Stocks slide as investors sift through earnings reports
The major averages are weaker at midday as a fresh round of risk-off sentiment is rolling across equity markets globally amid a resurgence in worries over the virus that have caused jitters about the global recovery outlook. Profit taking also continues to feature following the record highs seen on Wall Street just last Friday.
ECONOMIC EVENTS: In the U.S., no economic data of note was reported.
TOP NEWS: IBM (IBM) shares rose 4% after the software and technology giant reported better than expected earnings and revenue for the first quarter, with Cloud & Cognitive Software revenue rising 3.8% year-over-year in the quarter. Looking ahead, the company said it expects fiscal 2021 revenue growth based on mid-April 2021 foreign exchange rates, adding that second quarter analyst estimates for revenue look "reasonable." Analysts expect IBM to report Q2 revenue of $18.23B.
Shares of Johnson & Johnson (JNJ) were 3% higher near noon after the company reported better than expected Q1 results, raised its fiscal 2021 earnings and sales guidance, and raised its quarterly dividend by 5%. Meanwhile, the European Medicines Agency's safety committee said that a blood clot warnings should be added to J&J's COVID-19 vaccine, adding that the "overall benefit-risk remains positive" for the single-dose vaccine.
Other big name companies reported quarterly results, including Travelers (TRV) and Procter & Gamble (PG), whose shares gained about 1% each after their reports. Meanwhile, United Airlines (UAL) shares slid 9% after the air carrier reported downbeat Q1 results.
In non-earnings news, Kansas City Southern (KSU) shares surged 16% higher after Canadian National (CNI) announced that it made a "superior proposal" to combine with KC in a cash-and-stock deal valued at $33.7B, or $325 per share. CN noted that it expects Kansas City Southern shareholders to receive the equivalent of $2.08 in annual dividends per share should the transaction happen as proposed. Previously Canadian Pacific Railway (CP) and Kansas City Southern announced that they have entered into a merger agreement, under which CP agreed to acquire KCS in a stock and cash transaction representing an enterprise value of approximately $29B.
MAJOR MOVERS: Among the noteworthy gainers was Nano Dimension (NNDM), which rose 8% after the company announced it has entered into a definitive agreement to acquire DeepCube. Also higher was Advance Auto Parts (AAP), which gained 1% after saying it expects comparable store sales to grow 22%-24% in Q1.
Among the notable losers was Syndax Pharmaceuticals (SNDX), which declined 28% after the company released updated data from the ongoing phase 1 AUGMENT-101 trial on SNDX-5613. Also lower was Futu Holdings (FUTU), which fell 18% after announcing an offering of 9.5M American depositary shares.
INDEXES: Near midday, the Dow was down 238.19, or 0.70%, to 33,839.44, the Nasdaq was down 126.05, or 0.91%, to 13,788.71, and the S&P 500 was down 28.20, or 0.68%, to 4,135.06.