Thursday's saw-toothed session left stocks lower for a second time this week as Facebook (FB) reversed its early gains and investors looked toward Amazon.com's (AMZN) quarterly report after the close — and to the January payrolls report coming up Friday morning.
Preliminary data show volume tracking well below Wednesday's levels on the stock market today.
Early data showing a jump in January layoffs, lower-than-expected weekly unemployment claims and a slowdown in fourth-quarter worker productivity contributed to the session's wobbly start. Bonds were steady ahead of Friday's jobs report. Oil closed down a 0.5% with West Texas intermediate at $53.54 a barrel.
Market Shakers: Merck, Mead Johnson, Facebook, Edwards Lifesciences
Facebook backed out of modest early gains to end 2% lower following its fiscal first quarter earnings beat late Wednesday. The stock closed 1% above a cup-with-handle buy point of 129.37.
Amazon managed a 1% gain in regular trade, but quickly dropped 4% after the close. The e-commerce giant's Q4 results were mixed, with a better-than-forecast 55% jump in earnings and a 22% revenue gain, which missed analyst expectations. The after-hours decline put shares back below an 821.75 buy point from a cup-with-handle base. Extended session gains and losses often do not carry through to the next session's regular trade.
Amgen (AMGN), AthenaHealth (ATHN), Deckers Outdoor (DECK) and Visa (V) were among other names expected to report after the close.
Infant formula maker Mead Johnson (MJN) spiked 22% after confirming it was in discussions with U.K.-based Reckitt Benckiser to acquire Mead's outstanding shares at $90 each, valuing the deal at around $16.7 billion. Mead's Enfamil is the second-largest infant formula brand in the world. Reckitt Benckiser shares ended 4% higher on the London Stock Exchange.
Merck (MRK) was the Dow's big winner, up 3% after mixed fourth-quarter results were affected by the launch of a resource planning system and patent expirations on several key drugs. Merck closed 9% above a December low as it climbs the right side of a two-month base pattern.
Among IBD 50 stocks, Cadence Systems (CDNS) screamed 12% higher. The design automation software developer reported late Wednesday fourth-quarter results that narrowly topped analysts projections. Management's first-quarter earnings guidance was in line with consensus views; revenue came in above expectations. The breakout gain left the stock at a new high and 6% above a flat base buy point of 27.14.
Prestige Brand Holdings (PBH), also an IBD 50 stock, belted out a 6% gain. The maker of Chloraseptic, Clear Eyes, Efferdent and Beano stomped analyst fourth-quarter expectations and tightened up its full-year guidance. The low-volume move cleared a 53.90 buy point in an imperfect cup-with-handle base.
Edwards Lifesciences (EW) dropped 8.5% in heavy trade despite reporting better-than-forecast fourth quarter results late Wednesday. Q1 and full-year guidance was in line with analysts' views, but BTIG downgraded the stock to neutral from buy. Edwards had been in an uptrend since early December, working to recover from a deep, two-month sell off.
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