Stock futures were mostly lower as the market considered the implications of a Democrat sweep of the two Georgia Senate runoff elections, but the major averages have recovered and are now higher across the board at midday. The Democrats have picked up one seat, with the second seat still too close to call. The capture of the second seat by the Democrats would open the door to a presumably sizable increase in fiscal spending as the Biden administration's agenda would face little opposition.
ECONOMIC EVENTS: In the U.S., ADP reported private payrolls dropped 123,000 in December, undershooting expectations for payroll gains. The Markit services PMI was bumped down to 54.8 in the final reading for December. This is down from the 55.3 preliminary print and from 58.4 in November, but still marks a fifth month in expansionary territory. Factory orders rose 1.0% in November.
In political news, Raphael Warnock defeated incumbent Kelly Loeffler in a Senate runoff in Georgia, according to the Associated Press. The state's other race, between Republican David Perdue and Democrat Jon Ossoff, will determine which party controls the Senate and remains too close to call.
TOP NEWS: Shares of Moderna (MRNA) were 5% higher near noon after the company announced that the European Commission has granted a conditional marketing authorization for its COVID-19 vaccine, allowing vaccination programs using the shot to be rolled out across the European Union. The company said that it sees first deliveries of the vaccine to European countries beginning next week.
The New York Stock Exchange announced that NYSE Regulation will move forward with the delisting of China Telecom (CHA), China Mobile (CHL), and China Unicom (CHU) "to comply with U.S. law." The move contradicts yesterday's announcement form NYSE, which said that NYSE Regulation did not intend to move forward with the delisting action. Of note, Bloomberg reported after NYSE's previous announcement that Treasury Secretary Steven Mnuchin told NYSE president Stacey Cunningham that he disagreed with the decision not to delist the Chinese telcos.
On the M&A front, AmerisourceBergen (ABC) and Walgreens Boots Alliance (WBA) announced strategic agreements under which AmerisourceBergen will acquire the majority of Walgreens Boots Alliance's Alliance Healthcare businesses for approximately $6.5B, comprised of $6.28B in cash and 2M shares of AmerisourceBergen common stock. Following the announcement, shares of AmerisourceBergen and Walgreens Boots Alliance rose a respective 7% and 4%.
In other M&A news, UnitedHealth's (UNH) Optum and Change Healthcare (CHNG) announced that they have agreed to combine. Under the terms of the deal, Optum will acquire Change Healthcare's common stock for $25.75 per share in cash in a transaction that is expected to close in the second half of 2021, subject to Change Healthcare shareholders' approval, regulatory approvals and other customary closing conditions. Change Healthcare shares surged 31% after the news.
Meanwhile, Tesla (TSLA) shares were 5% higher after Morgan Stanley analyst Adam Jonas raised his price target on the shares to $810 from $540 after updating his forecasts and long-term assumptions to account for the company's $5B capital raise and better than expected Q4 delivery growth. The analyst, who has raised his 2030 volume forecast to 5.2M units from 3.8M units previously, told investors that Tesla shares are "richly valued for a reason."
MAJOR MOVERS: Among the noteworthy gainers was Genetron (GTH), which rose 17% after it entered into an exclusive partnership agreement with Chia Tai Tianqing Pharmaceutical for HCCscreen. Also higher was Danimer Scientific (DNMR), which gained 15% after Jefferies analyst Laurence Alexander initiated coverage of the stock with a Buy rating and $31 price target.
Among the notable losers was Imara (IMRA), which declined 35% after it reported Phase 2a trial results of IMR-687. Also lower was NeoGenomics (NEO), which fell 10% after the company filed to sell $200M in stock and $250M in convertible senior notes.
INDEXES: Near midday, the Dow was up 492.57, or 1.62%, to 30,884.17, the Nasdaq was up 67.25, or 0.52%, to 12,886.21, and the S&P 500 was up 43.74, or 1.17%, to 3,770.60.
Moderna
+5.37 (+4.93%)
China Telecom
-1.61 (-5.65%)
China Mobile
-1.65 (-5.62%)
China Unicom
-0.05 (-0.81%)
AmerisourceBergen
+7.3 (+7.47%)
Walgreens Boots Alliance
+1.76 (+4.28%)
UnitedHealth
+2.48 (+0.72%)
Change Healthcare
+5.61 (+30.75%)
Tesla
+37.63 (+5.12%)
Genetron
+2.49 (+18.24%)
Danimer Scientific
+3.63 (+16.03%)
Imara
-8.44 (-35.55%)
NeoGenomics
-5.42 (-9.89%)