Facebook shares fall as UPS surges to record high

Yahoo Finance’s Jared Blikre reports on the day's trending tickers.

Video transcript

KARINA MITCHELL: Markets are really chasing another round of fresh record highs as big earnings continue to roll in. We'll take a look at the benchmarks right now. The Dow is up by 54 points. The S&P higher by 14. And the NASDAQ up by 19 points, as big tech is on deck after the bell, with names like Twitter and Amazon set to report. UPS and General Electric also having a good day. Day not so good for Facebook, however, Jared.

JARED BLIKRE: Let's take a look at the YFi Interactive, where we can chart the price action. And we can see it's now down 5%. And it's actually at a very key level. This is a year to date chart. You can still see holding on to 14% gains for the year, but well off of its high here. And it happens to be at a key technical level. This is a 200-day moving average. Not shown also VWAP, as Volume Weighted Average Price computed from the beginning of the year. You don't have to know what that is, just that a lot of investors are watching the price action at this [INAUDIBLE] go down and close a little bit lower, could portend more weakness.

Now, let's broaden this out to a two-year chart. And I want to get some reaction from the [INAUDIBLE]. The numbers basically came in not too far from what the Street was expecting. And that's kind of after that disaster of an earnings report, Snap, that led to another 5% drop in Facebook the other day.

Now, Goldman Sachs is raising the stock a buy. They have a price target, which they increased-- or excuse me, lowered down to 425 from 455. They're saying Facebook seems to have mitigated the ongoing headwinds better than feared. They're seeing increased share buyback as supportive of the stock at current levels, referring to a $50 billion buyback program that was announced yesterday. And this is in addition to a $14 billion worth of buybacks that we saw in the reporting quarter.

RBC Capital, they rated an outperform as well. Price target, they have moved down, though, as well, to 415 from 425. And they're saying with weak fourth quarter outflow now out of the way, a meaningful fog starts to lift for Facebook, saying the shares remain attractive at current valuations.

And something I mentioned 30 minutes ago, I just want to point out again. Nvidia is up 7 and 1/2%. Bank of America saying that Nvidia is going to benefit from all the capital expenditure and research and development costs that Facebook is putting into their new labs, which is a $10 billion program that they're going to break out separately from now on. So Nvidia benefiting from Facebook's capital outlays here. Guys.

ALEXIS CHRISTOFOROUS: All right, also have your eye on UPS, I know surging here to a record high profits, looking pretty sweet at UPS. And it's not even the holiday shopping season yet. Well, I guess it is-- a little bit.

JARED BLIKRE: Well, you know what? It is funny you mention that, Alexis, because in the report, they're saying people are already gearing up for the holidays and buying stuff ahead of schedule. UPS has pricing power. We all know the shipping situation. And let me just get to some of the Street reaction here, as I bring up a chart.

You can see, by the way, UPS really on a tear over a couple of weeks. This is over the last two years. I'm going to bring this down to a year to date. And you can see what's happened. The transports have really come alive, not just UPS over the last couple of weeks. We'll take a look at that in a second. But now, this is the first intraday record high that the stock has seen since May.

And after the earnings report, just a couple of notes here. This is from the chief executive officer, Carol Tomé, saying, I feel really good about our ability to manage through the labor cost inflation that many companies are dealing with today. And this is in response to the fact that 75% of their employees or 3/4 of them are under a five-year union labor agreement. And this is something that UPS has a leg up on competitors, saying, Bloomberg, that they are paying large wage increases to attract workers. And they seem to be able to adjust their prices to cover those costs.

So a lot of focus on margins here, but I want to go back to the YFi Interactive and just take a look at what's happened over the last month here. Now you can see UPS 16 and 1/2%. By the way, this is now the biggest stock in the Dow transports. This is what we're looking at here. Union Pacific, that is the second biggest stock. That's up 20% or thereabouts. FedEx up 5%.

And now I want to show the Dow transports because according to Dow theory, you want to have both the transports and the industrials agreeing. We know that the industrials are at a record high. And guess what? The transports set for the first record high since May. So we're going to keep an eye on that into the close and what it portends for the market at large.