Dow Looks to Snap 3-Week Slump as Stocks Turn Positive

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The Dow is up over 500 points at midday

The Dow Jones Industrial Average (DJI) is up over 500 points at midday, as stocks stage a fierce rebound after last night’s dovish Federal Reserve comments, and some reassurance that the China Evergrande Group crisis seems to be not as devastating as initially feared. As the blue-chip index looks to snap its three-week slump, the S&P 500 Index (SPX) has also turned positive for the week and sports a sizeable daily gain, while the Nasdaq Composite (IXIC) is higher as well this afternoon. Elsewhere, investors are brushing off worse-than-expected weekly jobless claims.

Despite this optimistic turn, the potential global impact from the Evergrande fallout is still reverberating. The property developer resolved payment on a local bond on Wednesday, but there is speculation on whether or not it will pay millions in interest on a U.S. dollar-denominated bond due today. Plus, the Wall Street Journal reports China is now asking local authorities to prepare for a “possible storm,” should Evergrande meet its demise. 

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

  • Call traders target Biogen stock after Needham turns bullish. 
  • The home building stock brushing off an earnings miss
  • Plus, MRM doubles on million-dollar buyout; Eargo stock slashed on DoJ investigation; and VIPS slammed with downgrade.  

One of the best performing stocks on the Nasdaq today is Madirom Healthcare Technologies Inc (NASDAQ:MRM). The equity was last seen up 100.4% at $14.81, after the company announced last night it would acquire Japanese hair salon business Zacc Kabushiki Kaisha in an all-cash deal worth 370 million yen, or approximately $3.36 million. The buyout deal is expected to close on Jan. 1, 2022. The stock is on track for its highest close since January, and just blew past recent pressure at its 60-day moving average. 

One of the worst stocks on the Nasdaq today is Eargo Inc (NASDAQ:EAR). The security was last seen down 69.5% at a record low of $6.61, after last night’s news that the firm is under criminal investigation by the U.S. Department of Justice (DoJ) for issues related to insurance reimbursement claims submitted on behalf of customers covered by its federal employee plans. In turn, EAR has withdrawn its guidance for the fiscal year ending on Dec. 31, and earned two downgrades, as well as a price-target cut at J.P. Morgan Securities. EAR has also slipped below support at the $20 level, and is off 85.3% year-to-date.

Vipshop Holdings Ltd (NYSE:VIPS) is seeing a surge in bearish options activity today. So far, 7,603 puts have exchanged hands, or eight times the intraday average. The most popular is the weekly 10/1 11-strike put, where positions are being opened, suggesting investors are expecting more downside for the stock by the time these contracts expire. VIPS is down 8.6% at $11.64 at midday, after J.P. Morgan Securities slashed its price target to a Street low of $11 from $22, and downgraded the security to “neutral” from “overweight.” Now trading at its lowest level in roughly two years, VIPS is off 31.2% year-over-year.