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

support@smarteranalyst.com (Ben Mahaney)

US indexes are declining in afternoon trading as a short-lived recovery in technology stocks evaporated. The tech-heavy Nasdaq Composite Index is down 0.2%, while the Dow Jones Industrial Average is depreciating 0.5%. The S&P 500 Index is falling 0.5%.

Stay-at-home stocks Apple, Microsoft and Netflix are all down between 1% to 2%. Meanwhile, Tesla is gaining 3.3% and United Airlines is adding 3.3% helping to contain the Nasdaq’s declines.

Investors are also digesting mixed economic data. Initial jobless claims totaled a seasonally adjusted 884,000 for the week ended Sept. 5, unchanged from the number of applications received in the prior week as layoffs and furloughs persisted, the US Labor Department said. Another economic report showed that US producer prices advanced slightly more than expected in August.

Bucking the downward trend is luxury furnishings retailer RH, after topping 2Q estimates, sending shares up 24%. RH reported adjusted earnings of $4.90 per share, higher than analysts’ expectations of $3.41 per share. Revenues of $709.3 million came ahead of Street estimates of $707.14 million. “RH’s Q2 update impressed across the board with sharp demand improvement, a 29% EBIT beat and a surprisingly bullish 2H outlook comprised of ~18% sales growth and ~22% EBIT margins” exclaimed Wells Fargo’s Zachary Fadem.

Sanderson Farms is up almost 6% after Goldman Sachs analyst Adam Samuelson upgraded the stock to Buy from Hold and raised the price target to $139 (8.3% upside potential) from $127, citing an “increasingly attractive valuation for SAFM in light of near-term poultry market expectations that have already been reset lower, while our above-consensus FY21 EPS estimate suggests a return to a more normalized operating environment in the year ahead.”

Rosenblatt Securities’ initiation of Penn National Gaming with a Buy rating and a Street high price target of $80 (23% upside potential) is lifting shares by more than 12%. Rosenblatt analyst Bernie McTernan has high hopes for Penn's acquisition of a 36% interest in popular sports news platform Barstool Sports.

The gambling company "has the potential to gain significant share in online betting, driven by their partnership with Barstool providing a differentiated customer acquisition strategy. If PENN can leverage Barstool’s brand with a best-in-class and differentiated app, ... there is potential for PENN to be the market leader," McTernan said.

Not so lucky, GameStop is tanking 12% after the video gaming rental chain missed 2Q estimates due to lower store base and operating days amid the COVID-19 pandemic. Same-store sales plunged 12.7% year-over-year, with revenue down 27%- but global e-commerce sales spiked by an incredible 800%.

Following the halt of AstraZeneca/Oxford’s vaccine candidate this week after an adverse event in a single participant from the UK, the World Health Organization said that the trial halt is a “wake-up call”. The stock is down about 1%. “This is a wake-up call to recognize that there are ups and downs in clinical development and that we have to be prepared. We do not have to be discouraged. These things happen,” said WHO chief scientist Soumya Swaminathan.

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