Stock futures were mostly lower as the market considered the implications of a possible Democrat sweep of the two Georgia Senate runoff elections, but the major averages recovered and were higher across the board at midday. The indexes came off their best levels during afternoon trading as pro-Trump rioters stormed the U.S. Capitol as members of Congress were meeting to certify the Electoral College results of the 2020 presidential election. With the breach ongoing at the time of the market close, the National Guard and other protective services were being deployed to defuse the situation.
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 Federal Reserve news, minutes from the last FOMC show that the Fed sees assets increasing until "substantial further progress" is made on the committee's maximum employment and price stability goals. The minutes also said that with the pandemic worsening across the country, "the expansion was expected to slow even further in coming months. Nevertheless, the positive vaccine news received over the intermeeting period was viewed as favorable for the medium-term economic outlook."
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.
Meanwhile, pro-Trump protesters in Washington, D.C. breached parts of the U.S. Capitol Building, putting the Senate in recess and the building on lockdown. The House and Senate were evacuated as their members were working on the process to certify the election of Joe Biden as the incoming president.
TOP NEWS: Shares of Moderna (MRNA) were 6.5% higher 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.
In other China news, the Wall Street Journal reported that U.S. officials at the State Department and Department of Defense are weighing prohibiting people in the U.S. from investing in Alibaba (BABA) and Tencent (TCEHY), potentially adding the companies to a blacklist of firms prohibited to U.S. investment. Alibaba shares fell over 5% in New York after the report.
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 8.7% and 4.5%.
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 30% after the news.
Meanwhile, Tesla (TSLA) shares were almost 3% 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.
Additionally, New York Governor Andrew Cuomo announced legislation to authorize mobile sports wagering as part of the 2021 State of the State. Under the proposal, the New York State Gaming Commission will issue a request for proposals to select and license a sports operator or platform to offer mobile sports wagering in New York. Shares of DraftKings (DKNG) rose 3% after the news.
MAJOR MOVERS: Among the noteworthy gainers was Genetron (GTH), which rose 14% after it entered into an exclusive partnership agreement with Chia Tai Tianqing Pharmaceutical for HCCscreen. Also higher was Danimer Scientific (DNMR), which gained 10% 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 38% after it reported Phase 2a trial results of IMR-687. Also lower was NeoGenomics (NEO), which fell over 6% after the company filed to sell $200M in stock and $250M in convertible senior notes.
INDEXES: The Dow rose 437.80, or 1.44%, to 30,829.40, the Nasdaq lost 78.17, or 0.61%, to 12,740.79, and the S&P 500 advanced 21.28, or 0.57%, to 3,748.14.
Moderna
+7.25 (+6.65%)
China Telecom
+0.33 (+1.16%)
China Unicom
-0.02 (-0.33%)
China Mobile
-1.65 (-5.62%)
Alibaba
-12.84 (-5.34%)
Tencent
+ (+0.00%)
AmerisourceBergen
+8.43 (+8.63%)
Walgreens Boots Alliance
+1.89 (+4.59%)
UnitedHealth
+14.85 (+4.31%)
Change Healthcare
+5.475 (+30.01%)
Tesla
+20.72 (+2.82%)
DraftKings
+1.45 (+3.05%)
Genetron
+2.01 (+14.73%)
Danimer Scientific
+2.2 (+9.71%)
Imara
-9.05 (-38.12%)
NeoGenomics
-3.47 (-6.33%)