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Stocks Gain, SEC GameStop Report, Rent The Runway IPO - 5 Things You Must Know

Stocks edge higher ahead of earnings; SEC says GameStop surge powered by believers; FDA set to approve "mix & match' COVID boosters; DraftKings faces Entain bid deadline and Rent the Runway seeks $1.3 billion valuation in Nasdaq IPO.

Here are five things you must know for Tuesday, October 19:

1. -- Stocks Futures Gain Ahead of Earnings Slate

U.S. equity futures edged higher Tuesday, following on from a solid tech-lead rally last night, as investors track a pullback in Treasury bond yields ahead of a busy slate of corporate earnings later in the session.

Dow components Johnson & Johnson  (JNJ) - Get Johnson & Johnson (JNJ) Report, Procter & Gamble  (PG) - Get Procter & Gamble Company Report and Travelers Companies  (TRV) - Get Travelers Companies, Inc. Report will report third quarter earnings prior to the start of trading Tuesday, with Netflix  (NFLX) - Get Netflix, Inc. (NFLX) Report unofficially kicking-off the start of big tech reports after the closing bell.

With investors looking for looking for collective S&P 500 profits to rise 32% from last year to $421.4 billion, with a solid 22.3% growth rate to follow in the fourth quarter, earnings strength has underpinned markets at time when inflation pressures remain stubbornly imbedded and economic growth looks set to slow over the final months of the year.

A modest pullback in 10-year Treasury note yields, which traded at 1.584% overnight, and a weaker U.S. dollar are also providing early support Tuesday, with futures contracts tied to the Dow Jones Industrial Average indicating a 100 point opening bell gain.

Futures tied to the S&P 500, meanwhile, are priced for a coming off its best week since July, are priced for a 15 point advance and those linked to the Nasdaq Composite are indicating a 45 point move to the upside at the start of trading.

2. -- SEC Says GameStop Surge Powered By Sentiment, Not Short Sellers

 GameStop  (GME) - Get GameStop Corp. Class A Report, the money-losing video game retailer at the epicenter of a so-called 'meme stock' revolution earlier this year, earned its meteoric rise as a result of positive investor sentiment, and not short-sellers, the Securities and Exchange Commission said late Monday.

In a report focused on the reasons behind January's meme-stock rally, which pushed GameStop's to as high as $23 billion, the SEC said that while short-sellers were active in betting against the stock, its rise was powered by investors who believe in the company -- and their use of 'game like' trading apps -- by professional traders scrambling to cover their short positions. 

"Whether driven by a desire to squeeze short sellers and thus to profit from the resultant rise in price, or by belief in the fundamentals of GameStop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock," the SEC said.  

The report did not, however, address issues related to alleged market manipulation on social media websites or whether pressure was applied to online trading firms such as Robinhood to restrict access to certain stocks during the height of the meme-trading frenzy.

3. -- FDA Set To Approve 'Mix & Match' COVID Boosters

The U.S. Food & Drug Administration is ready to approve the 'mixing and matching' of COVID vaccines when Americans received booster shots this winter, the New York Times reported late Monday.

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 The FDA is likely to indicate a preference for matching the booster shot with the original vaccine, but a study that noted recipients of the Johnson & Johnson vaccine experienced a higher levels of antibodies from a Moderna MRNA booster could allow the FDA to widen the choice for vaccinated Americans and lift demand for shots made by Moderna and Pfizer PFE.  

The FDA's Vaccines and Related Biological Products Advisory Committee, which has already given the nod for boosters made by Pfizer and Moderna, will meet Thursday to make a formal recommendation Thursday.

Moderna shares were marked 0.95% higher in pre-market trading Tuesday at $338.00 each, while Pfizer edged 0.5% higher to $41.51 each.

4. -- DraftKings Faces Entain Bid Deadline

DraftKings  (DKNG) - Get DraftKings Inc. (DKNG) Report shares nudged higher in pre-market trading Tuesday as the sports betting group faced a 'put up or shut up' deadline on its $22 billion approach for British bookmaker Entain.

United U.K. takeover rules, DraftKings must formalize its $22.4 billion bid for Entain, which operates the Coral and Ladbrokes betting shop and has a U.S. joint venture with MGM Resorts International  (MGM) - Get MGM Resorts International (MGM) Report, by the close of trading today or walk away from the company for at least six months. 

MGM, which made an $11 billion approach for Entain earlier this year, has insisted its joint-venture prohibits DraftKings from accessing the London-based group's U.S. operations. 

DraftKings shares were marked 0.3% higher in pre-market trading to indicate an opening bell price of $48.80 each.

5. -- Rent The Runway Sees $1.3 Billion Valuation From IPO

Rent The Runway, a New York-based fashion group that allows its members to rent high-end clothing for a short period of time, will go public in a $1.3 billion listing later this year.

The company will sell around 15 million shares, it said in a Securities and Exchange Commission filing late Monday, priced between $18 and $21 each in an initial public offering that will raise around $315 million and value the group at around $1.3 billion.

Earlier this month, Rent the Runway said it generated revenues of $157.5 million last year, but posted a net loss of $171.1 million as it ramped-up operations and took on higher costs amid the COVID pandemic. 

It's shares will trade on the Nasdaq under the ticker symbol RENT.