Unlike it has in five of the previous six trading sessions, the S&P 500 didn’t make new highs on Tuesday. The day featured choppy price action, as markets continue to digest the recent gains while holding up near the highs. But that doesn’t mean it was a boring session in the stock market today.
First, the T-Mobile (NASDAQ:TMUS) merger with Sprint (NYSE:S) — the one that’s been seemingly going on forever — finally received the green light from the Federal Communications Commission. The commission gave the formal nod to the tie-up, which was all but expected after voting members implied they would vote in favor of the deal. The last issue that remains? An objection among several states, which will be argued on in December.
The bigger news of the day comes from Walgreens (NASDAQ:WBA). Shares ended higher by just 2.6%, even as reports hit the Street that Walgreens is meeting with large private equity firms about putting together a massive buyout deal.
While Walgreens hasn’t issued a comment to the reports yet, the company is reportedly working with Evercore Partners in the process. Remember, Walgreens has a $52 billion market capitalization, so this isn’t exactly small potatoes. That said, shares have been under tremendous pressure — as has CVS Health (NYSE:CVS) — leaving the stock with a 3.1% dividend yield and trading at 10 times earnings. In other words, a buyout would make sense.
Movers in the Stock Market Today
Uber (NYSE:UBER) stock made new 52-week lows on Tuesday. Shares fell about 10% at one point, despite the company beating on third-quarter earnings. A loss of 68 cents per share was 16 cents ahead of expectations, but revenue of $3.5 billion missed estimates by roughly $150 million.
It was certainly a mixed quarter. While revenue missed expectations, so did gross bookings. However, management raised its EBITDA outlook for the full year, now expecting a loss of $2.8 billion to $2.9 billion. That’s better than prior outlook calling for an EBITDA loss of $3.2 billion to $3.3 billion and tops consensus expectations for a $3.19 billion EBITDA loss. Still, that’s a lot of lettuce to lose, which is why investors are likely selling the stock lower.
Others under earnings-related pressure? Shake Shack (NYSE:SHAK) and Peloton (NASDAQ:PTON).
Shake Shack beat on earnings and revenue expectations, but comparable-store sales missed expectations. Further, margins slipped and management’s full-year revenue outlook came up short of estimates, despite raising it from last quarter. They now expect sales of $592 million to $597 million vs. consensus expectations of $600 million.
Still, shares do not look great from a technical perspective.
When it comes to Peloton, I’m not sure there’s anything the company can do to win over Wall Street right now. The company missed on earnings expectations, but beat on revenue estimates as sales more than doubled year-over-year. Further, management’s full-year revenue outlook of $1.45 billion to $1.5 billion topped estimates of $1.4 billion. Remember, Peloton priced its IPO at $29 in September, opened at $27 and has been dropping ever since. On the plus side though, shares aren’t making new 52-week lows on the day, although it did fall 7.6%
Nio (NYSE:NIO) shares erupted higher on Tuesday, climbing 37.7% after announcing a deal with Mobileye. The latter is now a unit of Intel (NASDAQ:INTC), but plans on working with Nio to develop autonomous features and vehicles in China. This comes as Tesla (NASDAQ:TSLA) readies its new Gigafactory in Shanghai.
Speaking of new partnerships, Nvidia (NASDAQ:NVDA) announced it would begin working with the United States Postal Service. However, they are not working on autonomous driving delivery systems. Instead, the USPS will utilize Nvidia’s artificial intelligence tech to drastically improve its package data processing efficiency. Delivery of the systems will begin this year, while the two plan to be fully operational by spring 2020.
While we’re talking INTC and NVDA, it’s worth noting that Advanced Micro Devices (NASDAQ:AMD) made new 52-week highs on the day, at $37.18.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA.
