SoFi stock rises as Southwest Airlines and Deere & Co. shares slump

Yahoo Finance’s Emily McCormick reports on the day's trending tickers.

Video Transcript

JARED BLIKRE: But we want to get a quick check of the markets here where we had begun the day with some nice gains. We have given them all back. And on the Wi-Fi Interactive we're seeing the Dow off about 108 points, The S&P 500 down just under 1/3%, and the NASDAQ down 9 basis points. You can see the Russell 2k I'm circling right here is still holding on to some gains.

And if we take a look inside the NASDAQ 100, a mixed board here. Apple still holding onto gains of about half a percent, Amazon down 1.4%, Facebook off about 3/4 of a percent. But Tesla-- Tesla is up 1%. Still holding on to some gains there.

I want to check in on the sector action, and just a reminder, we got the bond market closed today, but we do see materials. That is the greatest gainer. That's up half a percent. Seeing some very small gains for real estate and tech. Tech about to flip into the red potentially. And then to the downside, it's utilities. That's off more than 1%. Communication services and financials that's down half a percent here.

And we want to check in on the travel space. We're going to get some more color on that in a second. But overall, more green than red, and nice to see that, by the way. Wynn Resorts up 4%, Avis Budget, CAR. That group is up about 2% today. Still looking at gains of 278% for the year. And we want to stick with the markets and bring in Yahoo Finance's Emily McCormick.

And I know, Emily, that you are looking at a number of trending tickers today, and top of the list is SoFi. And I believe it's on a Morgan Stanley upgrade. What's behind this?

EMILY MCCORMICK: Well, that's right, Jared. The newly public fintech company just got a bullish recommendation from analysts at Morgan Stanley. The firm initiating this stock with an overweight rating and a price target of $25. Now that target does imply upside of more than 50% compared to Friday's closing prices. And as we can see here on the screen, the stock definitely rallying this afternoon in the wake of that.

But just diving into this, note here, a lot of optimism reflected about SoFi's growth prospects. Now the analyst said that they expect the company's user base to double in the next two years to reach about 5.3 million, and Morgan Stanley analysts also said that the end of the government student loan referral program will help drive a surge in student loan volumes, which are, of course, one of the major areas of SoFi's core business.

Now I do want to highlight one key quote here from this note. Morgan Stanley analyst Betsy Graseck saying, quote, "Competition is rising among challenger fintechs for Gen Y and Z, but SoFi has a leg up given its roots in the hardest part of consumer finance lending along with a robust digital offering." So again, SoFi shares a really rising here in the wake of this bullish initiation. We're seeing that stock up nearly 12% this afternoon, Jared.

JARED BLIKRE: And we were just looking at our travel heat map where Southwest Airlines really sticking out down 3%. We know that they had about 2,000 cancelations over the weekend, a bunch more today. And this is after they've been trying to ramp up their staffing. It just seems kind of, like, a perfect storm of negative events here with Southwest. What are the details?

EMILY MCCORMICK: Well, a perfect storm is right, Jared. If we take a look here at the details of these disruptions, we're now in the fourth day of elevated cancelations and delays for Southwest. The company canceling about 355 flights today, and that's about 10% of its daily schedule after canceling more than 1,000 flights yesterday and more than 800 on Saturday.

Now Southwest did blame bad weather, especially in Florida, as well as air traffic control issues as being the main factors behind these cancelations. But the company has also been dealing with a number of other issues as well. Now, for one thing, the Southwest Airlines Pilots Association last week had filed a motion to temporarily block the airline's COVID-19 vaccine mandate.

That being said, the president of the union actually did say that the pilots did not contribute to the problems this weekend, even given the timing of that motion. But again, Southwest and a number of these major air carriers have been dealing with staffing shortages, and the airline does need a, quote, "Staffing cushion for unexpected disruptions." And that's a quote from Chief Operating Officer Mike Van de Ven of Southwest in a video to employees yesterday, according to a report from Bloomberg.

So as you were mentioning, Jared, really a perfect storm here for Southwest. That stock really underperforming against the other travel names down about 3%.

JARED BLIKRE: And they say that nothing runs like a deer, but some of its employees, specifically members of the UAW, may be running for a picket line as soon as October 13th. What are the details?

EMILY MCCORMICK: Well, that's right, Jared. And we are seeing shares of Deere under a bit of pressure today because of that United Auto Workers Union members overwhelmingly rejected a tentative six-year collective bargaining agreement with the company. That's coming after weeks of negotiations. And the union announced yesterday that 90% of its members rejected that offer, which would impact more than 10,000 workers across about a dozen plants across multiple US states for Deere and company.

Now this deal would have offered increased wages and benefits to these workers, but some of the workers who voted against this and voted to reject it were reportedly seeking more comprehensive health care changes, wage increases, and improvements to the retirement and pension plans. So as you were mentioning, Jared, the union has set a strike deadline for Wednesday at midnight.

Now a deal could conceivably be chalked up in the meantime ahead of that. And Deere did say that the company will continue operations as usual in the meantime. But we are seeing shares under pressure, again, because of some of these concerns, Jared.

JARED BLIKRE: And we thank you for that report. Yahoo Finance's Emily McCormick.