Stocks opened higher amid reports that political leaders had agreed in principle to provisions that would avoid a government shutdown. While it is still unclear if President Trump will accept the partial amount of funding to build his planned border wall, the progress has lifted the spirits of investors. There also remains optimism over the ongoing trade talks between the U.S. and China. The averages have continued to move higher throughout the morning in a broad-based advance that has seen each of the major averages rise by more than 1%.
ECONOMIC EVENTS: In the U.S., the JOLTS report showed that job openings rose 169,000 to 7.34M in December.
TOP NEWS: Class A shares of Under Armour (UAA) were 7% higher near noon after the athletic apparel company reported better than expected earnings and revenue for the fourth quarter and reaffirmed its guidance for fiscal 2019. Commenting on the results, chairman and CEO Kevin Plank said that the quarterly results demonstrate "stability" in the business.
Gilead (GILD) shares fell 5% after the company said that STELLAR-4, a Phase 3 study evaluating the safety and efficacy of selonsertib, did not meet the pre-specified week 48 primary endpoint in patients with nonalcoholic steatohepatitis, or NASH. Following the announcement, Wells Fargo analyst Jim Birchenough downgraded the stock to Market Perform from Outperform, saying that he sees a lack of growth catalysts for the company following the Phase 3 trial failure.
In M&A news, shares of Elli Mae (ELLI) surged 21% after the company agreed to be acquired by Thoma Bravo for $99 per share in cash, or a total equity value of roughly $3.7B. Of note, Ellie Mae said that the pact includes a 35-day "go-shop" period, which permits Ellie Mae's board and advisors to actively initiate, solicit, encourage, and potentially enter negotiations with parties that make alternative acquisition proposals.
Meanwhile, Coty (COTY) shares jumped 15% after JAB Cosmetics said that an affiliate will shortly commence a tender offer pursuant to which JAB Cosmetics B.V. would acquire up to 150M additional shares of Coty Class A common stock at a price of $11.65 per share in cash.
MAJOR MOVERS: Among the noteworthy gainers was Viking Therapeutics (VKTX), which rose 6% after William Blair analyst Andy Hsieh said that Viking could emerge as a "prime" buyout target for Gilead. Also higher were Mimecast (MIME) and OneMain Holdings (OMF), which gained a respective 18% and 13% after reporting quarterly results.
Among the notable losers was Applied Optoelectronics (AAOI), which slid 6.5% after Rosenblatt analyst Jun Zhang cut the firm's price target on the stock to $10 from $15 and reiterated a Sell rating. Also lower were Multi-Color Corporation (LABL) and Molson Coors (TAP), which fell 14% and 9%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was up 341.13, or 1.36%, to 25,394.24, the Nasdaq was up 100.04, or 1.36%, to 7,407.94, and the S&P 500 was up 34.21, or 1.26%, to 2,744.01.
Under Armour
+1 (+5.22%)
Under Armour
+1.34 (+6.45%)
Gilead
-3.52 (-5.20%)
Ellie Mae
+17.19 (+20.97%)
Coty
+1.41 (+14.58%)
Viking Therapeutics
+0.425 (+5.24%)
OneMain
+3.89 (+13.01%)
Mimecast
+8.01 (+18.70%)
Applied Optoelectronics
-1.15 (-7.29%)
Taken private
-6.73 (-13.21%)
Molson Coors
-6.13 (-9.38%)