Stocks flat as investors await kick off of big bank earnings
The major averages are mixed and little changed at midday on Monday after both the Dow and S&P 500 closed at record highs on Friday. Earning season kicks off in earnest later this week, with big banks leading the charge, as reports are due from JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS), Bank of America (BAC) and Citigroup (C) among several others. With investors remaining focused on inflation, the March Consumer Price Index, due Tuesday, may be key for equities.
ECONOMIC EVENTS: In the U.S., no economic data of note was reported this morning.
In an interview that aired Sunday on 60 Minutes, Fed Chair Jerome Powell reiterated that the central bank will continue to support the recovery until the job is done and stressed that a rate increase this year would be "highly unlikely." He added that it will be "a while" before the economy gets to the place where the Federal Funds rate can be lifted.
TOP NEWS: Shares of Nuance Communications (NUAN) are 16% higher near noon after the company announced an agreement to be acquired by Microsoft (MSFT) for $56 per share in an all-cash transaction valued at $19.7B, inclusive of Nuance's net debt. Upon closing, which is intended this calendar year, Microsoft expects Nuance's financials to be reported as part of Microsoft's Intelligent Cloud segment. Microsoft expects the acquisition to be minimally dilutive, by "less than 1%, in fiscal year 2022 and to be accretive in fiscal year 2023 to non-GAAP earnings per share based on its expected close timeframe, the company noted.
In other M&A news, DiaSorin SpA (DSRLF) announced a merger agreement to acquire Luminex (LMNX) for a price of $37 per share in an all-cash transaction that corresponds to an enterprise value of approximately $1.8B. In addition, Ingersoll Rand (IR) announced an agreement to sell its Club Car specialty vehicle technologies segment to the private equity firm Platinum Equity in an all-cash transaction valued at $1.68B.
Alibaba (BABA) announced that it has received the Administrative Penalty Decision issued by the State Administration for Market Regulation of the People's Republic of China and a penalty of $2.75B for the company "abusing its dominant position over rivals and merchants on its e-commerce platforms." Following the announcement of an anti-monopoly violation fine from China's regulators, several Wall Street analyst said they think the decision should lift "a major regulatory overhang" that has persisted on Alibaba shares and the stock has reacted by rising 9% in New York trading.
Uber (UBER) shares are 4% higher after the ridesharing and delivery company announced in a regulatory filing that in March 2021 total company Gross Bookings "reached the highest monthly level in the company's nearly 12-year history." The company's Mobility business posted its best month since March 2020, while the company's Delivery business "set another all-time record," Uber told investors.
MAJOR MOVERS: Among the noteworthy gainers was Riot Blockhain (RIOT), which rose 9% after announcing that it produced 187 bitcoin in March. Also higher was Signet Jewelers (SIG), which gained 6% after raising its Q1 and FY22 revenue guidance.
Among the notable losers was iRhythm (IRTC), which declined 37% after announcing Novitas Solutions published updated reimbursement rates applicable to the Current Procedural Terminology codes 93243 and 93247 at $103 and $115, respectively. Also lower wasa Aphria (APHA), which fell 14% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 32.83, or 0.10%, to 33,767.77, the Nasdaq was down 38.61, or 0.28%, to 13,861.58, and the S&P 500 was up 0.99, or 0.02%, to 4,129.79.