The major averages were mixed and little changed for much of the trading day amid cross currents including a post-earnings decline in IBM (IBM), a post-settlement rally in shares of Qualcomm (QCOM) and continued weakness across much of the healthcare sector blamed on worries about Medicare-for-All proposals being made by Democrats.
ECONOMIC EVENTS: In the U.S., the trade deficit surprised, narrowing 3.4% to $49.4B in February. Wholesale inventories rose 0.2% in February, with sales up a disappointing 0.3%. In Federal Reserve news, the Fed said in its latest Beige Book that economic activity expanded at a "slight-to-moderate pace" in March and early April, adding that employment continued to increase nationwide.
In China, Beijing reported GDP growth of 6.4% year-over-year in Q1, while industrial production rose 8.5% year-over-year in March. Retail sales for the month grew by 8.7% year-over-year in China.
In trade news, the Wall Street Journal reported that the U.S. and China have tentatively agreed to a timeline for the next round of trade negotiations.
TOP NEWS: Shares of Qualcomm (QCOM) rose for a second day in a row after the company and Apple (AAPL) announced an agreement yesterday to dismiss all litigation between them. Just hours after Apple's announcement, Intel (INTC) shared its intention to exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices.
Shares of Netflix (NFLX) were 1.3% lower after the company reported upside for Q1 and provided a mixed Q2 outlook last night. JPMorgan analyst Doug Anmuth raised his price target for Netflix to $450 from $435 and reiterates an Overweight rating on the shares following last night's Q1 results, stating that while the earnings report "may be controversial to some," mostly because of the light Q2 subscriber outlook, there's "much more to like here than not."
IBM (IBM) shares fell 4.15% after it reported better than expected earnings but lower than expected revenue. Of note, IBM backed its FY19 view for operating EPS of at least $13.90, which is roughly in-line with the consensus forecast.
Shares of T-Mobile (TMUS) and Sprint (S) were pressured after a Wall Street Journal report suggested their merger is unlikely to be approved by the Department of Justice as currently structured. Sprint chairman Marcelo Claure has since said the article is "not accurate," while T-Mobile CEO John Legere said via Twitter that the premise of the story is "simply untrue."
Meanwhile, Reuters reported that Amazon (AMZN) plans to close its domestic marketplace business in China by mid-July. While shoppers in China will no longer be able to purchase items from other third-party merchants in China, they reportedly will still be able to order goods from the U.S., U.K., Denmark, and Japan via Amazon's global store.
Uber (UBER) was in focus after it announced that it will bring Apple Pay to its Uber Eats service. Additionally, The Wall Street Journal reported that the company is close to a deal with a group including SoftBank (SFTBF), Toyota (TM), and Denso (DNZOY) to invest a total of $1B in Uber's self-driving car business.
MAJOR MOVERS: Among the noteworthy gainers was Smart & Final Stores (SFS), which jumped 20.2% after announcing that it has entered into a definitive merger agreement to be acquired by affiliates of Apollo Global (APO) for $6.50 per share in cash. Also higher were PepsiCo (PEP) and Morgan Stanley (MS), which gained a respective 3.8% and 2.6% after reporting quarterly results.
Among the notable losers was BNY Mellon (BK), which slid 9.5% after reporting lower than expected earnings and revenue for Q1. Also lower after reporting quarterly results was PolyOne (POL), which fell 6.5%.
INDEXES: The Dow fell 3.12, or 0.01%, to 26,449.5, the Nasdaq lost 4.15, or 0.05%, to 7,996.08, and the S&P 500 declined 6.61, or 0.23%, to 2,900.45.