Stocks gained to start the week with support from M&A and positive vaccine news. The Federal Reserve meets on Tuesday and Wednesday, but Chair Powell largely preempted this meeting in terms of policy with his Jackson Hole announcement of new strategies to pursue an average inflation target and monitor any shortfall in employment. Though analysts don't anticipate any news on forward guidance, the FOMC is expected to underscore its "lower for longer" policy stance on Wednesday.
ECONOMIC EVENTS: In the U.S., the economic calendar was quiet.
The latest data from the Johns Hopkins Whiting School of Engineering shows there are now over 29M confirmed cases of COVID-19 worldwide, including 6.5M in the U.S., and about 925,000 deaths due to the disease.
In U.K. news, Reuters reported that the European union is set to postpone a decision allowing clearing houses in London to continue clearing euro transactions for EU-based clients due to the U.K.'s plan to breach part of the Brexit separation agreement.
TOP NEWS: Over the weekend, Microsoft (MSFT) said in a blog post that ByteDance, the owner of social video app TikTok, had chosen not to sell the U.S. assets of TikTok to the company.
Subsequently, on Monday morning, Oracle (ORCL) confirmed in a press release U.S. Treasury Secretary Steven Mnuchin's statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle "will serve as the trusted technology provider."
Explaining it all, Reuters' Echo Wang and Greg Roumeliotis said Oracle has suggested a deal structured as a partnership, rather than an outright sale, with the U.S. arm of TikTok after China's state-run English television channel said parent ByteDance would not sell TikTok's U.S. operations to either company and would not give the source code for the platform to any U.S. firm. Under the current deal proposed to U.S. authorities, Oracle would be TikTok's technology partner and assume management of TikTok's U.S. user data, while Oracle is also negotiating taking a stake in TikTok's U.S. operations, the reporters' sources said. While Mnuchin told CNBC that the administration would review the proposal this week, it is unclear whether President Donald Trump, who wants a U.S. technology firm to own most of TikTok in the U.S., will approve the deal, the report added.
The cooperation agreement between TikTok and U.S. companies is not limited to Oracle (ORCL), but also includes Walmart (WMT), according to a Chinese-language report from Caixin.
In other M&A news, Nvidia (NVDA) and SoftBank (SFTBY) announced a definitive agreement under which Nvidia will acquire ARM Limited from SoftBank and the SoftBank Vision Fund in a transaction valued at $40B. Under the terms of the transaction, Nvidia will pay to SoftBank a total of $21.5B in Nvidia common stock and $12B in cash, which includes $2B payable at signing.
Meanwhile, Gilead Sciences (GILD) announced an agreement to acquire Immunomedics (IMMU) for $88.00 per share in a cash transaction that values Immunomedics at approximately $21B. Gilead's price represents a 108% premium to Friday's closing price for shares of Immunomedics following a "remarkable" few months of clinical, regulatory and commercial execution around Trodelvy, noted Piper Sandler analyst Joseph Catanzaro. Meanwhile, Seattle Genetics (SGEN) and Merck (MRK) announced two new strategic oncology collaborations. As part of the agreement, Seattle Genetics will receive a $600M upfront payment and Merck will make a $1B equity investment in 5M shares of Seattle Genetics common stock at a price of $200 per share.
Disney's (DIS) ESPN announced that it has entered into two separate multi-year agreements with Caesars Entertainment (CZR) and DraftKings (DKNG). Both deals include co-exclusive link integrations across ESPN digital platforms connecting fans to sportsbooks from Caesars Entertainment's sports betting partner, William Hill (WIMHY), and DraftKings. Shares of DraftKings jumped 17.3% after the news.
In COVID-19 news, AstraZeneca (AZN) announced over the weekend that clinical trials for the Oxford coronavirus vaccine, AZD1222, have resumed in the U.K. following confirmation by the Medicines Health Regulatory Authority that it was safe to do so. On September 6, a standard review process had triggered a voluntary pause to vaccination across all global trials to allow review of safety data by independent committees, and international regulators. Meanwhile, Reuters later reported that AstraZeneca's COVID-19 vaccine trial remains on hold in the U.S. for now.
In addition, Pfizer (PFE) and BioNTech (BNTX) announced that they have submitted an amended protocol to the U.S. Food and Drug Administration to expand the enrollment of their Phase 3 pivotal COVID-19 vaccine trial to up to approximately 44,000 participants which also allows for the enrollment of new populations.
MAJOR MOVERS: Among the noteworthy gainers was Scientific Games (SGMS), which rose 39.3% after a number of long-term institutional investors agreed to acquire a 34.9% stake in the company from MacAndrews & Forbes at a price of $28 per share. Also higher was Vaxart (VXRT), which gained 46.8% after the company announced FDA clearance of its investigational new drug application for its oral COVID-19 vaccine candidate.
Among the notable losers was Kala Pharmaceuticals (KALA), which fell 8.9% after Jefferies downgraded the stock to Hold from Buy after surveying 25 ophthalmologists and 25 optometrists about the potential use of the company's Eysuvis when it comes to market. Also lower was Kroger (KR), which slid almost 4.5% after BofA analyst Robert Ohmes downgraded the stock to Neutral from Buy.
INDEXES: The Dow rose 327.69, or 1.18%, to 27,993.33, the Nasdaq gained 203.11, or 1.87%, to 11,056.65, and the S&P 500 advanced 42.57, or 1.27%, to 3,383.54.
Microsoft
+1.07 (+0.52%)
Oracle
+2.445 (+4.29%)
Walmart
+0.62 (+0.45%)
Nvidia
+28.09 (+5.77%)
SoftBank Group
+ (+0.00%)
Gilead
+1.43 (+2.20%)
Acquired by GILD
+41.32 (+97.75%)
Seagen
+22.23 (+14.85%)
Merck
+0.93 (+1.12%)
Disney
-0.42 (-0.32%)
Caesars
+5.28 (+10.53%)
DraftKings
+7.19 (+17.36%)
AstraZeneca
+0.3 (+0.56%)
Pfizer
+0.94 (+2.61%)
BioNTech
+2.32 (+3.56%)
Scientific Games
+7.5 (+39.60%)
Vaxart
+2.48 (+46.88%)
Kala Pharmaceuticals
-0.77 (-8.79%)
Kroger
-1.53 (-4.45%)