Stocks looked in early trading like they may be set for an up day after reports that China’s top trade negotiator, Liu He, said he was "cautiously optimistic" about reaching a phase one deal with the U.S. However, investors are staying cautious about the trade negotiations as the self-imposed U.S. deadline of December 15 for added tariffs gets closer and the major averages are lower near noon.
ECONOMIC EVENTS: In the U.S., initial jobless claims were steady at 227,000 in the week ended November 16. The Philly Fed index rose 4.8 points to 10.4 in November from 5.6 in October. Existing home sales bounced 1.9% to a 5.46M home pace in October. The leading economic indicators index fell 0.1% in October to 111.7.
TOP NEWS: Charles Schwab (SCHW) is in talks to buy TD Ameritrade (AMTD) and a deal could be announced as early as today, a source told CNBC's Becky Quick. Following Quick's report, shares of TD Ameritrade are up 21% in midday trading, while Charles Schwab's stock us up 7.5% as investors appear to be pleased by the prospects of such a combination. Online discount brokerage peer E-Trade Financial (ETFC), which was widely viewed as the most likely M&A candidate in the space, is down 8% near noon.
In other M&A news, Reuters reported that LVMH (LVMUY) has raised its offer for Tiffany (TIF) to $130 per share, adding that LVMH has received access to Tiffany's financials. Meanwhile, Xerox (XRX) made public a letter sent to members of the board at HP Inc. (HPQ), in which it states that it "is determined to capture the compelling opportunity for our respective shareholders" it sees in its proposal to acquire HP.
Additionally, PayPal (PYPL) announced that it is buying Honey Science, a technology platform for shopping and rewards, for approximately $4B. Following the news, one Wall Street analyst called the acquisition a "sweet deal," while another said PayPal made a "bold move" with the purchase.
Shares of Macy's (M) are sliding after the department store owner posted better than expected earnings in the third quarter, but lower than expected sales, and lowered its outlook for the full-year for both sales and profits. Commenting on the deceleration in third quarter sales, chairman and CEO Jeff Gennette said that "while we anticipated a negative comp as we were lapping a very strong third quarter last year, the sales deceleration was steeper than we expected."
MAJOR MOVERS: Among the noteworthy gainers was Uber (UBER), which rose 5% after CEO Dara Khosrowshahi disclosed in a filing that he had purchased 250,000 shares of company stock at an average price of $26.75 per share on November 18 in a transaction with a value of roughly $6.7M. Also higher was L Brands (LB), which gained 5% after reporting quarterly results.
Among the notable losers was MacroGenics (MGNX), which slid 8% after Morgan Stanley analyst David Lebowitz downgraded the stock to Underweight from Equal Weight with a $6 price target. Also lower were Cubic (CUB) and Baozun (BZUN), which fell 19% and 17%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 84.32, or 0.30%, to 27,736.77, the Nasdaq was down 33.16, or 0.39%, to 8,493.58, and the S&P 500 was down 9.70, or 0.31%, to 3,098.76.
Charles Schwab
+3.41 (+7.62%)
AMTD IDEA Group
+8.41 (+20.32%)
E-Trade
-3.86 (-8.41%)
Tiffany
+3.21 (+2.60%)
LVMH
+ (+0.00%)
Xerox
+0.3 (+0.78%)
HP Inc.
+0.07 (+0.36%)
Macy's
-0.41 (-2.73%)
PayPal
-1.11 (-1.07%)
Uber
+1.07 (+3.82%)
L Brands
+0.88 (+5.71%)
MacroGenics
-0.61 (-7.08%)
Cubic
-13.905 (-18.89%)
Baozun
-7.84 (-18.03%)