The major averages were mixed with the newly-reconstituted Dow lower, the Nasdaq higher and the S&P hugging the flatline as a strong month of August for the market came to a close. The old adage to "sell in May and go away" would not have been good advice for investors this year given the way stocks have rallied this summer, particularly in the last month, despite the fact that the U.S. leads the world with over 6M cases of COVID-19.
ECONOMIC EVENTS: In the U.S., the Dallas Fed manufacturing index jumped 11 points to 8.0 in August.
The latest data from the Johns Hopkins Whiting School of Engineering shows there are now 25.3M confirmed cases of COVID-19 worldwide, including over 6M in the U.S., and 847,107 deaths due to the disease. Looking at states with high recent case numbers, Florida reported 623,471 cases of the virus, up 1,885 from the previous day, while California reported 704,085 cases, up 4,176 from the prior day.
TOP NEWS: Shares of Apple (AAPL) and Tesla (TSLA) both finished higher in the first day of trading following the companies' respective stock splits. Starting this morning, Apple's four-for-one stock split took effect while Tesla shares are now trading on a five-for-one split adjusted basis. Apple's split was among the reasons that S&P recently pointed to when the firm announced changes to the membership of the Dow Jones Industrial Average.
Berkshire Hathaway (BRK.A) announced Sunday that one of its wholly-owned subsidiaries has acquired slightly more than 5% of the outstanding shares in "five of the leading Japanese trading companies." The companies, listed alphabetically, are Itochu (ITOCY), Marubeni (MARUY), Mitsubishi (MSBHY), Mitsui (MITSY) and Sumitomo (SSUMY). Warren Buffett, CEO of Berkshire Hathaway, has pledged that the company will make purchases only up to an ownership of 9.9% in any of the five investments.
Over the weekend, The Wall Street Journal reported on new Chinese restrictions on the export of artificial-intelligence technology that appear designed to affect a potential sale of TikTok to a U.S. buyer. Meanwhile, CNBC has reported that TikTok has decided on a bidder for its U.S., New Zealand and Australian businesses, and could announce the deal as soon as Tuesday. Microsoft (MSFT), in concert with Walmart (WMT), and Oracle (ORCL) are the two likeliest contenders for the deal and a sale price is reportedly expected to be in the range of $20B-$30B, according to Steve Kovach and Alex Sherman of CNBC.
In other M&A news, Aimmune Therapeutics (AIMT) announced that it has entered into a definitive agreement to be acquired in an all-cash transaction implying a fully-diluted equity value of $2.6B by Societes des Produits Nestle, a part of Nestle Health Science and a wholly owned subsidiary of Nestle S.A. (NSRGY). In addition, The Wall Street Journal reported late on Friday that AT&T (T) is considering the sale of its DirecTV business. CNBC's David Faber has added, citing his sources, that AT&T is in early talks to sell its DirecTV division, mainly with private equity, and hopes to have a deal signed by year-end. AT&T is not going to talk to Dish (DISH) about the DirecTV sale, Faber said.
Meanwhile, New Jersey Governor Phil Murphy announced he was signing an executive order allowing for movie theaters and other indoor performance venues to reopen on Friday, September 4th. Murphy noted that face masks and social distancing will be required and that capacity will be capped at the lesser of either 25% capacity, or 150 people. Publicly traded companies in the movie theaters space include AMC Entertainment (AMC), Cinemark (CNK), Cineworld Group (CNNWF), IMAX (IMAX), Marcus (MCS) and National CineMedia (NCMI).
Additionally, Massachusetts Attorney General Maura Healey filed a lawsuit against Credit Acceptance (CACC) over its practices in the auto loan business. Following the news, Stephens analyst Vincent Caintic said that the lawsuit does not seem to be materially new, though he noted that the one new claim is that securitizations were topped off with loans "materially" worse than initial loans.
MAJOR MOVERS: Among the noteworthy gainers was Akcea (AKCA), which rose 60.6% after Ionis (IONS) agreed to acquire all the outstanding shares of Akcea common stock that it does not already own for $18.15 per share in cash. Also higher was Genworth (GNW), which gained 27.7% after Dealreporter said that China Oceanwide has a financing plan in place for its proposed acquisition of Genworth.
Among the notable losers was BigCommerce (BIGC), which slid over 10% after Wall Street analysts rolled out coverage, including Morgan Stanley's Stan Zlotsky, who initiated the stock with an Underweight rating and $52 price target. Also lower was Regis (RGS), which fell 18.6% after reporting quarterly results.
INDEXES: The Dow fell 223.82, or 0.78%, to 223.82, the Nasdaq gained 79.82, or 0.68%, to 11,775.46, and the S&P 500 declined 7.70, or 0.22%, to 3,500.31.
Apple
+4.125 (+3.31%)
Tesla
+55.492 (+12.53%)
Berkshire Hathaway
+46.08 (+0.01%)
Berkshire Hathaway
-0.48 (-0.22%)
Itochu
+ (+0.00%)
Marubeni
+ (+0.00%)
Mitsubishi Corp.
+ (+0.00%)
Mitsui & Co
+ (+0.00%)
Sumitomo
+ (+0.00%)
Microsoft
-3.93 (-1.72%)
Walmart
-1.435 (-1.02%)
Oracle
-0.715 (-1.24%)
Bought by NSRGY
+21.62 (+171.59%)
Nestle
+ (+0.00%)
AT&T
-0.24 (-0.80%)
Merged into SATS
+0.72 (+2.07%)
AMC Entertainment
-0.41 (-6.52%)
Cinemark
-0.62 (-4.07%)
CNNWF
+
Imax
-0.285 (-1.82%)
Marcus
-0.645 (-3.94%)
National CineMedia
+0.015 (+0.42%)
Credit Acceptance
-71.53 (-15.58%)
Akcea Therapeutics
+6.985 (+61.46%)
Genworth
+0.66 (+27.97%)
Ionis Pharmaceuticals
+1.83 (+3.47%)
BigCommerce
-12.37 (-9.49%)
Regis
-1.67 (-18.41%)