Stocks opened broadly higher, rebounding from Friday's losses after U.S. President Donald Trump indicated his intention to ease trade tensions with China after he raised tariff rates on $550B in Chinese goods late last week. The president, who over the weekend said he regrets not raising the tariffs even higher, softened his stance to start the week, saying that Beijing had contacted the White House to say it wanted to continue trade negotiations. Meanwhile, the G7 summit continues as French President Macron said he wants to arrange a meeting between Trump and President Hassan Rouhani of Iran.
ECONOMIC NEWS: In the U.S., durable goods orders climbed 2.1% in July after a revised 1.8% rebound in June after the -2.3% drop in May. Transportation orders surged 7.0% after the prior 4.1% gain. In trade news, U.S. President Donald Trump said that the White House has reached a trade deal with Japan "in principle," saying that the transaction covers "billions and billions of dollars." Looking at China, Trump tweeted that President Xi Jipning and his representatives want a "calm resolution" and that trade talks between the two countries are ongoing.
TOP NEWS: Amgen (AMGN) shares were 3% higher after it announced an agreement with Celgene (CELG) in connection with its previously announced merger with Bristol-Myers (BMY) to acquire worldwide rights to psoriasis and psoriatic arthritis treatment Otezla, and certain related assets and liabilities, for $13.4B in cash, or approximately $11.2B, net of the present value of $2.2B in anticipated future cash tax benefits. The transaction is expected to close by the end of 2019. In connection with the news, Bristol-Myers, whose shares are up 3.3%, announced that it will raise its accelerated share repurchase program to $7B from $5B.
Shares of Johnson & Johnson (JNJ) are in focus as an Oklahoma judge is expected to rule on Monday on whether the company should be held liable in a lawsuit claiming the drugmaker is responsible for fueling the opioid epidemic and should be forced to pay $17B. Ahead of the ruling, JPMorgan analyst Lisa Gill argued that a favorable judgment for Johnson & Johnson could drive a positive reaction across the pharma distributors, while a substantial verdict against the company would likely have an initial negative read through.
Meanwhile, TechnipFMC (FTI) said its board has approved a plan to separate into two independent, publicly traded companies: RemainCo, a technology and services provider, and SpinCo, an engineering and construction company. The separation is expected to be completed in the first half of 2020.
MAJOR MOVERS: Among the noteworthy gainers was PDC Energy (PDCE), which surged 16.7% after it agreed to combine with SRC Energy (SRCI) in an all-stock transaction valued at $1.7B. SRC Energy shares were 11.2% higher after the news. Also higher was The Medicines Co. (MDCO), which rose 8.4% after announcing the ORION-11 Phase 3 study of inclisiran sodium 300 mg met all primary and secondary endpoints with efficacy consistent with findings from Phase 1 and 2 studies.
Among the notable losers was Zogenix (ZGNX), which slid 14.3% after it announced the acquisition of Modis Therapeutics with a $250M upfront payment. Also lower was Brainsway (BWAY), which fell 4.2% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 287.99, or 1.12%, to 25,916.89, the Nasdaq was up/ 96.46, or 1.24%, to 7,848.23, and the S&P 500 was up 30.85, or 1.08%, to 2,877.96.
Amgen
+5.82 (+2.92%)
Bought by BMY
+2.92 (+3.11%)
Bristol Myers
+1.53 (+3.28%)
Johnson & Johnson
+0.48 (+0.38%)
TechnipFMC
+1.2 (+5.20%)
PDC Energy
+4.21 (+16.66%)
SRC Energy
+0.45 (+10.83%)
The Medicines Co.
+3.19 (+9.10%)
Zogenix
-6.86 (-13.70%)
Brainsway
+ (+0.00%)