Stocks end mixed at start of busy week for economic reports, earnings reports
The major averages had a mixed start to the week, and the month of May, as the S&P and Dow advanced and the Nasdaq declined. Upbeat data tracking a strong recovery in the U.S. economy continues to backstop equities, while prospects for more government spending also lend support. Berkshire Hathaway shares closed higher after the conglomerate reported results over the weekend and Warren Buffett announced his likely successor as head of the company.
ECONOMIC EVENTS: In the U.S., the Markit PMI reading slipped 0.1 tick to 60.5 in the final April print. The ISM manufacturing index dropped 4.0 points to 60.7 in April. Construction spending rebounded 0.2% in March, which was weaker than forecast.
TOP NEWS: Verizon (VZ) was in focus after the company entered into an agreement with Apollo Global Management (APO) under which funds managed by affiliates of Apollo will acquire Verizon Media for $5B. Verizon will retain a 10% stake in the company, which will be known as Yahoo at close of the transaction and continue to be led by CEO Guru Gowrappan.
In other M&A news, Gray Television (GTN) shares jumped 9.2% after the company agreed to acquire Meredith Corporation's (MDP) local media group for roughly $14.50 per share in cash, or $2.7B in total enterprise value after the spinoff of Meredith's National Media Group to the current Meredith shareholders. The transaction is expected to close in the fourth quarter of calendar 2021.
Class B shares of Berkshire Hathaway (BRK.B) were 1.7% higher after Warren Buffett confirmed to CNBC that Vice Chairman Greg Abel will succeed him as chairman and CEO of the firm. The news comes after Berkshire reported better than expected quarterly results over the weekend, with the company saying in its earnings release that it expects its buyback program to "continue indefinitely."
Elsewhere on the earnings front, Estee Lauder (EL) shares slumped 7.9% after the makeup company reported better than expected third quarter adjusted earnings and provided upbeat earnings guidance for fiscal 2021. Of note, CEO Fabrizio Freda said that "sales rose in every region" in the quarter.
Meanwhile, Amazon (AMZN) was in focus after the National Football League announced that Amazon Prime Video will be the exclusive home of Thursday Night Football beginning with the 2022 season.
MAJOR MOVERS: Among the noteworthy gainers was Ocugen (OCGN), which rose 23.8% after reporting new study results that found COVAXIN may be effective against three different COVID-19 variants. Also higher was BioNTech (BNTX), which gained 11% after the European Medicines Agency said it will start evaluating an application to extend the use of Pfizer (PFE) and BioNTech’s COVID-19 vaccine Comirnaty to include young people ages 12 to 15. Pfizer was up 3% after the news.
Among the notable losers was Vaxart (VXRT), which declined 25.6% after delaying the Phase II trial of VXA-CoV2-1 to mid-year 2021 from Q2, citing manufacturing issues. Also lower was Novavax (NVAX), which fell 17.7% after announcing the start of a pediatric expansion of its Phase 3 clinical trial for NVX-CoV2373, the company's vaccine candidate against COVID-19.
INDEXES: The Dow rose 238.38, or 0.70%, to 34,113.23, the Nasdaq lost 67.56, or 0.48%, to 13,895.12, and the S&P 500 advanced 11.49, or 0.27%, to 4,192.66.