- Wall Street continued to shake off recent COVID fears on Wednesday. A growing sense that the Delta variant won't force a renewed closure of the economy has given fresh strength to reopening stocks.
- This dynamic prompted a substantial rally in cruise companies on Wednesday. Carnival (NYSE:CCL), Norwegian Cruise Line (NYSE:NCLH) and Royal Caribbean (NYSE:RCL) all posted notable advances.
- Studio City International (NYSE:MSC) also posted a notable gain during Wednesday's trading, though the advance came with an air of mystery. Shares skyrocketed and were halted for a period of time, with little news besides the setting of an earnings release date.
- Meanwhile, Healthcare Services (NASDAQ:HCSG) was one of the standout losers on the day. The stock posted a double-digit percentage decline on disappointing quarterly results.
- The Nasdaq (NASDAQ:NDAQ) - the exchange itself - stepped out of the background on Wednesday. The company reported better-than-expected results, news that took shares to a new 52-week high. Lumos Pharma (NASDAQ:LUMO) plunged to a new low on a delay in the timeline for its pediatric growth hormone product.
Sector In Focus
- In Tuesday's Hot Stocks column, we highlighted a rebound in the airline sector. Despite some worrisome data on increasing COVID cases, stocks like MESA, SKYW and AAL notched sizable gains.
- Those stocks continued to rise on Wednesday, in part bolstered by better-than-expected results from United Airlines (NASDAQ:UAL).
- However, leadership in the reopening story turned to cruise companies during Wednesday's session. This included a 10% jump in NCLH and a 9% rally in CCL. RCL climbed 5%.
Standout Gainer
- Speaking of a potential reopening trade, let's turn to Studio City International. The Macau casino operator saw its shares pop 36% on the session, inspiring a volatility-related trading halt at one point.
- As a casino operator in one of China's main gambling markets, the stock could benefit from better investor attitudes towards a pandemic recovery. Except, in this case, the exact cause of the rally remains uncertain. No solid news was ever released on Wednesday.
- On Tuesday, the company announced that it would report earnings on July 27. Meanwhile, JPMorgan released a research note pointing to an expected recovery in the Macau market.
Standout Loser
- Healthcare Services had a more obvious reason for its performance on Wednesday: weak earnings.
- The company reported a quarterly EPS figure that was less than half what analysts had projected. Meanwhile, revenue fell by a larger-than-expected 12%, coming in at $398M.
- Weighed down by the news, HCSG dropped about 12% on the session. Shares finished the day at $26.92, its lowest close since December.
Notable New High
- It's been common over the past year to say "the Nasdaq reached new highs today." Typically, this refers to the stock index.
- On Wednesday, that phrase could also refer to the exchange itself, which rallied to a new peak with the help of strong quarterly results.
- NDAQ climbed nearly 3% on the session, thanks to better-than-expected earnings. The bottom-line figure was bolstered by 21% revenue growth. The company also revealed plans for an accelerated buyback program.
- Nasdaq CEO Adena Friedman attributed the company's recent strength to growing complexity in financial markets. This spurred additional interest in some of the firm's lesser-known businesses, like its anti-financial crime unit.
Notable New Low
- Lumos Pharma said Wednesday that it now expects data from a mid-stage trial of LUM-201 in the second half of 2023. This marked a delay from its previous timeline, as COVID made it difficult to find test sites and enroll patients.
- Lumos said it had a sufficient cash balance to continue operations until it gets data from two key clinical trials. Still, LUMO dropped 12% on the day, setting a new 52-week low of $8.20.
- For more details about Wednesday's broader market action, check out SA's equity commentary.