Stocks were higher from the beginning of the session after Commerce Secretary Wilbur Ross reiterated Sunday that good progress was being made on a "phase one" deal with China and also suggested the U.S. may not need to impose auto tariffs on imported vehicles following "good conversations" with EU automakers. The encouraging comments on trade gave the market a good starting point ahead of another week heavy on corporate earnings reports, including tonight's report from ride-hailing giant Uber (UBER).
ECONOMIC EVENTS: In the U.S., factory orders dropped 0.6% in September.
TOP NEWS: McDonald's (MCD) shares slid 2.7% after the announcement last night that CEO Steve Easterbrook was let go due to a consensual relationship with an employee that violated the company's rules.
Shares of Under Armour (UAA) sunk 18.9% after the company reduced its revenue outlook for the fiscal year, citing "traffic challenges," and confirmed a federal probe of its accounting practices. On Sunday, The Wall Street Journal reported that both the Justice Department and the Securities and Exchange Commission are examining Under Armour's accounting practices, specifically looking at "whether the sportswear maker shifted sales from quarter to quarter to appear healthier." According to a Journal source, the Justice Department is conducting a criminal inquiry into the matter, and coordinating with civil investigators at the SEC.
In M&A news, Stryker (SYK) announced an agreement to acquire Wright Medical Group (WMGI) for $30.75 per share, or a total equity value of approximately $4B and a total enterprise value of approximately $5.4B. Pattern Energy Group (PEGI), meanwhile, announced an agreement to be bought by Canada Pension Plan Investment Board, or CPPIB, in an all-cash transaction for $26.75 per share, implying an enterprise value of approximately $6.1B, including net debt.
Meanwhile, Emerson Electric (EMR) shares closed 2% higher after Bloomberg reported that the company is expected to announce steps tomorrow targeted at reaching a truce with investors D.E. Shaw, which has pushed for a breakup of the manufacturer. Emerson is expected to name former Flowserve (FLS) CEO Mark Blinn to its board and aims to complete its review of operations by early 2020, according to Bloomberg.
MAJOR MOVERS: Among the noteworthy gainers was Karyopharm (KPTI), which rose 6.2% after it reported quarterly results and it said it expects topline data from the Phase 3 portion of its SEAL study in 2020. Also higher were shares of BioNTech (BNTX), which gained 14.8% after the stock was initiated with a Buy or equivalent rating at Canaccord, JPMorgan, Berenberg, SVB Leerink and UBS.
Among the notable losers was Aveo (AVEO), which dropped 36.7% after the FDA said that the company's current interim OS results from the TIVO-3 trial do not abrogate the FDA's concerns over detriment and that those results may worsen with final analysis at 263 events and that the median OS for tivozanib is worse than that of sorafenib. Also lower was Insperity (NSP), which fell 33.7% after reporting quarterly results.
INDEXES: The Dow rose 114.75, or 0.42%, to 27,462.11, the Nasdaq gained 46.80, or 0.56%, to 8,433.20, and the S&P 500 advanced 11.36, or 0.37%, to 3,078.27.