Stocks got off to a rocky start reflecting heightened tension between the U.S. and Saudi Arabia over the disappearance of journalist Jamal Khashoggi. In the second hour of trading the major averages pared their opening losses and moved into positive territory. The move across the flat line was the first of many as the market see-sawed, continuing the volatility it has experienced over the past couple of weeks. In the end, though, the market could not follow-up Friday's bounce back session with another day of gains. ECONOMIC EVENTS: In the U.S., retail sales undershot estimates, rising 0.1% in September, and falling 0.1% excluding autos. The Empire State index rebounded 2.1 ticks to 21.1 in October. Business inventories rose 0.5%, with sales up 0.5% too in August, as expected. The Treasury Department estimated that the budget deficit for fiscal year 2018 grew 17% to $779B, hitting its highest level since 2012. COMPANY NEWS: Bank of America (BAC) reported better than expected third quarter results, with CEO Brian Moynihan touting the bank having delivered "the highest quarterly pre-tax earnings" in the company's history... Sears (SHLD) and certain of its subsidiaries filed voluntary petitions for Chapter 11 bankruptcy relief and announced that Edward Lampert has stepped down from his role as CEO of the company, effective immediately... In M&A news, Harris Corporation (HRS) and L3 Technologies (LLL) announced a deal to combine in an all stock merger of equals. L3 shareholders will receive a fixed exchange ratio of 1.30 shares of Harris common stock for each share of L3 common stock and upon completion of the merger, Harris shareholders will own approximately 54% and L3 shareholders will own approximately 46% of the combined company... Top executives from BlackRock (BLK) and Blackstone (BX) will no longer attend a Saudi investor conference, joining JPMorgan's (JPM) CEO and Ford's (F) chairman in pulling out of the event following the disappearance of a Saudi journalist... Meanwhile, Bloomberg reported that Walmart (WMT) is seeking to create an online store that would sell other companies' video streaming services through Vudu. MAJOR MOVERS: Among the noteworthy gainers was Cambium Learning (ABCD), which rose 19% after it agreed to be acquired by Veritas Capital. Also higher was Canopy Growth (CGC), which gained 14% after it agreed to acquire the assets of Colorado-based hemp company Ebbu. The move higher in Canopy, and other cannabis stocks such as Tilray (TLRY) and Cronos Group (CRON), also comes ahead of Canada becoming the second country in the world to legalize cannabis on Wednesday. Among the notable losers was Nutrisystem (NTRI), which fell 11% after DA Davidson analyst Linda Bolton Weiser downgraded the stock to Underperform from Neutral. Also lower was Occidental Petroleum (OXY), which slid 6% after confirming it will no longer pursue the extension of the Idd El-Sharghi North Dome offshore field in Qatar INDEXES: The Dow fell 89.44, or 0.35%, to 25,250.55, the Nasdaq lost 66.15, or 0.88%, to 7,430.74, and the S&P 500 declined 16.34, or 0.59%, to 2,750.79.
