Stocks end higher but pullback from best levels in afternoon slump
The major averages were up by nearly 2% across the board near noon amid optimism about the easing of virus-related lockdowns. While the averages pulled back in afternoon trading, the S&P still managed a gain of about 1% ahead of the next batch of earnings reports after the close.
ECONOMIC EVENTS: In U.S. data, the trade deficit widened 11.6% to $44.4B in March. Exports and imports both fell by slightly more than expected in the month, but the gap was exactly as estimated. Markit's services index was bumped down to 26.7 in the final April print. This is down from the 27.0 flash reading and down 13.1 points from March's 39.8 figure. The ISM-nonmanufacturing composite index slumped 10.7 points to 41.8 in April.
In COVID-19 news, New York Governor Andrew Cuomo reported 230 virus deaths in the state yesterday versus 226 deaths the day before, adding that "we have to have a better public health system than before."
TOP NEWS: Pfizer (PFE) and BioNTech (BNTX) announced that the first participants have been dosed in the U.S. in the Phase 1/2 clinical trial for the BNT162 vaccine program to prevent COVID-19. This U.S. trial is part of a global development program, and the dosing of the first cohort in Germany was completed last week, the companies noted.
L Brands (LB) announced a mutual agreement with Sycamore Partners to terminate their previously announced transaction that would have created a joint-venture used to spin Victoria's Secret and other assets into a separate, standalone company. As part of the announcement, L Brands said it remains committed to establishing Bath & Body Works as a pure-play public company and is taking the necessary steps to prepare the Victoria's Secret Lingerie, Victoria's Secret Beauty and PINK businesses to operate separately.
Shares of Wayfair (W) jumped 23.7% after the company reported better than expected revenue in the first quarter, telling investors that "millions of new shoppers have discovered Wayfair while they shelter in place at home, and we are seeing strong acceleration in new and repeat customer orders across almost all classes of goods and across all regions."
Shares of Hertz (HTZ) fell 16.3% after The Wall Street Journal reported that the company had tapped another restructuring adviser for its planned bankruptcy.
In M&A news, Alexion Pharmaceuticals (ALXN) announced an agreement to acquire Portola Pharmaceuticals (PTLA) at a price of $18 per share in cash. Alexion said that the deal "will add near-term diversification to Alexion's commercial portfolio and provides the opportunity to apply the company's demonstrated global commercial excellence to create long-term value for patients and shareholders."
Additionally, California is suing Uber (UBER) and Lyft (LYFT) for misclassifying drivers as non-employee contractors and denying them benefits like overtime, sick pay and workers compensation.
MAJOR MOVERS: Among the noteworthy gainers was Akebia (AKBA), which surged 38% after it reported positive results from its INNO2VATE Phase 3 program and reported quarterly results. Also higher after reporting quarterly results were Chegg (CHGG) and Trex (TREX), which gained a respective 32.1% and 9.3%.
Among the notable losers was Norwegian Cruise Line (NCLH), which dropped 22.6% after it announced a series of fundraising transactions and offerings. Also lower were Itron (ITRI) and Unum Group (UNM), which fell 16.1% and 10.7%, respectively, after reporting quarterly results.
INDEXES: The Dow rose 133.33, or 0.56%, to 23,883.09, the Nasdaq gained 98.41, or 1.13%, to 8,809.12, and the S&P 500 advanced 25.70, or 0.9%, to 2,868.44.