On The Fly: Top stock stories for Thursday
Stocks spent the morning in positive ground following strong data on retail sales in November and a mega-merger announcement in the media industry. As progress on the Republican path toward tax reform took over the headlines again in the afternoon, the major averages slowly gave up their gains and fell into the red. A bit of late day improvement helped, though stock indexes still finished the day with minor losses. ECONOMIC EVENTS: In the U.S., import prices increased 0.7% and export prices were up 0.5% in November. Retail sales were reported to have increased 0.8% month-over-month in November, which was stronger than the 0.3% rise expected. Initial jobless claims dropped 11,000 to 225,000 in the second week of December. Markit's manufacturing PMI jumped 1.1 points to 55.0 in the preliminary print for December, which was better than expected. However, the firm's services PMI dove 1.4 points to 52.4 in the first look at December, marking the weakest print since September 2016. Business inventories dipped 0.1% in October with sales up 0.6%, both as expected. Additionally, the Federal Communications Commission voted to dismantle so-called "net neutrality" rules this afternoon. In Europe, the ECB left its key interest rates unchanged and said it will continue to make net asset purchases under the asset purchase program, at a monthly pace of EUR 30B, until the end of September 2018 or later if needed. Also, the Bank of England maintained its Bank Rate at 0.5% and kept its asset purchase plans unchanged. COMPANY NEWS: Disney (DIS) and 21st Century Fox (FOXA) confirmed this morning that they have entered into a definitive pact under which Disney will acquire 21st Century Fox, including the company's Film and Television studios, along with cable and international TV businesses, for approximately $52.4B in stock. As part of the deal, Fox will spin off Fox Broadcasting network and stations, Fox News, Fox Business, and several sports networks to its shareholders. The companies added that Disney chairman and chief executive officer Bob Iger will remain in both roles through the end of calendar year 2021. After the deal announcement, Class A shares of Fox finished the day 6.5% higher, while Disney shares added 2.75%... Teva (TEVA) surged 10% after the company confirmed a restructuring plan, under which it will cut its workforce by over 25% and reduce its cost base by $3B by the end of 2019. The company added that it intends to suspend its dividend as part of its efforts to reduce debt... Delta (DAL) shares were 3% higher after the airline held its investor day and provided a view on its profits in 2018. Also, Delta and Airbus (EADSY) announced they've agreed to terms for a 100 firm and 100 option order for Airbus 321neo, or new engine option, aircraft with deliveries starting in 2020... In M&A news, Reuters reported that Perrigo (PRGO) is preparing a non-binding offer for Merck KGaA's (MKGAY) $4.7B consumer health business ahead of the December 15 deadline. Bloomberg added that Mylan (MYL), Nestle (NSRGY) and Reckitt Benckiser (RBGLY) are also among the expected bidders. MAJOR MOVERS: Among the noteworthy gainers was Genomic Health (GHDX), which jumped 19% after Bloomberg reported that the company is exploring options after drawing takeover interest. Also higher was Snyder's-Lance (LNCE), which gained 13% after CNBC reported that the company is exploring a possible sale after an approach from Campbell Soup (CPB). Among the notable losers after reporting quarterly earnings were Pier 1 Imports (PIR) and Sanderson Farms (SAFM), which fell a respective 29.5% and 13%. Also lower was Valeant (VRX), which dropped 10.75% after JPMorgan analyst Chris Schott downgraded the stock to Underweight from Neutral. INDEXES: The Dow fell 76.77, or 0.31%, to 24,508.66, the Nasdaq lost 19.27, or 0.28%, to 6,856.53, and the S&P 500 declined 10.84, or 0.41%, to 2,652.01.