The major averages are starting the holiday-shortened week on an up note, supported by a positive turn in U.S.-China trade sentiment following reports that China signaled that punishment for intellectual property violations will be tightened. Overseas, the U.K.'s FTSE is rallying as Prime Minister Borris Johnson's Conservative Party strengthens its lead ahead of the December 12 election.
ECONOMIC EVENTS: In the U.S., Chicago Fed national activity index fell another 0.26 points to -0.71 in October. The Dallas Fed manufacturing index rose 3.8 points to -1.3 in November.
COMPANY NEWS: It was a very busy morning for M&A news, with four multi-billion dollar transactions announced.
LVMH Moet Hennessy Louis Vuitton (LVMUY) announced an agreement to acquire Tiffany & Co. (TIF) for $135 per share in cash in a transaction with an equity value of approximately $16.2B.
Charles Schwab (SCHW) and TD Ameritrade (AMTD) reached agreement for Schwab to acquire TD Ameritrade in an all-stock transaction valued at approximately $26B. The resulting combined firm is expected to serve 24 million client accounts with more than $5 trillion in client assets. Taken together, the two firms recently generated total annualized revenue and pre-tax profits of approximately $17 billion and $8 billion, respectively, the companies added.
The Medicines Company (MDCO) announced that it has entered into definitive agreement in which Novartis (NVS) will buy the company for $85 per share in an all-cash transaction, implying a fully diluted equity value of $9.7B. The purchase price represents a premium of approximately 45% to The Medicines Company's closing share price of $58.65 on November 18, the last trading day prior to news reports of a potential transaction between the two drugmakers.
eBay (EBAY) and viagogo announced they have entered into a definitive agreement for eBay to sell StubHub to viagogo for a purchase price of $4.05B in cash. "We believe this transaction is a great outcome and maximizes long-term value for eBay shareholders," said Scott Schenkel, interim CEO of eBay.
Outside of M&A, the morning's biggest headlines came from the regulator of taxi and private hire services in London, which announced that it will not grant Uber London Limited (UBER) a new private hire operator's licence in response to its latest application. Transport for London said it has identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk and that "TfL does not have confidence that similar issues will not reoccur in the future." Uber Technologies said via Twitter that TfL's decision not to renew Uber's license in London is "extraordinary and wrong, and we will appeal."
MAJOR MOVERS: Among the noteworthy gainers was Arrowhead (ARWR), which rose 17% after Baird analyst Madhu Kumar upgraded the stock to Outperform from Neutral with a price target of $70, up from $39, based on read-through from The Medicines Company's deal announcement. Also higher was BioCryst (BCRX), which gained 14x% after Point72 disclosed a 6.1% passive stake in the company. Additionally, Sorrento Therapeutics (SRNE) was 72% higher after it received an unsolicited, non-binding term sheet proposal submitted by two biopharmaceutical companies, to acquire all of the issued and outstanding shares of the company for between $3.00 and $5.00 per share in cash. Sorrento's board determined that the offer undervalued Sorrento and was not in the best interest of the company's stockholders and the board unanimously rejected the proposal, the company announced.
Among the notable losers was Kirkland Gold (KL), which slid 16% after it agreed to acquire Detour Gold Corporation in a deal worth about C$4.9B. Also higher was GTT Communications (GTT), which fell 6% after Cowen analyst Colby Synesael downgraded the stock to Market Perform from Outperform.
INDEXES: Near midday, the Dow was up 124.17, or 0.45%, to 27,999.79, the Nasdaq was up 97.96, or 1.15%, to 8,617.84, and the S&P 500 was up 17.94, or 0.58%, to 3,128.23.
Uber
-0.39 (-1.32%)
Tiffany
+7.535 (+6.00%)
Charles Schwab
+0.56 (+1.16%)
AMTD IDEA Group
+2.98 (+6.19%)
The Medicines Co.
+15.23 (+22.22%)
Novartis
+0.83 (+0.92%)
eBay
+0.445 (+1.27%)
LVMH
+ (+0.00%)
Arrowhead
+8.37 (+17.02%)
BioCryst
+0.275 (+12.22%)
Sorrento Therapeutics
+1.145 (+71.34%)
Kirkland Lake Gold
-7.85 (-16.48%)
GTT Communications
-0.155 (-2.78%)