Stocks opened little changed and then fell into negative ground. Investors may be optimistic about the start of trade talks between the U.S. and China but after a feverish rally during the past two weeks the market appeared ready for a pause. The averages drifted but eventually moved back to positive ground and have lifted to their best levels of the session in early afternoon trading.
ECONOMIC EVENTS: In the U.S., the ISM nonmanufacturing index dropped 3.1 points to 57.6 for December after a surprise 0.4 point uptick to 60.7 in November.
COMPANY NEWS: Shares of Dollar Tree (DLTR) rose 6% after Starboard Value announced it has taken a 1.7% stake in the company and is pushing for changes, including exploring a sale of Family Dollar and raising certain prices beyond $1, and nominated a slate of director candidates for election at the company's annual meeting. In response, the company said it looks forward to the opportunity to engage with Starboard "regarding any suggestions they may have," and will continue "to stay close to our shareholders on matters of importance to them and keep taking actions to drive shareholder value."
In M&A news, Eli Lilly (LLY) announced a definitive agreement to acquire Loxo Oncology (LOXO) for $235 per share in cash, or approximately $8B. Piper Jaffray analyst Tyler Van Buren said he views the price of $235 per share paid by Lilly for Loxo as "fair" and called out Agios Pharmaceuticals (AGIO), ArQule (ARQL), Array BioPharma (ARRY), Blueprint Medicines (BPMC), Kura Oncology (KURA) and Mirati Therapeutics (MRTX) as other names in the precision medicine/oncology space that could be up today as a result of the buyout news.
Samsung Electronics (SSNLF) announced on Sunday that it will offer iTunes Movies and TV Shows and Apple (AAPL) AirPlay 2 support on 2019 Samsung Smart TV models beginning this spring.
MAJOR MOVERS: Among the noteworthy gainers was Luxoft (LXFT), which surged 81% after it agreed to be acquired by DXC Technology (DXC) for $59 per share in cash. Also higher was Sage Therapeutics (SAGE), which gained 44% after SAGE-217 met its primary and secondary endpoints in a Phase 3 trial.
Among the notable losers was PG&E (PCG), which dropped 22% after Reuters reported that the company is weighing a bankruptcy filing. Also lower was Hi-Crush Partners (HCLP), which fell 15% after it suspended its quarterly distribution due to market conditions.
INDEXES: Near 1 pm ET, the Dow was up 213.57(+0.91%, to 23,646.73, the Nasdaq was up 105.12(+1.55%, to 6,843.98, and the S&P 500 was up 30.13(+1.19%, to 2,562.07.
Dollar Tree
+5.77 (+6.21%)
Eli Lilly
+1.33 (+1.16%)
Loxo Oncology
+91.78 (+65.64%)
Apple
-0.8 (-0.54%)
Samsung
+ (+0.00%)
Agios Pharmaceuticals
+3.62 (+7.74%)
ArQule
+0.15 (+4.70%)
Array Technologies
+1.57 (+9.99%)
Blueprint Medicines
+8.48 (+15.86%)
Kura Oncology
+0.75 (+4.96%)
Mirati Therapeutics
+1.91 (+4.25%)
Luxoft
+25.795 (+81.36%)
DXC Technology
+0.2 (+0.35%)
Sage Therapeutics
+43.6 (+44.75%)
PG&E
-5.405 (-22.16%)
Hi-Crush Partners
-0.68 (-15.63%)