Dow's Rough Start Breaks Up Home Depot's Post-Earnings Party

Traders are selling the news as LOXO links up with Bayer on cancer drugs

Managing Editor
Nov 14, 2017 at 10:21 AM
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U.S. stocks are trading lower this morning, as traders eye the latest inflation data and a mixed bag of retail earnings. Among the stocks making moves today are home improvement and supply store Home Depot Inc (NYSE:HD), British telecom company Vodafone Group Plc (NASDAQ:VOD), and pharmaceutical concern Loxo Oncology Inc (NASDAQ:LOXO). Here's a closer look at what's moving shares of HD, VOD, and LOXO.

Home Depot Wobbles Despite Third-Quarter Beat

Shares of Home Depot have erased their pre-market gains, despite the retailer's third-quarter earnings beat and freshly hiked full-year forecast. HD is off 0.5% at $164.90, backing down from a brief trip up to an intraday high of $167.17 earlier in the session. The Dow component is still up 23% on a year-to-date basis

Ahead of earnings, HD options traders were showing optimism. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows HD with a 10-day call/put volume ratio of 2.33, which ranks in the 76th percentile of its annual range. This suggests that calls have been bought to open over puts at a faster-than-usual rate during the past two weeks.

VOD Soars on Positive First-Half Earnings

Vodafone reported a stronger-than-forecast first-half profit, and subsequently raised its full-year earnings growth forecast up to 10%. The mobile operator's stock is up 5% at $30.29 at last check -- just shy of its late-May high at $30.39 -- and has now gained 24% on the year. Analyst sentiment on VOD was positive ahead of earnings, with five out of the six brokerage firms following the stock carrying "strong buy" recommendations.

Loxo Oncology Stock Dips After Bayer Deal

Shares of Loxo Oncology are moving lower, despite the drug company's new deal to develop and commercialize two cancer drugs with pharma heavyweight Bayer -- a pact valued at up to $1.55 billion. LOXO is trading down 7.7% at $76.81, with the shares currently sandwiched between emerging resistance at their 80-day moving average and late-2016 support at their rising 120-day trendline.

Based on today's "sell the news" reaction, bears appear to be in control of LOXO at the moment. Short interest crept higher in the most recent reporting period, and now represents nearly 19% of the stock's total available float.This accumulation of bearish bets represents 11.8 times LOXO's average daily volume.

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