Dow Futures, Peloton, Penney, GameStop - 5 Things You Must Know Thursday

Stock futures fall, a day after the S&P 500 records its best session in three months; Peloton reports earnings; J.C. Penney is rescued by its mall landlords.

Here are five things you must know for Thursday, Sept. 10:

1. -- Stock Futures Point Lower

Stock futures were falling Thursday after Wall Street rebounded and the S&P 500 recorded its best day in three months.

Contracts linked to the Dow Jones Industrial Average fell 168 points, S&P 500 futures were down 20 points and Nasdaq futures declined 54 points.

The Dow gained 439 points, or 1.6%, to close at 27,940 on Wednesday, the S&P 500 rose 2.01% - its best day since June - and the Nasdaq rose 2.71%, ending a losing streak as tech stocks recovered.

Microsoft  (MSFT) - Get Report led the Dow higher. Analysts at Morgan Stanley boosted their price target on the tech giant, citing an expected dividend hike in the coming weeks.

"The liquidity-driven rally that saw stocks increase over 60% from 3/23 to 9/2 took a week off around Labor Day, but appears to be back from its vacation today," Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said Wednesday.

"As long as the buy-the-dips mentality remains foremost in investors’ minds - and it will unless they are severely punished for it - then the bull market is likely to continue," he added.

Further stimulus from Congress remains a question as Democrats and Republicans are at an impasse over a fifth coronavirus aid bill.

Republicans proposed a new, smaller relief package but a Senate vote this week is unlikely to pass as Democrats push for more sweeping aid.

2. -- Jobless Claims and Peloton Earnings Are Thursday Highlights

The economic calendar in the U.S. Thursday includes weekly Jobless Claims at 8:30 a.m. ET, the Producer Price Index for August at 8:30 a.m. and Oil Inventories for the week ended Sept. 4 at 11 a.m.

Earnings reports are expected Wednesday from Peloton Interactive  (PTON) - Get Report, Oracle  (ORCL) - Get Report and Chewy  (CHWY) - Get Report.

3. -- J.C. Penney Gets Rescued by Mall Owners 

J.C. Penney has been acquired out of bankruptcy by the department store chain's landlords, Simon Property  (SPG) - Get Report and Brookfield Property Partners  (BPY) - Get Report, in a $1.75 billion rescue deal.

The package includes a $300 million equity investment by the landlords, said attorney Joshua Sussberg of Kirkland & Ellis in a bankruptcy hearing Wednesday. The company’s bankruptcy lenders also tentatively have agreed to a $500 million financing. 

The financing also includes a commitment for a $2 billion asset-backed loan led by Wells Fargo.

J.C. Penney “will have approximately $1 billion at close of the transaction, subject of course to the working capital adjustment and the payments of costs and expenses associated with the transaction,” Sussberg said.

J.C. Penney filed for bankruptcy in May. The rescue deal would preserve about 70,000 jobs.

4. -- GameStop Sinks as Sales Drop Sharply

GameStop  (GME) - Get Report was sinking in premarket trading Thursday after posting a wider-than-expected loss in the second quarter and sales that fell nearly 27% and missed estimates.

The loss in the quarter was $1.71 a share vs. analysts' calls for a loss of $1.23. Sales were $942 million, missing forecasts of $1.02 billion. 

Comparable-store sales fell 12.7% in the quarter. Analysts expected same-store sales to decline 21.5%.

E-commerce sales for GameStop jumped 800%.

“[The] actions we are taking to optimize the core operations of our business by increasing efficiencies and creating a frictionless digital ecosystem to serve our customers, wherever and whenever they choose to shop, are enabling us to navigate the Covid-19 environment while positioning us well for the launch of the next generation of consoles," CEO George Sherman said in a statement.

Microsoft and Sony are expected to launch new consoles in November.

The stock declined 9.12% to $6.68 in premarket trading Thursday.

5. -- Zscaler's Earnings and Sales Outpace Estimates

Zscaler  (ZS) - Get Report dipped in premarket trading Thursday despite fiscal fourth-quarter earnings and sales that outpaced expectations.

For the quarter ended in July, the cybersecurity company posted adjusted earnings of 5 cents a share on revenue of $125.9 million, up 46% from a year earlier. Analysts had been expecting earnings of 3 cents a share on revenue of $118.6 million.

"Businesses are digitally transforming at a pace never seen before, and this is fueling adoption of the Zscaler Zero Trust Exchange platform and our strong fourth quarter and fiscal year results," said Zscaler CEO Jay Chaudhry in a statement. 

Zscaler's billings rose 55% year over year to $194.9 million, while analysts were calling for new orders value of $175.2 million. 

Zscaler guided for fiscal first-quarter adjusted earnings of 5 cents to 6 cents a share on revenue of between $131 million to $133 million.

The stock was down 0.89% in premarket trading to $133.