Stocks mixed at midday, on pace for strong weekly advance
The major averages are mixed at midday following gains yesterday that left the Dow and S&P 500 at record highs. Today's robust housing starts report adds to the upbeat picture of the U.S. economy presented by yesterday's strong data on retail sales and unemployment claims.
ECONOMIC EVENTS: In the U.S., housing starts rose 19.4% to a 1.74M rate in March, which was much stronger than expected, while March building permits bounced 2.7% to a 1.77M rate. The University of Michigan consumer sentiment survey reading increased 1.6 points to 86.5 in the preliminary April report.
TOP NEWS: Bank earnings continue to be in focus as Morgan Stanley (MS) reported better than expected results for the first quarter, with the company saying on its quarterly call that the quarter was marked by "numerous performance records." Of note, the lender said that its losses related to the Archegos exit was "money well spent."
Morgan Stanley wasn't alone when it came to bank earnings this morning, with Bank of New York Mellon (BK), Citizens Financial (CFG), and State Street (STT) all reporting upbeat quarterly earnings and revenue. Despite the results, all three banks' shares were trading flat to lower near noon, with State Street slipping over 6%.
In non-earnings news, Alexion Pharmaceuticals (ALXN) shares rose 4% after AstraZeneca's (AZN) proposed acquisition of the company "achieved an important step toward completion," having cleared U.S. Federal Trade Commission review. "The announcement follows competition clearances in Canada, Brazil, Russia and other countries globally, with a full list available on astrazeneca.com. Additional global regulatory clearances are pending, including but not limited to the UK, EU and Japan," AstraZeneca added.
On the COVID-19 front, Bloomberg reported last night that CDC advisers are tentatively set to reconvene late next week to resume their talks of how to respond to a rare side effect of Johnson & Johnson's (JNJ) COVID-19 vaccine. The Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices will likely meet Thursday or Friday of next week, chairman Jose Romero told Bloomberg. Meanwhile, The Wall Street Journal reported that J&J reached out privately to rivals producing COVID-19 vaccines to ask them to join an effort to study the risks of blood clots and to speak about safety. According to people familiar with the matter, AstraZeneca (AZN) was interested in joining forces to investigate the safety issue and communicate vaccine benefits and risks, but Pfizer and Moderna didn't see the need for group action, the WSJ report said.
MAJOR MOVERS: Among the noteworthy gainers was Lattice Semiconductor (LSCC), which rose 11% after it was named to join the S&P 400. Also higher were PPG Industries (PPG) and Alcoa (AA), which gained a respective 11% and 8% after reporting quarterly results.
Among the notable losers was Editas Medicine (EDIT), which declined 16% after Goldman Sachs analyst Madhu Kumar initiated coverage with a Sell rating and $20 price target. Also lower was Splunk (SPLK), which fell 8% after announcing chief technology officer Tim Tully will be resigning from the company in May.
INDEXES: Near midday, the Dow was up 88.15, or 0.26%, to 34,124.14, the Nasdaq was down 13.85, or 0.10%, to 14,024.92, and the S&P 500 was up 5.54, or 0.13%, to 4,175.96.