Stocks are higher at midday as the second quarter, which has been the strongest quarter for the market in 22 years, comes to a close. While Fed Chair Powell said the economy's path forward is "extraordinarily uncertain and will depend in large part on our success in containing the virus" in prepared testimony, he concluded the testimony by reiterating that the Fed is "committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible." Over the last three months, there is no question that the central bank has supported the stock market, if not the broader economy.
ECONOMIC EVENTS: In U.S. data, the Conference Board Consumer Confidence Index jumped 12.2 points to 98.1 in June, up from 85.9 in May, which was much better than expected . The Chicago manufacturing PMI rose 4.3 points to 36.6 in June, which was weaker than forecast. The S&P/Case Shiller 20-city home price index rose 0.9% to 224.1 in April, which was a little below forecast.
TOP NEWS: Shares of Micron (MU) are 6% higher near noon after the memory chip maker's May quarter results and August quarter guidance were better than expected. Investors were bracing for weaker data center and smartphone commentary, but neither of those came to fruition, RBC Capital analyst Mitch Steves noted.
Wells Fargo (WFC) commented on the results of the Federal Reserve Board's Dodd-Frank Act stress test and related Comprehensive Capital Analysis and Review, announcing that the bank expects its common stock dividend in third quarter will be reduced from the current level of 51c per share. Wells added that it expects to announce the level of the third quarter dividend when it releases second quarter financial results on July 14. After the bank said it will cut its dividend but did not specify by how much. Wells Fargo needs to cut its dividend by "much more" than 25% to be comfortable that it will not trip over the Fed's dividend limits in future quarters, JPMorgan analyst Vivek Juneja tells investors in a research note. The analyst believes Wells "would be better off" cutting its dividend by 50%.
Royal Dutch Shell (RDS.A) announced a revised long-term commodity prices and margin outlook, which is expected to result in non-cash impairments in the second quarter results. Based on its reviews, aggregate post-tax impairment charges in the range of $15 to $22 billion are expected in the second quarter, said Shell, which noted that no cash impact is expected in the quarter.
Lululemon (LULU) announced it will acquire in-home fitness company Mirror for $500M. Commenting on the news, MKM Partners analyst Roxanne Meyer called the acquisition "highly attractive and synergistic" for Lululemon as it further connects customers to its brand by "integrating digital and physical experiences." Meanwhile, Roth Capital analyst George Kelly boosted Peloton's (PTON) price target, saying that while the deal "raises the competitive bar," it also brings more attention to the at-home fitness space from large fitness, apparel, private equity and tech companies.
Additionally on the M&A front, Uber Technologies (UBER) is in discussions to buy Postmates for about $2.6B, Cara Lombardo of The Wall Street Journal reported, citing people familiar with the matter. Postmates has received acquisition offers from Uber and a special purpose acquisition company, sources told CNBC's Alex Sherman. Postmates hasn't decided whether to accept Uber's offer, the SPAC's offer or go public, though it is expected to make a decision in the coming days, according to CNBC's report.
MAJOR MOVERS: Among the noteworthy gainers was Bloom Energy (BE), which rose 31% after the company and Samsung Heavy Industries signed a joint development agreement to design and develop fuel cell-powered ships. Also higher was Acuity Brands (AYI), which gained 8% after reporting quarterly results.
Among the notable losers was Liquidia Technologies (LQDA), which fell 22% after agreeing to acquire RareGen. Also lower was Energy Recovery (ERII), which declined 13% after announcing an agreement with Schlumberger (SLB) to exit its 15-year licensing deal for Schlumberger's exclusive use of the company's VorTeq hydraulic pumping system.
INDEXES: Near midday, the Dow was up 74.13(+0.29%, to 25,669.93, the Nasdaq was up 140.83(+1.43%, to 10,014.98, and the S&P 500 was up 29.94(+0.98%, to 3,083.18.
Micron
+2.88 (+5.86%)
Wells Fargo
+0.01 (+0.04%)
Uber
+1.445 (+4.88%)
Use JTKWY
-0.66 (-0.95%)
Lululemon
+19.16 (+6.53%)
Peloton
+1.22 (+2.14%)
Symbol changed to SHEL
-1.09 (-3.26%)
Bloom Energy
+2.515 (+30.54%)
Acuity Brands
+7.24 (+8.11%)
Liquidia
-2.38 (-22.28%)
Energy Recovery
-1.14 (-12.84%)
SLB
+0.1 (+0.55%)