The major averages are weaker at midday, but well of their earlier lows, while stocks are sharply lower globally amid escalating fears over inflation. Those fears were fed overnight as China's PPI posted a larger than anticipated jump and the CPI notched a strong gain.
ECONOMIC EVENTS: In the U.S., the NFIB small business optimism index rose 1.6% to 99.8 in April. The JOLTS report showed job openings climbed 597,000 to 8.12M in March to hit a new record high.
TOP NEWS: In COVID-19 news, Pfizer (PFE) and BioNTech (BNTX) announced that the FDA has expanded the Emergency Use Authorization, or EUA, for their COVID-19 vaccine to include individuals 12 to 15 years of age. "This is the first COVID-19 vaccine authorized in the U.S. for use in this age group," the companies noted.
In M&A news, Paper Excellence announced an agreement to acquire all of the issued and outstanding shares of Domtar (UFS) common stock for $55.50 per share in cash. The purchase price represents a premium of approximately 37% to Domtar's closing share price on May 3, the last trading day prior to the Domtar's statement responding to media reports regarding such a potential business combination.
L Brands (LB) announced its board of directors has unanimously approved a plan to separate the company into two independent, public companies: Bath & Body Works and Victoria's Secret, which includes Victoria's Secret Lingerie, PINK and Victoria's Secret Beauty. The company, which also reported quarterly results, is seeing its shares slide nearly 5% at midday following the split news and earnings.
Ginkgo Bioworks and Soaring Eagle Acquisition (SRNG), a publicly traded special purpose acquisition company, announced a business combination agreement that will result in Ginkgo becoming a publicly-listed company. The transaction implies a pre-money equity valuation for Ginkgo, which designs custom organisms, of $15B, and is expected to provide up to $2.5B of gross cash proceeds. Ginkgo noted that it expects to generate $150M of revenue in 2021, representing approximately 96% growth from 2020.
In other SPAC news, Wynn Resorts (WYNN) announced that it is merging its online betting platform Wynn Interactive with Austerlitz Acquisition Corporation I (AUS) to create an independent public company. Upon closing of the proposed transaction, the combined company is expected to have an enterprise value of approximately $3.2B, will retain the Wynn Interactive name and relist its shares on the Nasdaq Stock Exchange under the new ticker symbol "WBET."
Palantir (PLTR) shares are up 7% near noon after the company reported better than expected Q1 results and provided upbeat revenue guidance for Q2.
In other earnings news, shares of Roblox (RBLX) jumped 16% after the video game company reported upbeat bookings and daily active users in its first ever quarterly report as a publicly traded entity. Following the results, Morgan Stanley analyst Brian Nowak raised his price target on the shares to $87 from $80, noting that engagement trends were "strong" in the quarter.
Meanwhile, Virgin Galactic (SPCE) shares are down 4% at midday, well off earlier lows, after the company reported downbeat quarterly results. Multiple analysts cut their price targets on the stock following the report, with Susquehanna's Charles Minervino lowering his estimates to reflect an adjustment to his R&D forecast and a reduction to the total number of commercial flights he is forecasting for 2022.
MAJOR MOVERS: Among the noteworthy gainers was Ferro (FOE), which rose 23% after announcing into a definitive agreement to be acquired by Prince International. Also higher were 3D Systems (DDD) and NortonLifeLock (NLOK), which gained a respective 20% and 8% after reporting quarterly results.
Among the notable losers was Nano-X Imaging (NNOX), which declined 12% after reporting quarterly results and after Muddy Waters Research reiterated its contention via Twitter that Nano-X "is a scam.” Also lower were The RealReal (REAL), Rackspace Technology (RXT) and Rekor Systems (REKR), which fell a respective 20%, 21%, and 26% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 483.27, or 1.39%, to 34,259.55, the Nasdaq was down 33.22, or 0.25%, to 13,368.63, and the S&P 500 was down 37.97, or 0.91%, to 4,150.46.