Hot Stocks: Online retailers rally; NFLX, SPOT jump on upgrade; K downgrade; MKC hits high; APPH sets low
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Building on a rebound that began late last week, U.S. stocks recorded another day of strong gains on Monday. The Nasdaq led the rally, notching its second consecutive 3% advance. Meanwhile, the S&P 500 rose almost 2%.
The strong performance recovered a portion of the losses posted earlier this month, fronted by some of the beaten-down tech and speculative names that led the recent retreat. This snap-back included online retail stocks, which rallied ahead of earnings from Amazon (NASDAQ:AMZN) later this week.
Fiverr International (NYSE:FVRR), Hour Loop (NASDAQ:HOUR), ThredUp (NASDAQ:TDUP), Overstock.com (NASDAQ:OSTK) and Etsy (NASDAQ:ETSY) all finished sharply higher.
Netflix (NASDAQ:NFLX) and Spotify (NYSE:SPOT) also contributed to in the overall rally. Shares of the subscription services posted double-digit percentage gains following upgrades from Citi.
At the same time, McCormick (NYSE:MKC) added to gains it saw last week following its quarterly report. The latest leg up took the stock to a fresh 52-week high.
Turning to some of the laggards on the session, Kellogg (NYSE:K) came under pressure following a bearish analyst note. Meanwhile, AppHarvest (NASDAQ:APPH) warned of a massive loss for fiscal 2021, sending its shares reeling to a new 52-week low.
Sector In Focus
Internet retail stocks took advantage of a friendly market to regain some of the losses they have posted since the start of the year. As industry heavyweight Amazon (AMZN) prepares to announce its quarterly report, more speculative players in the space got a bid amid renewed hope that recent selling has gotten overblown.
Fiverr International (FVRR) represented one of the leaders in the group, rising by nearly 18%. Hour Loop (HOUR) and ThredUp (TDUP) were other major winners, with gains of about 14% and 12%, respectively.
Along with the long list of startups in the space, a couple of old names in the sector saw strength as well. Overstock.com (OSTK) climbed 11%, while Etsy (ETSY) advanced almost 8%. 
Standout Gainer
Netflix (NFLX) and Spotify (SPOT) got a massive boost from a bullish turn from Citi, which raised its rating on both stocks. NFLX and SPOT each posted double-digit percentage gains on the news.
Citi upgraded both NFLX and SPOT to Buy ratings, saying that recent sell-offs for the subscriber-based stocks have created prices that don't reflect growth prospects for the companies.
Analyst Jason Bazinet said, "prevailing equity values don't assume material sub growth or improving subscriber economics beyond 2023."
NFLX rallied 11% to finish at $427.14. The stock had reached a 52-week low of $351.46 last week, driven lower by overall stock market dynamics and an earnings report that included disappointing subscriber figures.
Shares of the streaming video service have rallied off their lows amid a couple of high-profile indications of support. First, Bill Ackman's Pershing Square announced that it has purchased 3.1M shares of the stock. Then, co-CEO Reed Hastings bought an additional $20M stake.
For SPOT, the stock jumped more than 13% to finish at $196.26. Shares had reached a 52-week low of $164.41 late last week. 
The streaming audio service had been in the headlines recently for a controversy surrounding popular podcast host Joe Rogan, leading the company to add a disclaimer about COVID to avoid charges of spreading misinformation about vaccines and the pandemic in general.
Standout Loser
On a day that saw widespread buying, Kellogg (K) got left out of the general upswing, held back by a downgrade from BMO Capital. The stock fell nearly 3.5% on the session.
BMO Capital slashed its rating on the packaged food maker to Market Perform from Outperform, citing the dim prospects for a surprise beat when the company reports its quarterly results next week.
The company, which makes such cereal brands as Corn Flakes and Frosted Flakes, faces potentially soft sales and margin pressures related to supply constraints, analyst Kenneth Zaslow argued. A labor strike has also lowered the chances that the company will be able to beat expectations with its Q4 results, which are due out on Feb. 10.
Weighed down by the downgrade, K retreated $2.26 on Monday to close at $63. Shares had reached an eight-month high in mid-January but have fallen off since. The stock has dropped about 7% from that point.
Notable New High
Extending momentum fueled by last week's earnings report, McCormick (MKC) recorded another gain on Monday, rising 2% and setting a new 52-week high.
Last week, the spice maker announced a quarterly update that included better-than-expected results on both the top and bottom lines. The report featured a revenue figure of $1.73B -- a nearly 11% advance from the previous year.
The company also provided an upbeat forecast for fiscal 2022. MKC forecast adjusted EPS for the year between $3.17 and $3.22, topping the $3.09 predicted by analysts.
Encouraged by the earnings report, shares rallied nearly 7% last Thursday, the day after the figures were revealed. Another fractional advance followed on Friday. Monday saw the stock extend its gains, with MKC rising an additional 2% to close at $100.31.
The recent upswing has more than reversed a dip that took place headed into the earnings report. Monday's rally allowed the stock to reach a fresh intraday 52-week high of $100.38. All told, the stock has climbed about 19% in the past six months.
Notable New Low
AppHarvest (APPH) plunged about 12% following the release of disappointing preliminary results for its fiscal year. The slide took APPH to a fresh 52-week low.
The indoor farm operator revealed that it now expects to post a loss of $170M-$172.5M for fiscal 2021, a figure that includes nearly $60M in non-cash goodwill and intangible impairment charges for Q4. 
Meanwhile, the firm predicted a revenue figure between $8.9M and $9.1M. This represented an increase compared to its previous forecast of $7M-9M. It also represents an improvement compared to analysts' consensus of $8.3M.
Investors focused on the massive loss estimate rather than the revenue beat, sending the stock lower by 41 cents to close at $2.99. During the session, the stock also set a new intraday 52-week low of $2.62.
Shares have now lost more than 90% of their value over the past 12 months.

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