US stocks moved lower on Thursday following a report that the number of people affected by the coronavirus surged. Stocks were under pressure at the open but that was the lowest price for the trading session. A judge ordered Thursday a temporary block on the JEDI cloud contract, which was awarded to Microsoft, in response to a suit filed by Amazon. Tesla shares whipsawed initially declining but then surging following an announcement that the company was planning a second common stock offering. US CPI came out in line with expectations while jobless claims remained lower than expected. Sectors were mixed, driven lower by materials, defensive sectors such as utilities and consumer staples bucked the trend.
A Judge Put a Stay on Jedi Deal
A judge ordered a temporary block on the JEDI cloud contract, which was awarded to Microsoft, in response to a suit filed by Amazon. Amazon Web Services is instructed to earmark $42 million for any costs and damages that could be incurred in the event that the injunction. Amazon must file a notice with the courts indicating it has obtained the $42 million by February. 20.
Tesla Plan a Secondary Offering
Tesla plans a $2 billion common stock offering, to raise more capital. Shares of Tesla initially fell after the announcement, dropping as much as 6%. But the stock reversed those losses, climbing 6% in the middle of the day as investors cheered the move as a way to shore up its balance sheet and possibly further its expansion plans. Shares hit a high of $818 in intraday trading.
US CPI Edge Higher
The Labor Department reported that CPI in January edged up 0.1% after increasing 0.2% for three straight months. On a year over year basis in January, the CPI rose 2.5%, the biggest gain since October 2018, after advancing 2.3% in December. The consumer price index excluding food and energy rose 0.2% last month after edging up 0.1% in December. The core CPI was up by an unrounded 0.24% last month. In the 12 months through January, the core CPI increased 2.3%, rising by the same margin for four straight months.
Jobless Claims Remain Low
Initial claims rose 2,000 to 205,000 for the week ended February 8, according to the Labor Department. Claims fell in the prior week to 203,000, which was the lowest reading since November. Expectations were for claims to rise to 210,000 in the latest week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, was unchanged at 212,000 last week.