Stocks slip after Trump threatens further tariffs on Chinese goods
Stocks were sharply lower to start the week after President Trump tweeted over the weekend that tariffs on Chinese goods coming into the U.S. would be increased on Friday as trade talks continue, "but too slowly, as they attempt to renegotiate." Following Trump's tariff threat, the major averages all feel over 1%, with the Nasdaq down about 2% at its worst levels, but they steadily recovered as the trading day wore on. The major averages finished much improved from their worst levels, with the Dow coming nearly all the way back to unchanged and the Nasdaq cutting its losses to under 0.5%.
ECONOMIC EVENTS: In trade news, CNBC reported that a Chinese delegation will travel to the U.S. for trade talks this week following President Donald Trump's latest tariff threat, but the country will now send a smaller delegation than the 100-person group initially planned.
TOP NEWS: Occidental Petroleum (OXY) announced what it described as a "revised and significantly enhanced superior proposal" to acquire Anadarko Petroleum (APC) for $76 per share, comprised of $59 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock. Anadarko will likely deem Occidental's revised takeover bid superior to Chevron's (CVX) by the end of today, starting the four-day match clock on Chevron's bid, according to CNBC's David Faber, citing people close the situation.
In other M&A news, shares of Sinclair Broadcast (SBGI) surged 34.5% after the company announced on Friday night that it had agreed to acquire 21 regional sports networks from Walt Disney (DIS) in a transaction that ascribes a total enterprise value to the RSNs equal to $10.6B, reflecting a purchase price of $9.6B after adjusting for minority equity interests. Additionally, Sinclair CEO Chris Ripley told Reuters in an interview that he would consider partnering with Amazon (AMZN) and other tech giants to offer live sports.
Over the weekend, Berkshire Hathaway's (BRK.A) Warren Buffett told reporters at his firm's annual meeting that Kraft Heinz's (KHC) auditor, PwC, has not signed off on the company's annual report, according to CNBC. This morning, Kraft Heinz said it has reached a determination to restate the company's consolidated financial statements and related disclosures for the years ended December 30, 2017 and December 31, 2016 as a result of the findings from a company investigation, which identified that several employees in the procurement area engaged in misconduct. The company has recorded adjustments to correct prior period misstatements that increase the total cost of products sold in prior financial periods, "which the company does not believe constitute a quantitatively material misstatement to any individual period," Kraft Heinz stated.
Meanwhile, Larry Robbins of Glenview Capital named 3M (MMM) and Chemours (CC) as short ideas during a presentation at the Sohn Conference. Following the comments, during which Robbins cited the companies' exposure to lawsuits involving the key ingredient in Scotchgard, 3M shares fell 1.2% while Chemours shares declined 7.5%.
MAJOR MOVERS: Among the noteworthy gainers was Aquantia (AQ), which surged 35.5% after it agreed to be acquired by Marvell (MRVL) for $13.25 per share in cash. Marvell shares were just over 1% lower after the news. Also higher was ImmunoGen (IMGN), which gained 14.6% after analysts from Cowen and H.C. Wainwright upgraded the stock following its Q1 earnings report.
Among the notable losers was Affiliated Managers (AMG), which slid 2.7% after reporting quarterly results, agreeing to acquire an equity interest in Garda Capital Partners, and announcing the departure of CEO Nathaniel Dalton. Also lower after reporting quarterly results was PetMed Express (PETS), which fell 9.2%.
INDEXES: The Dow fell 66.47, or 0.25%, to 26,438.48, the Nasdaq lost 40.71, or 0.5%, to 8,123.29, and the S&P 500 declined 13.17, or 0.45%, to 2,932.47.