Stocks opened with modest losses and have moved in a narrow trading range all morning. The losses are being attributed to fatigue after the market’s recent rally, end of month profit-taking, and disappointment that no nuclear deal was reached between the U.S. and North Korea. Given the current slate of headwinds, the market is holding up reasonably well. The day’s economic data is helping also, as the Chicago Purchasing Manager’s report and the Q4 GDP report were both better than expected.
ECONOMIC EVENTS: In the U.S., Q4 GDP posted a 2.6% rate of growth, decelerating from 3.4% in Q3 but topping consensus expectations. The Chicago PMI bounced 8.0 points to 64.7 in February, more than recovering from a 7.1 point drop in January. Initial jobless claims rose 8,000 to 225,000 in the week ended February 23.
TOP NEWS: Shares of Celgene (CELG) have dropped 8% in morning trading after a major Bristol-Myers Squibb (BMY) shareholder said it would not support the acquisition. Wellington Management said it thinks Bristol-Myers shareholders are accepting too much risk and that Celgene shareholders are getting the drugmaker's shares at well below implied asset value. Another shareholder, Starboard Value, said it also opposes the deal.
HP Inc. (HPQ) reported first quarter results that prompted BofA analyst Wamsi Mohan to downgrade the stock two notches, to Underperform from Buy. His prior thesis was built on expectations for stability in high margin print supplies, which he now has lower confidence in, he tells investors. Mohan cut his price target on HP Inc. shares to $19 from $30. Near noon, the computer, printer and supplies maker fell 16% to about $20 per share.
MAJOR MOVERS: Among the noteworthy gainers was Horizon Pharma (HZNP), which rose 27% after the company reported its Phase 3 confirmatory trial evaluating teprotumumab for the treatment of active thyroid eye disease met its primary endpoint and all secondary endpoints. Also higher were Endo (ENDP) and Monster Beverage (MNST), which gained a respective 7% and 10% after reporting quarterly results.
Among the notable losers was Box (BOX), which fell 20% after the company's "very disappointing" quarterly report prompted downgrades of the stock at Rosenblatt and KeyBanc. Also lower after reporting quarterly results were Booking Holdings (BKNG) and Teladoc (TDOC), which each fell about 9%.
INDEXES: Near midday, the Dow was down 22.05, or 0.08%, to 25,963.11, the Nasdaq was down 4.72, or 0.06%, to 7,549.79, and the S&P 500 was down 2.18, or 0.08%, to 2,790.20.
Bought by BMY
-7.42 (-8.15%)
Bristol Myers
+0.36 (+0.71%)
HP Inc.
-3.835 (-16.09%)
Horizon Therapeutics
+5.89 (+26.96%)
Endo
+0.61 (+5.91%)
Monster Beverage
+5.54 (+9.44%)
Box
-4.95 (-19.91%)
Booking Holdings
-171.38 (-8.99%)
Teladoc
-5.255 (-7.62%)