Stocks slide, lead lower by tech, as China worries continue
Stocks are declining to start the week, led lower by technology companies including Google parent Alphabet (GOOGL) and others who are restricting Huawei's access to their technology following recent action by the U.S. government. The moves against Huawei risk stoking the trade fight fire, as talks between the U.S. and China are said to have stalled following new tariffs imposed by both sides last week.
ECONOMIC EVENTS: In the U.S., the Chicago Fed's National Activity index fell to -0.45 in April after bouncing to 0.5 in March.
TOP NEWS: Alphabet's Google has suspended business with Huawei that requires the transfer of hardware and software products except those covered by open source licenses, meaning the chinese device maker will immediately lose access to updates to the Android operating system and the next version of its smartphones outside of China will also lose access to popular Google applications and services, according to Reuters. Chipmakers including Intel (INTC), Qualcomm (QCOM), Xilinx (XLNX), and Broadcom (AVGO) also have told employees they will not supply Huawei until further notice, Bloomberg reported, citing people familiar with the matter.
In M&A news, Federal Communications Commission Chairman Ajit Pai announced that he believes the merger of Sprint (S) and T-Mobile (TMUS) "is in the public interest" and he intends to recommend that the FCC approve it. The FCC still needs to draft an order to formally approve the combination and CNBC's David Faber reports that the concessions made may not be enough to resolve the antitrust concerns of the Department of Justice, but Sprint shares are still up 24% and T-Mobile shares have advanced 6% following the news.
Ford Motor (F) has begun notifying employees about job cuts and by the end of August the automaker expects to eliminate 7,000 salaried positions globally, or 10% of its worldwide salaried workforce, as part of its restructuring efforts, according to various media reports citing communications to impacted employees.
MAJOR MOVERS: Among the noteworthy gainers was Qiagen (QGEN), which rose 3% after it gained 510k clearance from the FDA for QIAstat-Dx in the U.S.
Also higher was The Medicines Co. (MDCO), which gained nearly 5% after announcing interim results from the ongoing ORION-3 open-label extension study, which showed that twice-a-year dosing with inclisiran sodium 300 mg resulted in consistent lowering of low density lipoprotein cholesterol by more than 50% with overall follow-up of up to three years.
Among the noteworthy losers was Dish (DISH), which slid 11% after it agreed to acquire EchoStar's (SATS) BSS Business in an all-stock transaction valued at $800M.
Pivotal Research analyst Jeffrey Wlodarczak downgraded Dish to Hold from Buy, citing the 22.9M share equity deal with sister company EchoStar and his view that the likely ultimate approval of the Sprint/T-Mobile deal "significantly pushes back the timing" for a potential Dish spectrum deal materially. EchoStar was 3% higher after the news. Also lower was Pinduoduo (PDD), which fell 10% after reporting quarterly results.
INDEXES: Near midday,
the Dow was down 29.17, or 0.11%, to 25,734.83
, the Nasdaq was down 72.78, or 0.93%, to 7,743.51
, and the S&P 500 was down 8.69, or 0.30%, to 2,850.84.