Stocks have been bouncing back from yesterday's selloff after Jenny Leonard and Shuping Niu of Bloomberg reported that the U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a "phase one" trade deal. People familiar with the talks said that President Donald Trump's comments yesterday downplaying the urgency of a deal shouldn't be understood to mean the talks were stalling, Leonard and Niu added. U.S. negotiators expect a phase-one deal with China to be completed before American tariffs are set to rise on December 15, the report also said.
ECONOMIC EVENTS: In the U.S., ADP reported private payrolls rose by only 67,000 jobs in November, missing the consensus forecast of 135,000. Markit's final November services PMI rose 1 point from the prior month to 51.6 , matching the preliminary print. The ISM services index fell 0.8 to 53.9 in November, which was another disappointment after a roughly 2 point rise in October.
TOP NEWS: Alphabet (GOOGL) CEO Larry Page announced last night in a company blog post that Google CEO Sundar Pichai will be the chief executive of both Google and Alphabet going forward. "With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it's the natural time to simplify our management structure. We've never been ones to hold on to management roles when we think there's a better way to run the company. And Alphabet and Google no longer need two CEOs and a President," Page wrote in his letter announcing the executive changes.
While Alphabet was showing its trust in its current leadership, Expedia (EXPE) did the opposite in announcing that CEO Mark Okerstrom and CFO Alan Pickerill were leaving the company due to the fact that "senior management and the board disagreed on strategy." Chairman Barry Diller, who will have a hand in managing day-to-day operations while the board determines the long-term leadership of the company, said the board disagreed with the departing leadership's "lackluster near-term outlook" and that he "strongly" believes the company can accelerate growth in 2020. "I will be purchasing additional shares in the company as a tangible sign of my faith in and commitment to Expedia's long-term future," added Diller.
Workday (WDAY) shares are down 5% near noon after the company reported fiscal Q3 results that several analysts called "solid" along with above consensus guidance for Q4. However, Jefferies analyst Brent Thill called its preliminary fiscal 2021 guidance for 21% subscription growth a "headscratcher" while Compass Point analyst Marshall Senk downgraded Workday to Neutral from Buy, telling investors that management has been delivering commentary that growth forecasts for next year need to be reined in.
In another note, Jefferies' Thill said fellow enterprise cloud services provider Salesforce (CRM) posted "strong" fiscal Q3 results across the board, setting the stage for a strong finish to fiscal 2020. However, Barclays analyst Raimo Lenschow said he believes Salesforce shares will remain range-bound post last night's fiscal report. Near midday, Salesforce shares are down 4%.
In M&A news, Instructure (INST) announced that it has agreed to be acquired by private equity investment firm Thoma Bravo in an all-cash transaction that values the company at approximately $2B, or $47.60 per share.
MAJOR MOVERS: Among the noteworthy gainers was 22nd Century (XXII), which rose 5% after it announced its entrance into the CBD product space with an investment in Panacea Life Sciences. Also higher was HealthEquity (HQY), which gained 7% after reporting quarterly results.
Among the notable losers was G-III Apparel (GIII), which slid 6% after it rpeorted quartelry results and lowered its guidance for fiscal 2020. Also lower after reporting quarterly results was Marvell (MRVL), which fell 5%.
INDEXES: Near midday, the Dow was up 204.93, or 0.75%, to 27,707.74, the Nasdaq was up 50.48, or 0.59%, to 8,571.13, and the S&P 500 was up 21.82, or 0.71%, to 3,115.02.
Alphabet
+22.63 (+1.75%)
Expedia
+6.21 (+6.25%)
22nd Century
+0.05 (+5.00%)
HealthEquity
+4.24 (+6.92%)
G-III Apparel
-1.77 (-6.21%)
Marvell
-1.31 (-5.20%)
Alphabet
+22.36 (+1.73%)