in covering both dividends and capital expenditures from operational cash flow, and remains reliant on debt. Exxon is expected to report full fourth-quarter earnings on February 2.

And Enphase Energy shares rose as much as 6% this morning following news that it will soon be added to the S&P 500. Enphase will replace Tiffany, which is being acquired by LVMH, and will join the index effective Thursday, January 7. “The big message is that the S&P is starting to evolve to reflect what’s happening,” said Joe Osha, an analyst at JMP Securities. “You have markets recognizing that these companies matter – that decarbonization is a real thing. It’s important. It has to happen.” Enphase Energy shares are up nearly 562% this year.

Stocks We’re Watching

Harvard Bioscience (NASDAQ: HBIO): Harvard Bioscience announced last week the refinancing of its debt with the closing of a new $65 million credit facility. “We are pleased with the successful execution of this refinancing and the substantial improvement in terms from our existing facility,” said Michael Rossi, Chief Financial Officer of Harvard Bioscience.   “Completing this element of our strategic action plan provides additional liquidity and flexibility to support the transformation of Harvard Bioscience into a profitable growth platform. Also, the reduction in interest rate achieved is expected to provide over $2 million of annual cash interest savings in 2021. The successful closing of this new credit facility following the disruptions caused by Covid-19 demonstrates the confidence lenders have in our current and long-term outlook.”

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