A sour day for Tesla CEO Elon Musk costs the Nasdaq plus more news in Wednesday’s Closing Bell on Money and Markets.
The Top Story
All good things must come to an end, and for Tesla Inc. (Nasdaq: TSLA) that end came Wednesday.
After nearly two months of strong gains that pushed the stock over $940, the electric automaker came back to reality … in a big way.
Shares of Tesla plummeted 17.1% Wednesday after the company reported February car deliveries would be pushed back due to the coronavirus outbreak.
Tesla saw a 20% gain in its stock Monday followed by another 13.7% jump on Tuesday.
The company closed its Shanghai factory, which had only started delivering Model 3s in January, after the Lunar New Year as the coronavirus continued to spread widely across China.
Additionally, Canaccord Genuity dropped its rating of Tesla to “hold” Wednesday, prompting further investor backlash. Canaccord analyst Jed Dorsheimer did not change the price target for Tesla — still at $750 — but called the coronavirus outbreak a “clear headwind” for Tesla.
Money and Markets: Closing Bell*
S&P 500: 3,334 (+37 points, +1.1%)
DOW: 29,290 (+483 points, +1.6%)
NASDAQ: 9,508 (+40 points, +0.4%)
GOLD: $1,556.80 (+$4.10, +0.2%)
BITCOIN: $9,685.99 (+$521.17, +5.7%)
U.S. 10-YEAR YIELD: 1.65%
*- as of 4:17 p.m.
A Big Win
In Wednesday’s Wall Street Wake-Up, we told you about Merck & Co. (NYSE: MRK) spinning off $6.5 billion in assets to create a new company. Investors didn’t take the news well as shares of Merck were down 2.8% Wednesday.
Ford Motor Co. (NYSE: F) saw its shares drop more than 9.4% after its extremely weak Q4 report. Check out our analysis on Ford here.
While Snap Inc. (NYSE: SNAP) had solid earnings, it missed its Q4 revenue. Shares of the social media company were down 14.7% Wednesday afternoon.
Shares of Gilead Sciences Inc. (Nasdaq: GILD) fell 2.2% after the company reported a revenue miss in its latest quarterly report. The company also dropped its 2020 guidance.
M&A News
Spotify Inc. (NYSE: SPOT) is acquiring sports and entertainment news company The Ringer. It adds to the three podcast acquisitions Spotify made last year. The Ringer has approximately 30 podcasts under its brand. Terms of the deal were not disclosed. Shares of Spotify fell 4.7% Wednesday.
New York Stock Exchange owner Intercontinental Exchange Inc. (NYSE: ICE) has agreed to acquire Bridge2 Solutions, a company specializing in loyalty solutions for merchants and consumers. Terms of the deal were not disclosed. Shares of ICE were up 0.3% Wednesday.
Golden Nuggets
Precious metal prices were mainly up Wednesday, but gains were small due to a continued rally in U.S. equities.
Gold prices rose 0.3% to $1,560.80 while silver ticked up 0.03% to $17.58 an ounce. Platinum had the biggest gain in the precious metals market as it moved up 2% to $982.00 an ounce.
Palladium was the only major precious metal to fall Wednesday — dropping to $2,312 an ounce.
Cannabis Corner
Cannabis-infused drink maker Puration Inc. (Over-the-Counter: PURA) plans to use a $5 million investment to purchase smaller cannabis infusion companies.
The debt from the fund would be repaid with stock at $0.10 per share.
Other cannabis companies were mostly down Wednesday.
Aurora Cannabis Inc. (NYSE: ACB) dropped 0.9% while Canopy Growth Corp. (NYSE: CGC) fell off 2.9%. The Advisorshares Pure Cannabis ETF (NYSE: YOLO) was down by 0.3%.
Stock Market Update
The Dow and S&P 500 had very strong days Wednesday. The Nasdaq would have had a good day, if not for Tesla.
Because of the 17.1% drop in Tesla’s share price, gains in the Nasdaq were pared significantly.
The Dow Jones Industrial Average rose 1.6% while the S&P 500 rose 1.1% to a record close.
The Nasdaq, on the other hand, had a slim 0.4% gain.
In other economic news, the U.S. jobs market posted a strong January, adding 291,000 in private payrolls in January. It’s the best monthly gain since May 2015.
The jump was well above estimates for the month — which were around 150,000. It was also a big jump from December with the U.S. added 199,000.
Today’s Big Winners:
Biogen Inc. (Nasdaq: BIIB) +17.5%
Coty Inc. (NYSE: COTY) 14.4%
Microchip Technology Inc. (Nasdaq: MCHP) +6.7%
UnitedHealth Group Inc. (NYSE: UNH) +5.3%
IBM Corp. (NYSE: IBM) +4.8%
Today’s Big Losers:
Tesla Inc. (Nasdaq: TSLA) -17.1%
Ford Motor Co. (NYSE: F) -9.4%
Seagate Technology PLC (Nasdaq: STX) -7.2%
Paycom Software Inc. (NYSE: PAYC) -4.5%
Take-Two Interactive Software Inc. (Nasdaq: TTWO) -4.8%
Check back for the most important news and numbers each day after the Closing Bell, only on Money and Markets.
Don’t forget about “Marijuana Markets: a POTcast,” featuring the biggest cannabis news and investment notes from Banyan Hill’s Anthony Planas, here on Money and Markets each Saturday morning.