Stocks have been modestly lower for most of the morning despite multiple media reports over the weekend indicating an imminent trade deal announcement may be coming from the U.S. and China, perhaps as soon as this week. However, at this point investors widely assume a pact will be reached in the near-term, with the big question remaining what will happen with the existing tariffs. Another pair of big banks reported earnings this morning, with both Citi (C) and Goldman Sachs (GS) posting better than expected earnings but lower than forecast revenues.
ECONOMIC EVENTS: In the U.S., the Empire State manufacturing index rebounded 6.4 points to 10.1 in April, which was better than the 8.0 reading that was expected.
TOP NEWS: Shares of Citigroup are down about 0.5% and Goldman Sachs has declined 3% following the quarterly reports released by the banks earlier today. Citi CEO Michael Corbat said his bank's earnings "reflect the progress we are making to improve our return on and return of capital," while Goldman Chairman and CEO David Solomon said he was pleased with his own firm's performance in the first quarter, "especially in the context of a muted start to the year."
Shares of Alliance Data (ADS) are under pressure, sliding 10% after the company announced it had entered into a definitive agreement to sell its Epsilon business to Publicis Groupe (PUBGY) for $4.4B in cash. Following the news, BMO Capital downgraded Alliance Data to Market Perform, while Stephens cut its rating for the stock to Underweight, with both arguing that the sale price and net proceeds were below market expectations.
In other M&A news, which was better received by shareholders, Waste Management (WM) announced a deal to acquire Advanced Disposal Services (ADSW) for $33.15 per share in cash, representing a total enterprise value of $4.9B when including approximately $1.9B of Advanced Disposal's net debt. Following the announcement, Advanced Disposal shares have jumped 19% while Waste Management shares are up 2% near noon.
MAJOR MOVERS: Among the noteworthy gainers was Electronics for Imaging (EFII), which rose 27% after it agreed to be acquired by an affiliate of Siris Capital in a deal valued at roughly $1.7B. Also higher was Gogo (GOGO), which gained 15% after it announced preliminary first quarter results.
Among the notable losers was Aphria (APHA), which slid 12% after entering into a series of transactions that will accelerate the expiry date to April 25 for the previously announced take-over bid by Green Growth Brands and will terminate the arrangements with GA Opportunities. Also lower was Clovis (CLVS), which fell 12% after discontinuing its Phase 2 trial evaluating rucaparib in recurrent, metastatic bladder cancer.
INDEXES: Near midday, the Dow was down 58.28, or 0.22%, to 26,354.02, the Nasdaq was up 27.07, or 0.34%, to 7,957.10, and the S&P 500 was down 6.88, or 0.24%, to 2,900.53.