Stocks are slightly lower as the U.S. keeps pressure on China via potential restrictions on technology sales, with the latest being news that Chinese video surveillance companies are at risk of being blacklisted. Retail stocks are not helping either, as several big names are sliding following their latest quarterly reports. The exception in that sector is Target (TGT), which is rising after its results beat expectations.
ECONOMIC EVENTS: In the U.S., no economic data of note was released this morning. The day's big economic event is yet to come with the release of the minutes from the April 30-May 1 FOMC meeting due at 2 pm ET.
TOP NEWS: Shares of Qualcomm (QCOM) have fallen over 10% after a U.S. district court judge ruled in favor of the U.S. Federal Trade Commission in the FTC's litigation against the company. Qualcomm, which said it "strongly disagrees with the judge's conclusions," will seek a stay of the district court's judgment and an expedited appeal, the company stated following news of the decision.
Target reported stronger comp sales growth and firmer gross margins that drove earnings upside in the first quarter, with CEO Brian Cornell arguing that the company's "performance and market-share gains demonstrate that the model is working." Investors appear to be in agreement, sending the stock up 9%. Conversely, Lowe's (LOW) reported better than expected U.S. comps but with disappointing margin performance and a worse than expected outlook, sending its shares down 11%. Another retailer sliding after issuing worse than expected guidance is Nordstrom (JWN), which has sunk 9% after the company said it experienced a further deceleration in sales trends in Q1 due to "executional misses."
In M&A news, Avon Products (AVP) and Natura & Co. each confirmed that they are in advanced discussions regarding a potential all-stock merger transaction, after which Avon shares rose 11%. Amgen (AMGN) announced an offer to acquire Nuevolution, a Danish biotech company focused on inflammation, oncology and immuno-oncology, for approximately $167M. Additionally, International Speedway (ISCA) agreed to be acquired by NASCAR in a transaction valued at approximately $2B, or $45 per share in cash.
MAJOR MOVERS: Among the noteworthy gainers was Inphi (IPHI), which rose 5% after updating its Q2 outlook based on the company's understanding of the Executive Order issued to the United States Department of Commerce's Bureau of Industry and Security to add Huawei Technologies and its affiliates to the Bureau's Entity List. Also higher was Sea Limited (SE), which gained 25% after reporting quarterly results.
Among the notable losers was Ambarella (AMBA), which slid 11% following reports that Chinese video surveillance companies are at risk of being placed on a U.S. blacklist. Also lower was Pure Storage (PSTG), which fell 23% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 67.37, or 0.26%, to 25,809.96, the Nasdaq was down 27.07, or 0.35%, to 7,758.66, and the S&P 500 was down 6.03, or 0.21%, to 2,858.33.
Qualcomm
-8.52 (-10.95%)
Lowe's
-12.06 (-10.86%)
Target
+6.55 (+9.09%)
Nordstrom
-3.375 (-8.91%)
Avon Products
+0.355 (+11.11%)
International Speedway
+0.83 (+1.88%)
Amgen
-0.73 (-0.43%)
Inphi
+1.64 (+4.00%)
Sea Limited
+6.25 (+24.63%)
Ambarella
-5.52 (-12.48%)
Pure Storage
-4.64 (-22.52%)