The major U.S. equity indices mounted a late-day rally Wednesday on stabilizing oil prices after stocks opened the session lower on a dip in crude prices — underscoring the sentiment that stocks are tightly correlated to oil right now.
West Texas Intermediate futures closed up 1%, helping the S&P 500 and the Dow Jones Industrial Average notch fractional gains — the former was down by as much as 1.6% on the day. A late rally in tech stocks lifted the Nasdaq Composite to a gain of nearly 1%.
Of course, a few stocks didn’t need to wait until the end of the day to get going. Chesapeake Energy Corporation (NYSE:CHK), First Solar, Inc. (NASDAQ:FSLR) and Etsy Inc (NASDAQ:ETSY) all shot higher right out of the gate, and finished the day with considerable gains.
Here’s why:
Chesapeake Energy Corporation (CHK)
Shares of Chesapeake Energy, one of the largest U.S. natural gas producers, climbed nearly 23% on heavy volume after the Oklahoma-based company said it plans to cut capital spending this year by up to $1.8 billion — nearly 60% less than what it spent last year — and that it could sell up to $1 billion worth of assets.
Since the end of last year, Chesapeake has sold more than $700 million in assets as part of its efforts to raise cash. The company lost $15 billion last year, including a fourth-quarter loss of $2.2 billion.
CHK shares had been halved since Jan. 1 heading into today’s trading day. Even with Wednesday’s gains, Chesapeake is off 40%.
First Solar, Inc. (FSLR)
Shares of First Solar, the largest U.S. maker of solar equipment, surged 12.4% on volume that was nearly triple the daily average after a lot of positive news in its fourth-quarter earnings report.
Earnings of $1.60 per share on $942 million in revenue beat expectations for 78 cents per share and $929.01 million, respectively.
Guidance pleased Wall Street, too. FSLR raised its 2016 shipment guidance to an increase of 17% to 18% from a previous range of 16% to 18%. Moreover, First Solar said it expects to earn $4 to $4.50 per share this year on revenue of $3.8 billion to $4 billion, with the top end of both ranges coming in above respective analyst expectations for $4.12 per share and $2.83 billion.
Etsy Inc (ETSY)
Etsy soared 6.9% on volume that was six times the daily average. The online marketplace for unique and small items said its fourth-quarter sales climbed to $87.9 million, beating the Wall Street estimate of $86.7 million. Wall Street ignored Etsy’s bottom-line disappointment, with the company logging a 4-cent loss versus estimates for a penny deficit.
Etsy said it expects sales will increase this year toward the higher end of a range of 20% to 25%. Bloomberg also reported that ETSY is looking for a three-year compound annual growth rate for revenue of 20% to 25% with a gross margin percent in the mid-60s.
As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities.
