Skip to Content
Midday Market Update

Stocks Mixed ahead of Brexit Vote

Mentioned: , , ,

U.S. Market
U.S. stocks were mixed midday Wednesday, as polls indicated that the vote on whether the United Kingdom will vote to remain a member of the European Union were too close to call

At midday the Dow was down 0.1%, while the S&P 500 and the Nasdaq were each up about 0.1%.

Stocks on the Move
Shares of  FedEx Corp (FDX) () were down 4.1% after the company said it would increase capital spending for the next fiscal year and offered a cautious outlook. Morningstar sector director Keith Schoonmaker writes that the company's fourth quarter was "eventful and profitable"and notes the favorable resolution of a legal case concerning pharmaceutical shipments and a successful close on the TNT acquisition. Schoonmaker says he will be incorporating the annual performance into our valuation model, and anticipates  a modest upward adjustment (less than 10%) to our fair value estimate

 Adobe Systems Inc (ADBE) shares fell 4.7% after the company posted mixed results, with better-than-expected earnings for its latest quarter, but disappointing full-year guidance. Nonetheless, Morningstar equity analyst Rodney Nelson  writes that the second-quarter results were in line with our expectations, as the firm continues to deliver on its cloud strategy across both its creative and marketing verticals. Nelson says he plans to maintain Adobe's wide moat rating, as well as our $104 fair value estimate.

We are raising our fair value estimate for  SolarCity (SCTY) to $35 per share from $20 per share after  Tesla Motors (TSLA) proposed acquiring SolarCity in an all-stock transaction.  Our no-moat and stable moat trend for SolarCity remain unchanged, said Morningstar's Andrew Bischof. However, we plan to  reduce our Tesla fair value estimate to about $259, says David Whiston. This reflects our math of Tesla issuing nearly 12.9 million shares of stock (about 8.8% dilution) at our preannouncement fair value estimate of $269 partially offset by Tesla acquiring SolarCity, which had a stand-alone fair value estimate of $20. Share of Tesla were down 9% at midday, while shares of SolarCity were up 5.1%.

Foreign Markets
European stocks were slightly higher today. The FTSE 100 and Germany's DAX were up 0.6%, and the Paris CAC gained 0.3%.

Asian markets were mixed. The Shanghai Composite gained 1%, the Nikkei 225 shed 0.6%, while the Hang Seng was up 0.6%. 

Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.