Stocks opened in tightly mixed trade Wednesday, as rising oil prices countered early losses among chip stocks. Meanwhile, the Apple (AAPL) iPhone event and the approach of Hurricane Florence overshadowed early trade.
Amazon.com (AMZN) advanced after announcing it would expand its grocery delivery services. Marijuana IPO Tilray (TLRY) appeared set for a third straight gain. Gilead Sciences (GILD) spiked on positive clinical trial results.
The Dow Jones industrial average added 0.1%, with Chevron (CVX) and Exxon Mobil (XOM) leading. The S&P 500 managed a fractional gain. Gilead Sciences and Discovery Communications (DISCA) notched the S&P 500’s widest early advances.
Chipmakers sat at the bottom of the morning’s action. Intel (INTC) was down 1% on the Dow and Micron Technologies (MU) dropped 3.9%, among the weakest moves on both the S&P 500 and Nasdaq 100.
The Nasdaq Composite slipped 0.2%. Gilead was its top advancer. Chip stocks posted the 10 worst early hits among Nasdaq 100 listings.
IPO Stocks: Tilray Set For Gap Up Open; China’s Nio Prices Offering
Home Depot (HD) reversed early gains and dropped 0.4%, Lowe’s (LOW) fell 0.8% and generator manufacturer Generac (GNRC) skidded 1.2% as speculation eased regarding the impact of Hurricane Florence. Forecasters see the storm hitting South Carolina late Thursday, then possibly stall over the East Coast. That suggests heavy impact from rain and potential flooding.
Home Depot shares remained a buy range above a 204.35 buy point. Generac was extended above a 53.88 buy point. Lowe’s was extended above a 101.43 buy point.
Cannabis IPO Tilray bolted 12.7% higher at the open. The British Columbia-based distributor announced Tuesday it had exported its first CBD oil product into the U.K. for medical purposes. Shares are up 65% in September and nearly 500% above their July IPO price.
China-based electric car maker and purported Tesla (TSLA) rival Nio (NIO) was set to launch its IPO. Shares priced at 6.26, the low end of the expected range of 6.25 to 8.25. The pricing values the company at $6.4 billion. Nio aims to raise $1 billion with the offering.
Gilead Surges, Amazon Expands Deliveries
Gilead Sciences popped 3.7% higher after announcing the rheumatoid drug filgotinib hit its targets in a phase 3 clinical study. The biotech giant co-developed the drug with Galapagos (GLPG). Galapagos shares spiked 16% in premarket trade. Gilead is trading below a flat base buy point at 79.14.
Amazon gained 0.6% after announcing plans to expand delivery services from its Whole Foods grocery stores in 10 new cities. They include Las Vegas, Phoenix, Charlotte, Memphis, Nashville and New Orleans. The company also plans service expansion in Los Angeles, New York and Dallas/Ft.Worth. The service launched earlier this year now covers 38 cities, with grocery orders delivered in as little as an hour.
Amazon shares are extended after clearing a three-weeks tight pattern in July.
Apple dropped 0.7%. Chief Executive Tim Cook is expected to unveil three Apple iPhone models at an event scheduled to begin at 1 p.m. ET. Apple stock tends to fall on the company’s iPhone event day and week. Shares rose 2.5% on Tuesday, but that snapped a four-day losing streak. Apple stock is up 18% since its July 31 earnings report.
IBD 50 stock PGT Innovations (PGTI) tumbled 6% in opening action. The company announced late Tuesday a follow on offering of 7 million shares of common stock. PGT shares are up 55% so far this year, at new highs and extended after clearing a flat base in July.
Oil Tops $70; Producer Prices Post First Slip In 18 Months
Prices paid to producers dipped 0.1% in August, just below expectations for a flat month, and reportedly the first decrease in 18 months. The Labor Department said core prices, minus energy and food, also slipped 0.1%, vs. consensus expectations for a 0.1% gain.
Oil prices rose 1.3%, sending West Texas Intermediate above $70 per barrel, after data from the American Petroleum Institute late Tuesday showed a weekly inventory decrease of 8.6 million barrels, vs. expectations for a 2.7 million barrel draw. The Energy Information Administration releases official supplies data at 10:30 a.m. ET.
Federal Reserve Gov. Lael Brainard speaks at 12.45 p.m. ET in Detroit. The Fed’s August Beige Book report is due out at 2 p.m. ET.
Across global markets, China dug deeper into bear market territory on Wednesday, with the Shanghai Composite and Hong Kong’s Hang Seng index each falling 0.3%. Japan’s Nikkei 225 also dropped 0.3%.
Stocks in Europe recovered their early gains, as miners and energy companies lead the advance. London’s FTSE 100 reversed and rose 0.2%. Frankfurt’s DAX climbed 0.3%. And the CAC-40 in Paris held its 0.6% advance in afternoon trade.