Stocks began the week on an up note as investors brace for the start of the fourth quarter earnings season. Banks will be the focal point, with earnings from JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) all due tomorrow and other mega-cap financial peers coming shortly afterward. In addition to earnings, the week's big event will be the expected signing of the phase one trade deal between the U.S. and China.
ECONOMIC EVENTS: In the U.S., the Treasury reported a $13.3B budget deficit for December, which is little changed versus the $13.5B shortfall in December 2018. Meanwhile, CNBC reported that the U.S. will remove China from a list of countries considered currency manipulators ahead of the signing of a "phase one" trade deal.
TOP NEWS: Boeing (BA) announced that David Calhoun today assumed the role of president and chief executive officer. Calhoun said, "I'm honored to lead the talented people of Boeing as we face our challenges. Working together, we will strengthen our safety culture, improve transparency and rebuild trust with our customers, regulators, suppliers and the flying public. With the strength of our team, I'm confident in the future of Boeing, including the 737 MAX."
In M&A news, Boeing suppliers Woodward (WWD) and Hexcel (HXL) announced a definitive agreement to combine in an all-stock merger of equals "to create a premier integrated systems provider serving the aerospace and industrial sectors."
In other deal news, Wesco (WCC) and Anixter (AXE) announced that their boards of directors have unanimously approved a definitive merger agreement under which Wesco will acquire Anixter in a transaction valued at approximately $4.5B. Anixter's prior agreement to be acquired by Clayton, Dubilier & Rice, has been terminated, following CD&R's waiver of its matching rights under the agreement.
A great number of biotech, pharmaceutical and medical appliance names were active as J.P. Morgan hosted its annual healthcare conference. Some of the winners from day one, in terms of stock performance on Monday, included Invitae (NVTA) and Baxter (BAX). Meanwhile, Abiomed (ABMD), Inogen (INGN), ViewRay (VRAY) and Illumina (ILMN) were some of the notable underperformers in the space.
Shares of Lululemon (LULU) were 4.4% higher after the athleisure wear maker raised its fourth quarter earnings and sales outlook, commenting that it is "excited by the momentum in our business over the holiday period with guests responding well to our innovative merchandise offerings."
Meanwhile, The Wall Street Journal reported that Kroger (KR) rival Albertsons is preparing to go public again, as the company expects to decide in coming weeks whether to proceed with an initial public offering that could value it around $19B.
MAJOR MOVERS: Among the noteworthy gainers was Primo Water (PRMW), which rose 25.4% after it agreed to be acquired by Cott Corp. (COT) for $14 per share in cash and stock. Cott shares were 3.4% lower after the news. Also higher was Teladoc (TDOC), which gained 12.7% after agreeing to acquire InTouch Health in a $600M deal.
Among the notable losers was ViewRay, which fell 23.9% after providing revenue guidance for Q4 and fiscal 2019. Also lower was Inogen, which dropped over 22% after providing downbeat Q4, fiscal 2019, and fiscal 2020 revenue guidance.
INDEXES: The Dow rose 83.28, or 0.29%, to 28,907.05, the Nasdaq gained 95.07, or 1.04%, to 9,273.93, and the S&P 500 advanced 22.78, or 0.70%, to 3,288.13.