Stocks opened sharply lower as the trade war with China and the U.S. escalated to new heights. After imposing tariffs on each other last week, the U.S. threatened an additional $200B in tariffs, to which China said it would react in kind. The market saw its session lows early in trading and then drifted higher to cut its losses. Oil prices also fell ahead of the OPEC meeting at the end of the week. The price of crude fell 1.2% and closed just above $65 a barrel. ECONOMIC EVENTS: In the U.S., the report on housing starts beat estimates, with a big May gain for starts but a setback for permits. Starts were up 5.0% month-over-month to a 1.35M rate, while permits declined 4.6% from the prior month to an adjusted rate of about 1.3M. COMPANY NEWS: Shares of Sarepta Therapeutics (SRPT) surged after the company announced positive preliminary results from its Phase 1/2a gene therapy clinical trial in individuals with Duchenne muscular dystrophy. By the close, Sarepta shares rose 37%, while shares of Solid Biosciences (SLDB), which is also exploring treatments for DMD, gained 46%... On the M&A front, Roche (RHHBY) announced a deal to acquire the outstanding shares of Foundation Medicine (FMI) not already owned by Roche and its affiliates at a price of $137 per share in cash. Also, Cotiviti Holdings (COTV) announced that Verscend Technologies, a portfolio company of Veritas Capital, has agreed to acquire Cotiviti. Shareholders will receive $44.75 in cash per share of Cotiviti common stock, and Verscend will assume all of Cotiviti's outstanding debt, resulting in an enterprise value of approximately $4.9B... Meanwhile, the New York Times reported that President Donald Trump told Apple (AAPL) CEO Tim Cook that the U.S. government would not levy tariffs on iPhones assembled in China, though Apple still fears China will retaliate "in ways that hamstring its business," according to people close to the tech giant... In addition, T-Mobile US (TMUS) and Sprint (S) have informed the Federal Communications Commission that they plan to file applications seeking FCC approval to transfer control to T-Mobile of the licenses and authorizations held by Sprint and its wholly-owned and controlled subsidiaries. MAJOR MOVERS: Among the noteworthy gainers was First Connecticut (FBNK), which rose 20% after it agreed to be acquired by People's United (PBCT) in a 100% stock transaction valued at approximately $544M. Shares of People's United slid 1% after the news. Among the other notable losers was Snap (SNAP), which slipped 5% after Cowen analyst John Blackledge said his survey of Snap users shows usage is declining on both a monthly and year-over-year time period. Also lower was Tesla (TSLA), which fell 5% after CNBC reported that CEO Elon Musk told his company about an attempted "sabotage" by an employee and about another factory fire. INDEXES: The Dow fell 287.26, or 1.15%, to 24,700.21, the Nasdaq lost 21.44, or 0.28%, to 7,725.58, and the S&P 500 declined 11.18, or 0.40%, to 2,762.57.
