Stocks were higher for most of the morning and the S&P 500 set a fresh life high today of 3282.99 before it and the other major averages pulled back and finished the day with losses. Despite the monthly jobs report being a bit disappointing, with the 145,000 job additions in December missing the consensus call for 160,000, momentum remains in place in the U.S. labor market and the major averages are still near record levels ahead of big banks kicking off earnings season next week.
ECONOMIC EVENTS: In the U.S., nonfarm payrolls increased 145,000 in December and the unemployment rate was steady at 3.5%. Average hourly earnings edged up 0.1% month-over-month, slowing year-over-year earnings growth to a 2.9% pace last month from the 3.1% rate reported for November. wholesale inventories declined -0.1% in November while sales surged 1.5%. The former is a little weaker than expected, while the latter is much stronger than forecast. In energy news, Baker Hughes reported that the U.S. rig count is down 15 rigs from last week to 781.
In other news, Bloomberg reported that U.S. intelligence and law enforcement are probing whether Russia is trying to undermine Joe Biden's campaign to challenge President Donald Trump in the 2020 election.
TOP NEWS: Boeing (BA) released a statement last night addressing employee messages provided to Congress and the Federal Aviation Administration that were released publicly at the encouragement of Chairman DeFazio and Chairman Wicker. Boeing said, "Some of these communications relate to the development and qualification of Boeing's MAX simulators in 2017 and 2018. These communications contain provocative language, and, in certain instances, raise questions about Boeing's interactions with the FAA in connection with the simulator qualification process. Having carefully reviewed the issue, we are confident that all of Boeing's MAX simulators are functioning effectively." Natalie Kitroeff of the New York Times noted that the messages included quotes such as "this airplane is designed by clowns, who are in turn supervised by monkeys." Meanwhile, Spirit AeroSystems (SPR) confirmed to media outlets that it plans to reduce 2,800 positions given the continued grounding of the Boeing 737 Max and "ongoing uncertainty regarding the timing of when production will resume."
Shares of GrubHub (GRUB) slid 6% after the company said it is not running a sale process, denying recent reports that had sent its stock upward. "We felt it was important to clarify that there is unequivocally no process in place to sell the company and there are currently no plans to do so. We have always consulted advisers about a broad range of issues, including potential acquisition opportunities -- that has not changed," a representative for the company told Bloomberg.
Shares of Six Flags (SIX) plunged 17.8% after the company reported lower North America attendance as well as "continued challenges" in China. Six Flags disclosed in a regulatory filing that the company now expects total revenue in the fourth quarter of 2019 to be less than prior year by $8M-$10M due to softer than expected season pass and membership sales, primarily during the holiday sales periods. Separately, the theme park operator said that given continued challenges in China, the development of Six Flags-branded parks has not progressed as expected and that Riverside Investment Group, its partner in China, defaulted on its payment obligations.
In M&A news, Eli Lilly (LLY) announced an agreement to acquire Dermira (DERM) for $18.75 per share, or approximately $1.1B, in an all-cash transaction. The deal will expand Lilly's immunology pipeline with the addition of lebrikizumab, which is in a Phase 3 clinical development program for the treatment of moderate-to-severe atopic dermatitis. Near noon, Dermira shares are trading above the deal price at $19.23 per share.
Meanwhile, Alphabet (GOOG) said in a regulatory filing that chief legal officer David Drummond will retire from the company on January 31, 2020. CNBC noted that Drummond is leaving the company amid a sexual misconduct scandal, as the company has faced numerous allegations of misconduct within its ranks in recent months.
In IPO news, mattress company Casper Sleep (CSPR) has filed for an initial public offering, seeking a listing on the New York Stock Exchange under the symbol "CSPR."
MAJOR MOVERS: Among the noteworthy gainers was Sorrento (SRNE), which surged 39.6% after it said it received a non-binding proposal from a private equity fund to acquire a majority or all of the issued and outstanding shares of the company for up to $7.00 per share. Also higher was Synnex (SNX), which jumped 12.8% after it reported better-than-expected quarterly results and announced a plan to separate into two publicly traded companies.
Among the notable losers was Portola Pharmaceuticals (PTLA), which plunged 40.3% after announcing preliminary Andexx net revenues for Q4. Also lower was Cryoport (CYRX), which fell 4.8% after it provided revenue guidance for the fourth quarter and fiscal 2019.
INDEXES: The Dow fell 133.13, or 0.46%, to 28,823.77, the Nasdaq lost 24.57, or 0.27%, to 9,178.86, and the S&P 500 declined 9.35, or 0.29%, to 3,265.35.