Stocks end lower as investors await kick off of big bank earnings
The major averages closed lower 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. In addition to banks' reports, the March Consumer Price Index due tomorrow may be another key for equities with investors remaining focused on inflation.
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) jumped 16% 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." Several Wall Street analysts spun the news as a positive, stating that it clears an overhang from the stock to have the matter settled.
Uber (UBER) shares were 3% 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.
Meanwhile, shares of Nvidia (NVDA) rose 5.6% after the company announced a next-generation data processing unit, the BlueField-3 DPU, and announced its first data center CPU for "the most complex AI and high performance computing workloads." In addition, the company said its first quarter revenue is trending above its prior guidance of $5.3B, plus or minus 2%. Shares of AMD (AMD) and Intel (INTC) slipped a respective 5% and 4.2% after Nvidia's data center CPU announcement.
Additionally, GameStop (GME) shares dropped 10.9% after Reuters reported that the video game retailer is looking for a new Chief Executive to replace George Sherman as it transitions from a brick-and-mortar company to an e-commerce one.
MAJOR MOVERS: Among the noteworthy gainers was Riot Blockhain (RIOT), which rose 3.8% after announcing that it produced 187 bitcoin in March. Also higher was Signet Jewelers (SIG), which gained 8% after raising its Q1 and FY22 revenue guidance.
Among the notable losers was iRhythm (IRTC), which declined 39.5% after announcing Medicare administrative contractor Novitas Solutions published updated reimbursement rates. Also lower was Aphria (APHA), which fell 14.2% after reporting quarterly results.
INDEXES: The Dow fell 55.20, or 0.16%, to 33,745.40, the Nasdaq lost 50.19, or 0.36%, to 13,850.00, and the S&P 500 declined 0.81, or 0.02%, to 4,127.99.