The major averages are mixed at midday as investors continue to bide their time ahead of several pieces of Federal Reserve news expected over the next few days. Tomorrow, the central bank is scheduled to release the minutes of its last rate setting meeting while Fed chair Jerome Powell will also head to Capitol Hill for the first of two days of policy to Congress. Trading has been choppy and may remain that way until the Fed events have passed as the market also readies for a pickup in earnings reporting that will begin next week.
ECONOMIC EVENTS: In the U.S., the JOLTS report showed job openings fell 49,000 to 7.32M in May.
TOP NEWS: In M&A news, Cisco (CSCO) announced it has agreed to acquire existing supplier Acacia Communications (ACIA) for $70 per share in cash, or for approximately $2.6B on a fully diluted basis, net of cash and marketable securities. Upon closing, Acacia employees will join Cisco's Optical Systems and Optics business within the networking and security business. After Cisco paid a 46% premium for Acacia, shares of several other optical components makers - including Applied Optoelectronics (AAOI), NeoPhotonics (NPTN), Ciena (CIEN) and Infinera (INFN) - are moving higher.
Shares of Pepsico (PEP) are fractionally lower after the snack and beverage maker reported better than expected second quarter sales and profits and backed its full-year earnings outlook. Of note, Pepsi CFO Hugh Johnston stated during the company's earnings call that organic revenue growth comparisons will get "meaningfully more challenging" in the second half of the year.
Social Capital Hedosophia (IPOA), the "blank check" company started by venture capitalist Chamath Palihapitiya, announced an agreement to combine with Virgin Galactic. The merged company will have an anticipated initial enterprise value of $1.5B and the current shareholders of SCH are expected to own up to approximately 49% of the combined company. Upon closing of the transaction, which is expected in the second half of 2019, VG will be introduced as "the first and only publicly traded commercial human spaceflight company," Virgin and SCH said.
Several large-cap pharmaceutical makers outperformed the broader market after a federal judge sided with drugmakers on Monday to block a Trump administration regulation requiring drug prices to be included in television ads, The Wall Street Journal's Stephanie Armour reports. The lawsuit was brought by Merck (MRK), Eli Lilly (LLY) and Amgen (AMGN).
MAJOR MOVERS: Among the noteworthy gainers was Square (SQ), which rose 6% after Raymond James analyst John Davis upgraded the stock to Market Perform from Underperform.
Also higher was Etsy (ETSY), which gained 4% after it said that it plans to make free shipping a "core part" of its shopping experience.
Among the notable losers was DaVita (DVA), which slid 8% after Politico reported that the White House will push for an overhaul of the kidney transplants market.
Also lower was Party City (PRTY), which fell 6% after JPMorgan analyst Tami Zakaria cut her price target on the shares to $8 from $11 and kept a Neutral rating on the stock.
INDEXES: Near midday, the Dow was down 2.26, or 0.08%, to 2,973.69, the Nasdaq was up 20.83, or 0.26%, to 8,119.21, and the S&P 500 was down 91.23, or 0.34%, to 26,714.91.