Uber and Lyft take different roads in search of profit

Uber Technologies Inc (UBER.N) and Lyft Inc (LYFT.O), the two leading U.S. ride-hailing companies, are on divergent paths as Uber pours money into money-losing side businesses while smaller rival Lyft focuses on moving people around.

Uber shares shot up 9% on Friday after the company said on Thursday it could achieve a measure of company-wide profitability in the fourth quarter of 2020, a year ahead of a previous target. That measure excludes expenses for stock-based compensation and other items. Uber still expects to lose more than $1 billion for all of 2020.

Uber and Lyft, both based in San Francisco, are ride hailing’s odd couple. Uber is much larger, with $3.8 billion in revenues for the first nine months of 2019 compared to $956 million for Lyft. At almost $69 billion, Uber’s market valuation is nearly five times that of Lyft’s – and well ahead of automaker General Motors Co(GM.N).

Uber operates in more markets around the world, although it has clashed with regulators in London and Germany and struggled in some Asian markets. Lyft focuses on North America.

Lyft has more quickly developed ways to retain high-paying repeat riders across its entire operation via a single subscription model it launched in October. Uber on Thursday told investors 2020 would be the “year of subscriptions” when it plans to combine its loyalty programs across rides and food delivery into a single plan.

Uber currently offers a cross-platform points rewards program and in 2018 launched a monthly subscription that protects riders against surge pricing because of traffic or weather, available in 40 U.S. cities.

Uber’s ride-hailing business, which generates around three quarters of its revenue, is profitable right now. Uber’s other operations are dragging down the company’s bottom line. Over the past five years, Uber has built out its food-delivery business Eats, developed self-driving cars, worked on long-haul trucking operations and even on commercial passenger drone shuttles.

All of those businesses are money losers. Uber Eats recorded an adjusted EBITDA loss of $777 million in the last two quarters of 2019, the two quarters for which it broke out that metric.

Most major analysts still prefer shares of Uber. Its size, the profitability of its ride-hailing segment and its ability to withstand regional downturns or regulatory pressure in a single market made it a safer long-term investment, said Angelo Zino, analyst at CFRA.

But some analysts said Lyft is a less-risky bet.

“We prefer Lyft because it focuses on the most profitable business in North America, the largest rides market,” Cascend Securities analyst Eric Ross said.

Uber and Lyft declined to comment.

Lyft is reporting fourth quarter earnings on Feb. 11. In October it told investors it would be adjusted EBITDA profitable by the end of 2021. Analysts said they did not expect Lyft to move its profit target.

Lyft has integrated public transit information into its app for seven U.S. cities in the hopes of turning its app into a single transportation platform. Uber has integrated transit information of eight U.S. cities and allows customers in Las Vegas and Denver to purchase public transit tickets through its app.

Dan Morgan, portfolio manager at Synovus Trust, said Uber should focus on what it does best – connecting customers through its app – and ditch efforts to develop its own self-driving cars or passenger drone technology.

“If you’re losing as much money as Uber, it makes sense to leave those businesses to other companies who have the competency,” Morgan said.

Trump ‘apoplectic’ with UK over Huawei 5G decision as US suggests taking stake in Nokia, Ericsson

The U.S. Attorney General said America should consider taking a controlling stake in European telecoms equipment makers Nokia and Ericsson to “blunt” Chinese firm Huawei’s “drive to domination.”

William Barr’s comments come after President Donald Trump expressed “apoplectic” fury towards U.K. Prime Minister Boris Johnson over Britain’s decision to allow Huawei limited participation in its 5G networks, according to a report from the Financial Times.

5G refers to next-generation mobile networks that promise super fast data speeds and will become critical to future infrastructure. Washington has maintained that Huawei’s equipment could be used for espionage on Americans by Beijing. The U.S. also argues that if Huawei owns 5G infrastructure, by default, it’s in the hands of China and they could shut down networks at any time. Huawei has denied all of the allegations.

The U.S. has been pressuring allies, including the U.K., to completely block Huawei from its 5G networks. But last month, Britain decided to allow Huawei to participate in a limited part of the 5G rollout and limit the Chinese company’s market share, in a move that was seen as a test for the relationship between the U.K. and U.S.

The FT reported, citing officials, that after this decision, Trump and Johnson had a phone call in which the U.S. president expressed anger at the British Prime Minister.

The White House and Downing Street were not immediately available for comment when contacted by CNBC.

Huawei competitor

Huawei’s biggest rivals are Finnish firm Nokia and Swedish company Ericsson. The U.S. does not have a rival to the Chinese firm.

But there have been rising calls to create an American competitor, a tough task given the long lead time and high cost it would take to develop the technology and the fact that 5G has already begun rolling out globally.

Instead, Barr offered a different option, suggesting the U.S. find a way to take a controlling stake in Nokia and Ericsson.

“We have to make a decision on the horse we’re going to ride in this race,” Barr said during a speech at a conference run by the Center for Strategic and International Studies. “Who is the 5G equipment supplier or suppliers that we will rely on to compete against Huawei around the globe to win contracts from operators and blunt Huawei’s drive to domination?”

He said the Nokia and Ericsson don’t have “Huawei’s scale nor the backing of a powerful country with a large embedded market like China” and suggested the U.S. “actively” consider buying a stake.

“There have been some proposals that these concerns could be met by the United States aligning itself with Nokia and or Ericsson through American ownership of a controlling stake either directly or through a consortium of private American and allied companies,” Barr said.

“Putting our large market and financial muscle behind one or both of these firms, would make it a far more formidable competitor and eliminate concerns over … their staying power.”

Ericsson declined to comment when contacted by CNBC.

“We always welcome investor interest in Nokia. Beyond that we cannot comment on Mr Barr’s statement,” a Nokia spokesperson told CNBC.

Ericsson shares were up near 3.7% around 10:0 a.m. London time while Nokia was just shy of 4% higher.

Potential Ericsson deal ‘positive’

Ericsson’s biggest shareholder Cevian Capital said U.S. interest in technology firm, is “clearly positive” for the company, Sweden and shareholders.

“An acquisition is really the only alternative if the U.S. wants to be leading in this area (5G). Such an acquisition would in turn mean significant resources to invest on innovation and market leadership,” Christer Gardell, managing partner at Cevian Capital, told CNBC by email.

He said that any deal would be based on a “completely different valuation level than today for Ericsson,” claiming the current share price “greatly undervalues the company’s long-term fundamentals.”

But ultimately, Gardell appeared to back an American deal.

“It is clearly better for Sweden, the company, the employees and the shareholders that an American deal is done with Ericsson and not with Nokia. The board and management need to drive and handle this question with the highest priority,” he said.

Just how the U.S. could take a stake in Ericsson and Nokia remains to be seen. There are also questions over whether such a move may raise concerns with the European Union.

“Both Ericsson and Nokia are publicly listed, meaning that the US could build a stake that way, but how they would do it remains to be seen, as this is not something they usually do with US companies, let alone foreign ones,” Dexter Thillien, senior analyst at Fitch Solutions, told CNBC by email.

“I don’t think Ericsson and Nokia would be particularly happy about it either, because it reinforces the perception that they’re so far behind Huawei they need US state help, and might give China the excuse to ban the from the country (it’s a small part of their respective overall revenues).”

Trump’s next budget could give NASA a huge funding windfall

If NASA is going to fulfill its goal of returning to the Moon by 2024, it’s going to need a lot of money in very short order — and that might be forthcoming. The Trump administration is proposing one of the largest NASA budgets in years as part of its latest budget, earmarking $25 billion for the space agency versus the $19 billion from the first year of the administration and $22 billion for this year. Nearly $3 billion of that would be devoted to creating the vehicles needed for the Artemis program. The budget is also poised to outline Artemis’ complete costs and provide a clearer roadmap for the 2024 mission.

The problem, of course, is that budgets need congressional approval — and there’s no guarantee the budget will go through Congress unaltered. A House subcommittee recently put forward a bill that would push the Moon landing to 2028 and shift the focus to a Mars orbital mission in 2033. And it wouldn’t be surprising to see politicians contend that those billions should go toward addressing lingering problems here on Earth rather than space missions with limited initial utility.

Should the budget go through, however, it would represent a considerably deeper commitment to Artemis than in the past. While some of the pieces are already falling into place, this would clearly make room for much more.

NASA Astronaut Christina Koch Just Officially Shattered a New Spaceflight Record

NASA’s Christina Koch returned to Earth safely on Thursday after shattering the spaceflight record for female astronauts with a stay of almost 11 months aboard the International Space Station.

Koch touched down at 09:12 GMT on the Kazakh steppe after 328 days in space, along with Luca Parmitano of the European Space Agency and Alexander Skvortsov of the Russian space agency.

Koch was shown seated and smiling broadly after being extracted from the Soyuz descent module in the Roscosmos space agency’s video footage from the landing site.

“I am so overwhelmed and happy right now,” said Koch, who blasted off on 14 March last year.

Parmitano pumped his fists in the air after being lifted into his chair while Skvortsov was shown eating an apple.

Local Kazakhs on horseback were among those to witness the capsule landing in the snow-covered steppe as support crews gathered around the three astronauts, NASA commentator Rob Navias said.

“I’ve never seen this,” Navias exclaimed, reporting that the men stopped to chat with engineering personnel.

Koch, a 41-year-old Michigan-born engineer, on 28 December last year beat the previous record for a single spaceflight by a woman of 289 days, set by NASA veteran Peggy Whitson in 2016-17.

Koch called three-time flyer Whitson, now 60, “a heroine of mine” and a “mentor” in the space programme after she surpassed the record.

She also spoke of her desire to “inspire the next generation of explorers.”

Koch also made history as one half of the first-ever all-woman spacewalk along with NASA counterpart Jessica Meir – her classmate from NASA training – in October last year.

The spacewalk was initially postponed because the space station did not have two suits of the right size, leading to allegations of sexism.

Ahead of the three-and-a-half hour journey back to Earth, Koch told NBC on Tuesday that she would “miss microgravity”.

“It’s really fun to be in a place where you can just bounce around between the ceiling and the floor whenever you want,” she said, smiling as she twisted her body around the ISS.

She will now head to NASA headquarters in Houston, via the Kazakh city of Karaganda and Cologne in Germany, where she will undergo medical testing.

Koch’s medical data will be especially valuable to NASA scientists as the agency draws up plans for a long-duration manned mission to Mars.

‘Make space for women’

Koch’s return comes after an advert for a skincare brand ran during an intermission in the American football Super Bowl with a call to “make space for women”.

The advert featured NASA astronaut Nicole Stott and saw the company promise to donate up to US$500,000 to the non-profit Women Who Code, which works with young women seeking careers in tech and scientific fields.

The first woman in space was Soviet cosmonaut Valentina Tereshkova whose spaceflight in 1963 is still the only solo mission carried out by a woman.

Russia has sent only one woman to the ISS since expeditions began in 2000 – Yelena Serova whose mission launched in 2014.

Both Tereshkova and Serova are now lawmakers in the Russian parliament, where they represent the ruling United Russia party.

Unlike Koch, whose ISS stay was extended, Parmitano and Skvortsov were rounding off regular half-year missions.

Parmitano handed over command of the ISS to Roscosmos’s Oleg Skripochka on Tuesday.

The 43-year-old Italian posted regular shots of the Earth while aboard, highlighting the plight of the Amazon rainforest and describing the Alps as “like a spinal column, never bending to time”.

Four male cosmonauts have spent a year or longer in space as part of a single mission with Russian Valery Polyakov’s 437 days the overall record.

Scott Kelly holds the record for a NASA astronaut, posting 340 days at the ISS before he returned home in 2016.

Uber shares spike as company says it will reach a key profitability goal sooner than expected

Uber stock rose in extended trading on Thursday after the company announced a fourth-quarter loss that was narrower than analysts had expected and moved its EBITDA profitability forecast forward.

The company’s shares spiked as much as 10% after hours when CEO Dara Khosrowshahi said on the company’s earnings call that the company was moving its EBITDA profitability target to Q4 2020, ahead of its original promise of profitability in 2021. They’re now trading up about 5% after hours.

Here’s how the company did:

  • Loss per share: Excluding certain items, 64 cents, vs. 68 cents as expected by analysts, according to Refinitiv.
  • Revenue: $4.07 billion, vs. $4.06 billion as expected by analysts, according to Refinitiv.

Uber’s revenue growth accelerated on an annualized basis to 37% from 30% one quarter ago, the company said in a statement. Net loss attributable to Uber for all of 2019 totaled $8.51 billion, primarily because of stock-based compensation.

With respect to guidance, Uber is forecasting a $1.35 billion loss at the middle of the range in terms of in earnings before interest, taxes, depreciation and amortization (EBITDA) for 2020. The estimate is less than the FactSet analyst consensus of a $2.83 billion loss.

Uber’s top segment, Rides, including ride-sharing services and fees from drivers, delivered $13.51 billion in gross bookings, up 18% and below the $13.60 billion estimate among analysts polled by FactSet.

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Uber attributed growth in Rides to ongoing global expansion, access to pick up and drop off passengers at airports the world over, and higher-priced premium offerings for passengers like Uber Comfort, which uses vehicles with more head- and legroom.

Moving ahead, executives said they planned to grow their core, ride hail business geographically, using tech to improve pricing and driver-to-passenger matching, and through “enterprise” offerings. Uber for Business shouldn’t be expected to drive bookings growth, but should help Uber improve its margins, the CEO said.

The company is also promoting lower-cost rides on its platform, including on JUMP dockless and electric bikes. JUMP recently expanded to Australia, New Zealand and Washington D.C.

Gross bookings from the Eats segment, including payments from restaurant and delivery partners, came in at $4.37 billion, up 71% and above analysts’ $4.13 billion estimate.

Uber is still paying out a massive amount of what it calls “driver referrals and excess driver incentives” to drivers in its food and ridesharing business.

Eats referrals and incentives for drivers cost Uber $1.13 billion in 2019, and $319 million in Q4 alone, according to the filing. Rides driver referrals and excess driver incentives cost Uber $123 million in 2019, with $20 million of that in Q4, the filing said.

In its Q4 release, it also reminded shareholders that it is now the most downloaded app globally in two categories, ridesharing and food delivery on both the Apple App Store, and Google Play Store, according to SensorTower.

‘The year of subscriptions’

Looking ahead, Khosrowshahi said, “2020 is going to be the year of subscriptions at Uber.”

The CEO noted that when an Uber user tries at least two different Uber services, like ridesharing and food delivery, they triple their overall usage of Uber. Subscriptions encourage that increased usage.

While Uber recently sold its food delivery business in India to Zomato, Khosrowshahi said Eats is in “very early innings” and looks promising in other regions. He noted that, in Australia, Uber Eats business on a top line basis is comparable to its Rides business. It’s not close to that on a global business, he said. But “long-term rationalization” for Eats is there.

Executives said self-driving technology would not figure in their business near-term, outside of research and development efforts.

Uber scored a $1 billion in funding to spin out its Advanced Technologies Group (ATG) in April 2019. Toyota and Japanese auto-parts supplier Denso planned to invest $667 million, while Softbank’s Vision Fund committed to invest $333 million.

Executives on Uber’s Q4 call said that capital pre-funded about 18 months of development work.

Red Flags Emerge in U.S. Stocks With Insiders Rushing to Sell

The list of warning signs for the rally that pushed U.S. stocks to another record is growing longer.

As the S&P 500 Index embarked on a torrid four-day advance, corporate executives and officers have stepped up selling shares in their own companies — so much so that there were five insider sales for every one buy, according to data compiled by Washington Service. That’s poised to be the highest since early 2017.

Insiders have been stepping up the pace of sales all year, taking advantage of the S&P 500’s 12% rally since the end of September that pushed valuations toward the highest in almost two decades. While other factors can also drive the decision to unload shares, the action from companies’ highest-ranking employees is worth heeding — a similar spike in insider sales coincided with the market’s peak in January 2018 that gave way to a sell-off later in the year.

“In the broad-brush sense, more sellers than buyers is somewhat related to valuations,” Peter Jankovskis, Oakbrook Investments LLC’s co-chief investment officer, said by phone. “It does provide a note of caution as we continue to see the market surging higher and higher.”

Read more: Wall Street Warnings Grow Louder for Investors Defying Virus

The S&P 500 closed at an all-time high Thursday amid a rebound from last week’s slide that wiped out gains for the year. The prevailing tendency to buy the dip has prompted strategists at Citigroup Inc. and JPMorgan Chase & Co. to urge investors not to chase the rally.

Scientists solve structure enabling cyanobacteria to thrive in low light

Scientists have determined the structure of the protein complex that gives cyanobacteria their unique ability to convert weak, filtered sunlight into useable energy. Their findings could one day be used to engineer crops that thrive under low-light conditions.

Tiny photosynthetic organisms that live virtually everywhere on earth, cyanobacteria helped to create an oxygen-rich atmosphere on earth and continue to provide us with much of the oxygen that we need to survive.

“When cyanobacteria live in low-light conditions, such as beneath a pond surface or under the leaf litter on a forest floor, some are able to switch from using the visible light that is most conducive to their growth and photosynthetic activities to harvesting the weaker, far-red sunlight that filters down to them,” said Donald Bryant, Ernest C. Pollard Professor of Biotechnology, Penn State. “This novel ability gives cyanobacteria an adaptive advantage over other organisms and is part of why they are responsible for 50 percent of all photosynthetic activity on the planet.”

In its study, the team, which included researchers at Arizona State University’s Biodesign Center for Applied Structural Discovery, investigated Fischerella thermalis, a terrestrial cyanobacterium previously used as a model organism for the study of photosynthesis. Like all species of cyanobacteria, F. thermalis is rich in chlorophyll, the pigment that is responsible for absorbing light. According to Bryant, recent research has suggested that F. thermalis’s usual complement of chlorophyll, called chlorophyll a, is partially replaced under far-red light conditions with a closely related, yet chemically distinct, form of the molecule, known as chlorophyll f.

“So far we have only been able to speculate about how cyanobacteria make the switch to using chlorophyll f because no structural information about the photosynthetic machinery involved has been available for us to see what is going on,” he said.

To understand the phenomenon, Bryant and his colleagues used cryogenic electron microscopy (Cryo-EM) to solve the structure of F. thermalis’s photosystem I, one of the two protein complexes responsible for photosynthesis that occur in all photosynthetic organisms. Cryo-EM can determine biomolecular structures with near-atomic scale resolution. Using the method, the researchers were able to observe the locations of chlorophyll f molecules present in F. thermalis. Specifically, the team identified four sites where these chlorophyll f molecules can bind and become functional.

“By synthesizing and incorporating around 8% chlorophyll f into their photosystem I complexes, F. thermalis is able to carry out photosynthesis using far-red light of up to nearly 800 nanometers,” said Chris Gisriel, a postdoctoral associate at Yale University who participated in this research while he was a researcher at Arizona State University’s Biodesign Center for Applied Structural Discovery.

The team’s findings appear today (Feb. 5) in the journal Science Advances.

Bryant said that in previous research, he and his colleagues discovered that another protein in the cyanobacterial cells senses the wavelength of incoming light and activates the production of the modified photosynthetic apparatus when far-red light is predominant over visible light.

Gisriel added, “Research suggests that perhaps 25 percent of all cyanobacteria, including common soil organisms, have this capability. This would imply that a significant portion—about one-eighth—of the oxygen on earth comes from organisms with this adaptation.”

The team’s findings suggest exciting possibilities for future applications. For example, crops could potentially be tweaked to control their light absorption properties depending on ambient light conditions. In addition, two crops could potentially be grown together, with shorter crops like alfalfa, extracting far-red light from their shaded locations beneath taller crops, like corn. Such a strategy could produce twice the crop yield per unit area.

Supermoon will illuminate the night sky this weekend

February’s full moon marks the first supermoon of 2020. The Super Snow Moon is set to light up the night sky this weekend, visible to skywatchers provided the weather remains clear.

The Snow Moon, so named by Native American tribes for February’s wintery weather, will reach its peak at 2:33 a.m. ET on Sunday, February 9, according to NASA. It will appear full for about three days surrounding its peak, from Friday evening to Monday morning.

The Snow Moon is the most widely-used nickname for February’s full moon, but it has also been known as the Storm Moon, Hunger Moon, Magha Purnima, Magha Puja, the Mahamuni Pagoda Festival Moon, and the Chinese Lantern Festival Moon, NASA said.

It marks the first in a series of supermoons this year. A supermoon occurs when the full moon is closest to Earth in its elliptical orbit, making it appear brighter and larger than normal.

The next full moon, another supermoon, will occur on March 9. There will be two additional supermoons this April and May.

According to NASA, the first week of the month is also a good time to see the planet Mercury, which will be at its highest elevation above the horizon for the year for viewers in the Northern Hemisphere. Viewers can look to the western horizon during clear weather to spot the elusive planet.

On the morning of February 19, Mars will “disappear” behind the moon for about an hour — called an occultation. The spectacle will be visible at night for much of the western half of North America.

Cadillac’s hands-free Super Cruise system has a spotless driving record, GM says

The Cadillac Escalade is one of the most-popular chauffer-driven vehicles in the U.S., and the latest one has a part-time chauffer built-in. The 2021 edition of the full-size SUV will feature the latest version of Cadillac’s Super Cruise semi-autonomous driving aid when it goes on sale this summer.

The system uses cameras, radar, GPS and a database of 200,000 miles of highways that have been 3D-mapped using Lidar that allow it to steer a vehicle within a lane, avoid running into cars ahead of it and change lanes in traffic while the driver keeps their feet off the pedals and hands off the wheel.

Unlike competing systems such as Tesla’s Autopilot, Super Cruise uses a facial-recognition system to make sure the driver is paying attention to the road. If not, it will alert them to get their attention before it begins to disengage, by turning on the hazard lights and slowly bringing the vehicle to a stop. Tesla, Mercedes-Benz and other brands require a driver to keep touching the wheel to indicate that they are alert.

Cadillac President Steve Carlisle told Fox News Autos at the new Escalade unveiling in Hollywood that the automaker isn’t aware of any accidents that have occurred while it was in use. His statement was reiterated by GM President Mark Reuss during the company’s Capital Markets Day event at the New York Stock Exchange on Wednesday, when he said that Super Cruse has seen 5.2 million miles of “incident-free” operation in the real world since it first became available on the CT6 sedan in 2017.

That mileage figure is far less than the approximately 3 billion miles Tesla says its owners have driven using Autopilot, which is being investigated by NHTSA after several high-profile fatal accidents. A number of videos have also surfaced over the past few years that appear to show drivers who have fallen asleep with their hands on the steering wheel as their cars continue driving.

According to a report from Tesla in April 2019, the rate of accidents while Autopilot in use was approximately one per every 2.87 million miles driven, compared to one per 1.58 million miles without it. So far, there haven’t been any complaints filed with NHTSA regarding Super Cruise and it hasn’t been implicated in any accidents that have been reported on by the media. However, there was one odd incident the system may have been involved in.

Last May, video surfaced showing a man named Leonard Olsen standing out of the sunroof of a CT6 with his arms spread out as it drove along the I-4 highway near Lakeland, Fla. When police later tracked him down and arrested him on charges of reckless driving, he told them “the car drives itself and has a gigantic computer in it,” WTSP reported.

“I thought it would be a nice way to praise God for a minute, and I thought it would be nice at the time and that’s what I did,” Olsen said.

It was never officially determined if Super Cruise was in use or why it didn’t deactivate if it was, although it is also not known exactly how long Olsen was standing up.

Following the Escalade, Carlisle said Super Cruise will be available on every all-new model the brand introduces, including the upcoming CT5 and CT4 sedans.

Stocks Close Higher, But Weak Software Sector Drags Nasdaq’s Performance

The Nasdaq composite lagged noticeably Wednesday after software and internet groups struggled. Otherwise, the stock market was broadly higher.

Weakness in software, internet and Tesla (TSLA) shares dragged the composite, which added only 0.4%. Tesla plunged 17% as it comes off a heated advance over the past eight weeks.

Canaccord Genuity downgraded the stock to hold from buy and maintained a 750 price target. “Given the 3,000 per week China Model 3 production expectations in a country that remains on lockdown, we feel a reset of expectations in Q1 is likely and thus needs to be reflected in the valuation,” analyst Jed Dorsheimer wrote in a note to clients Wednesday.

Enterprise, security, database, gaming, design and financial software industry groups were in the bottom 15 of 197 groups in Wednesday’s trading. The iShares Expanded-Tech Software Sector ETF (IGV) fell 1.5% after making a record high in early trading. In the internet sector, Snap (SNAP) plummeted nearly 15% after the parent of Snapchat social media apps gave a weak sales outlook.

The S&P 500 rose 1.1%. The Dow Jones Industrial Average climbed 1.7%. Volume rose, according to unconfirmed figures. Advancing stocks led decliners by a 3-1 ratio on the NYSE and by 12-to-5 on the Nasdaq.

Dow component Home Depot (HD) cleared the 236.63 buy point of a cup-with-handle base, although volume was about half its average. The relative strength line is lagging, which is another problem for this breakout. Home Depot was added to IBD Swing Trader, which is looking for a short-term gain on the home improvement stock.

IBD 50 Underperforms Stock Market

But the IBD 50 lagged sharply, as more than half the stocks declined. Innovator IBD 50 ETF (FFTY) reversed lower to a loss of about 1%. Three components were mainly responsible for the underperformance.

Paylocity (PCTY) and Boot Barn (BOOT) plunged roughly 9% each after both companies reported earnings. Paylocity beat views, but posted weaker-than-expected margins. Its sell-off contributed to the weakness in software stocks today. Paylocity shares are heading toward a test of the 10-week moving average. Boot Barn missed profit estimates and gave a weak outlook. The footwear retailer gapped to its 200-day moving average, where it bounced.

Volatile InMode (INMD) tumbled 9%. The cosmetic surgery equipment maker continues to form a cup-with-handle base.

Breakouts In Today’s Stock Market

Intuit (INTU) tried to break out past the 293.10 buy point of a cup-with-handle base, but reversed lower. PennyMac Financial Services (PFSI) broke out of a flat base, rising above the 34.84 buy point in heavy volume.

Emergent BioSolutions (EBS) broke out of a cup-with-handle base, but volume was only average. The company makes an anthrax vaccine and specializes in treatments for public health hazards.

Crown Holdings (CCK) leapt past the 77.33 buy point of another cup with handle. Volume was heavy after the aluminum-can manufacturer beat profit views.

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