Stocks Pivot Lower as COVID-19 Cases Rise

Investors are still keeping an eye on continued stimulus negotiations

Digital Content Manager
Oct 19, 2020 at 11:51 AM
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The Dow Jones Industrial Average (DJI) is trading modestly below fair value at midday -- and has given triple-digit gains from this morning's stimulus optimism -- as coronavirus cases across the globe pile up to 40 million. The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are also lower, after Johns Hopkins University data showed the daily COVID-19 case average rising by more than 16% on a week-over-week basis. Elsewhere, investors are keeping an eye on the 48-hour deadline House Speaker Nancy Pelosi gave the Trump administration to reach a second stimulus deal.

Continue reading for more on today's market, including: 

  • Chocolate manufacturer lands analyst praise.
  • CVS stock rises after announcing hiring spree.
  • Plus, options bulls blast FLEX; Front Yard Residential stock surges on buyout news; and life insurance company drops after rejecting unsolicited offer.

Midday Market Stats 1019

One stock seeing notable options activity today is Flex Ltd (NYSE:FLEX), up 5% at $14.83 at last check. The jump came after the electronics name received an upgrade from RBC to "outperform" from "sector perform," as well as a price-target hike to $16 from $12. So far today, 11,000 calls have crossed the tape, or 14 times the average intraday amount and 19 times the number of puts traded. Most popular is the January 2021 14-strike call, where new positions are being opened, followed by the weekly 10/23 15-strike call. Longer term, FLEX is up 48.6% year-over-year.

Surging on the New York Stock Exchange (NYSE) is Front Yard Residential Corp (NYSE:RESI)up 35.6% at $13.48 at last check, and earlier hitting a three-year high of $13.68. Today's bull gap came after private equity firm Ares Management (ARES) and investment management firm Pretium agreed to buy the rental home concern for $767 million. The deal is expected to close in the first quarter of 2021, and is valued at about $2.4 billion, including debt. Prior to the acquisition, RESI had bounced from its May 15 all-time-low of $6.01, and. Quarter-to-date, the stock is up 54%.

Meanwhile, dropping lower is American Equity Investment Life Holding (NYSE:AEL), last seen down 12.8% at $28.17. This comes after the insurance company entered a partnership with Brookfield Asset Management, which is taking a 19.9% stake, and rejected an acquisition proposal from Athene Holding (ATH) and MassMutual. As a result, the stock received a price-target cut from KBW to $29 from $32. Before the news sent shares plummeting, however, the equity hit a two-year high on Oct. 1 of $34.25, and today's damage has so far been contained by its 20-day moving average.

AEL

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