The major averages have been searching for direction in early trading, but are slightly lower in the early afternoon after House Speaker Nancy Pelosi said over the weekend that she has informed the White House that it has until Tuesday to reach an agreement with Democrats or it is highly unlikely that a stimulus deal will be reached before the election.
ECONOMIC EVENTS: In the U.S., the NAHB housing market index rose 2 points to 85 in October to hit a new record high.
In China, GDP was reported to have climbed 4.9% year-over-year in Q3. While this is better growth than may be seen during the quarter than in many other parts of the world, it still fell short of expectations.
Data from the Johns Hopkins Whiting School of Engineering shows there are now 40.2M confirmed cases of COVID-19 worldwide, including 8.16M in the U.S., and 1.12M deaths due to the disease, including about 220,000 in the U.S.
TOP NEWS: In M&A news, ConocoPhillips (COP) and Concho Resources (CXO) announced that they have entered into a definitive agreement to combine companies in an all-stock transaction, as had been recently foreshadowed by media reports. The transaction, which is expected to close in the first quarter of 2021, will create a combined company with an approximately $60B enterprise value that will hold approximately 23B barrels of oil equivalent, or BBOE, resources with an average cost of supply of below $30 per barrel WTI, Conoco and Concho stated.
In other M&A news, American Equity Investment Life (AEL), which had recently confirmed that it received an unsolicited non-binding proposal from Athene Holding (ATH) to acquire all outstanding common shares for $36.00 per share in cash, opted instead to enter into a strategic partnership with Brookfield Asset Management (BAM). Under the terms of the partnership agreement, Brookfield will acquire a 19.9% ownership interest in the common shares of AEL in two stages: an initial purchase of a 9.9% interest at $37.00 per share and a second purchase of an incremental 10.0% interest, at the greater value of $37.00 per share or adjusted book value per share. Following the partnership announcement, American Equity shares have fallen about 20%.
Also, Front Yard Residential Corporation (RESI) announced it has agreed to be acquired by a partnership led by Pretium and including funds managed by the Real Estate Equity and Alternative Credit strategies of Ares Management Corporation (ARES) for $13.50 in cash per share.
Tivity Health (TVTY) announced an agreement to sell its Nutrition Business, which includes Nutrisystem and South Beach Diet, to food and consumer-focused private equity firm Kainos Capital for $575M in cash.
MAJOR MOVERS: Among the noteworthy gainers was AMC Entertainment (AMC), which rose 19% after it announced that several of its New York theaters will resume operations. Also higher was BioSpecifics (BSTC), which gained 44% after Endo (ENDP) agreed to acquire all oustanding shares of the company for $540M. Shares of Endo were 13% higher after the news.
Among the notable losers was Aerie Pharmaceuticals (AERI), which slid 13% after BofA analyst Jason Gerberry downgraded the stock to Underperform from Neutral. Also lower was Mednax (MD), which fell 6% after Deutsche Bank analyst Pito Chickering downgraded the stock to Sell from Hold.
INDEXES: Near midday, the Dow was down 59.05, or 0.21%, to 28,547.26, the Nasdaq was down 23.82, or 0.20%, to 11,647.74, and the S&P 500 was down 10.34, or 0.30%, to 3,473.47.
ConocoPhillips
+0.05 (+0.15%)
Bought by COP
+0.25 (+0.51%)
American Equity
-6.21 (-19.22%)
Brookfield Asset Management
+0.57 (+1.69%)
Front Yard Residential
+3.56 (+35.81%)
Taken private
+0.66 (+4.28%)
AMC Entertainment
+0.645 (+21.25%)
BioSpecifics
+27.1 (+44.38%)
Endo
+0.665 (+13.34%)
Aerie Pharmaceuticals
-1.585 (-13.63%)
Pediatrix Medical
-0.865 (-5.82%)