The market opened on a high note yesterday but the rally quickly ran out of steam. U.S. stocks turned red shortly after the opening bell and ended up closing the session with deep losses. The S&P 500 fell 2.4% and the Nasdaq tumbled 2.7%.
It looks like we’re going to have more choppy trading action in today’s session. Futures are wobbling between small gains and losses ahead of the open.
In Asia, stocks sold off overnight. China’s Shanghai and Hang Seng composites dropped by 1.7% and 1.8%, respectively, while Japan’s Nikkei 225 declined 1.1%. European stocks are currently mixed and some countries are posting modest gains. The Eurozone Stoxx 600 is down 0.2%.
Today, we’ll hear pre-bell earnings reports from RiteAid [RAD], CarMax [KMX] and Accenture [ACN]. Later, Costco [COST] will report after the closing bell.
Here’s what’s moving the market this morning.
Jefferies Financial Group [JEF]
Jefferies released its Q3 earnings results yesterday after the closing bell, and the report blew past Wall Street’s expectations. The firm topped consensus estimates for both earnings and revenues by bringing in over $1.6 billion in the quarter, while analyst forecasts only expected revenues of $856 million.
The company had such a good quarter that it also announced an expansion of its share buyback program.
This blowout earnings report sent JEF on a sharp after-hours rally. It’s currently the leading S&P 500 stock with a 7.8% gain.
SPI Energy Ltd. [SPI]
SPI Energy is in the midst a spectacular rally. Yesterday, shares rallied a staggering 1,236.5% after the company announced a plan to launch an electric vehicle subsidiary before the open. The startup will go under the name EdisonFuture, and it will primarily design and develop electric vehicles and charging solutions.
The SPI opened yesterday’s session at just $1.05 per share and hit intraday highs of $46.47 before cooling off to close at $14. Believe it or not, the rally still isn’t over. Shares are up sharply again in today’s pre-market trading session on highly active volume.
SPI is up another 47.2% in the pre-market as this epic rally continues.
Just Energy [JE]
This tiny utility provider just received approval from U.S. regulations to go ahead with a planned “Recapitalization Transaction.” That removes the final regulatory hurdle from JE’s path, so it’s clear to move forward and close on the deal.
According to company statements, “The Recapitalization is part of a comprehensive plan to strengthen and de-risk the business and position Just Energy (JE) for sustainable growth as an independent industry leader. The Recapitalization significantly improves Just Energy’s financial flexibility with a cash injection from its equity raise and reduces net debt and preferred shares by approximately C$520 million.”
The market seems to be bullish on the deal because JE shares are skyrocketing on the news. The stock is trading actively and it’s currently up 99.2% in the pre-market.
E.W. Scripps Co. [SSP]
Scripps said it plans to buy ION Media for $2.65 billion with help from Warren Buffett’s Berkshire Hathaway [BRK.B]. Berkshire will put up a $600 million preferred-equity investment to help Scripps finance the deal. According to company statements, the deal will produce $500 million in synergies over the next sex years.
ION is currently owned by Black Diamond Capital Management. The television network owns broadcasting stations in 62 markets. The Wall Street Journal previously reported the deal, but Scripps wouldn’t confirm the story until this morning.
When Berkshire Hathaway steps into a deal, it’s sure to get the market’s attention. The vote of confidence from Buffett’s firm is sending Scripps on a sharp rally. Shares of SSP are currently up 43.1% in the pre-market trading session.