Hedge Fund Drama, Bond Yields Keep A Lid On Stocks

The major benchmarks are mixed midday, as rising bond yields once again weigh on the market. The 10-year Treasury yield earlier jumped 6 basis points to another 14-month high of 1.77% and is now holding at 1.74%. The Dow Jones Industrial Average (DJI) is down over 85 points, while the S&P 500 Index (SPX) sits with more modest losses. The Nasdaq Composite (IXIC) has pared most of its morning losses to claw briefly into the black this afternoon, though it was last seen sitting back below breakeven. 

Wall Street is also eyeing the forced billion-dollar liquidation from hedge fund Archegos, which put pressure on bank stocks yesterday, though media and bank stocks hit by the news look to be on the rebound today. A better-than-expected Consumer Confidence Index reading is helping to boost investor confidence a bit, however. The number surged to an annual high of 109.7 in March from 90.4 in February. 

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One stock seeing a surge in options volume today is Danimer Scientific Inc (NYSE: DNMR). So far, 9,125 calls and 2,348 puts have crossed the tape, which is seven times what's typically seen at this point. The May 45 call is the most popular, with new positions being opened there. DNMR is down 11.6% to trade at $32.55 at last look, after the company reported wider-than-expected fourth-quarter losses of 26 cents per share, eliciting a price-target cut from Jefferies to $62 from $66. However, the pullback appears to have been caught by long-term support at the 100-day moving average. Year-to-date, the stock is still up 38.4%. 


One of the top-performing stocks on the Nasdaq today is Aerospace name VirTra Inc (Nasdaq: VTSI). The stock was last seen up 52.7% to trade at $7.30, after the company reported strong fourth-quarter and 2020 results. Gapping to a fresh 17-year high of $9.26 earlier in the day, the equity is up 107.7% year-to-date. 

Meanwhile, Wave Life Sciences Ltd (Nasdaq: WVEis one of the worst performers so far, down 31.1% to trade at $4.88 at the last check. This bear gap toward penny stock territory comes after the company said it will stop clinical development of its WVE-120102 and WVE-120101 experimental Huntington's disease treatments. In response, no fewer than five analysts chimed in with price-target cuts, with the lowest from SVB Leerink and Mizuho to $7. Now trading at fresh record lows, the security is down 46.6% year-over-year. 

Disclaimer: Schaeffer's Investment Research ("SIR" or "we" or "us") is not registered as an investment adviser. SIR relies upon the "publishers' ...

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