The major averages are modestly firmer at midday as stocks extend yesterday's strong rally amid ongoing enthusiasm about the recovery. The continued vaccine rollout, alongside the pending coronavirus relief package, makes it difficult to remain bearish, while the CPI report came in as expected, making it appear that inflation remains non-threatening to the FOMC and hence the markets, for now. Reports indicate the House is on track to approve a $1.9T coronavirus aid bill by this afternoon, after which it is expected that President Joe Biden will quickly sign the bill to prevent millions of Americans from losing boosted unemployment benefits that are set to expire over the weekend.
ECONOMIC EVENTS: In the U.S., the consumer prices index increased 0.4% in February, while the core reading backing out food and energy rose 0.1%, in line with expectations. On a 12-month basis, CPI accelerated to a 1.7% year-over-year rate, but the ex-food and energy component slipped to 1.3% year-over-year, which remains nowhere near the Fed's inflation goal.
TOP NEWS: Shares of General Electric (GE) were 5% lower near noon after the company announced a deal to combine its GE Capital Aviation Services business, or GECAS, with AerCap Holdings (AER) for a consideration valued at over $30B. After the deal closes, GE intends to use the transaction proceeds and its existing cash sources to reduce debt by approximately $30B, for an expected total reduction of more than $70B since the end of 2018. Along with the announcement, GE provided lower than expected adjusted earnings guidance for fiscal 2021, noting that it sees $3B in non-cash charges in connection with the deal in the first quarter. In addition, GE's board will recommend that shareholders approve a reverse stock split at a ratio of 1-for-8 and a corresponding proportionate reduction in the number of authorized shares of common stock. AerCap shares are down 6% in New York trading after the news.
In other M&A news, Talend (TLND) shares surged 28% higher after the company agreed to be acquired by Thoma Bravo for $66 per share in cash in a deal that values Talend at roughly $2.4B.
Eli Lilly (LLY) announced new data from the randomized, double-blind, placebo-controlled BLAZE-1 Phase 3 study, demonstrating bamlanivimab 700 mg and etesevimab 1400 mg together significantly reduced COVID-19 related hospitalizations and deaths in high-risk patients recently diagnosed with COVID-19.
In other COVID-19 news, NBC News reported that President Joe Biden intends to announced plans to purchase an additional 100M doses of Johnson & Johnson's (JNJ) COVID-19 vaccine, giving the U.S. more than enough supply to vaccinate the entire U.S. population. J&J shares were 1% higher near noon after the news.
MAJOR MOVERS: Among the noteworthy gainers was Affimed (AFMD), which rose 15% after deciding to continue enrollment in the REDIRECT trial, which is evaluating AFM13 as a monotherapy for the treatment of patients with relapsed or refractory CD30-positive peripheral T-cell lymphoma. Also higher United Natural Foods (UNFI), which gained 22% after reporting quarterly results.
Among the notable losers was Comstock Mining (LODE), which declined 10% after Spruce Point issued a short report on the stock. Also lower were Tupperware Brands (TUP) and MultiPlan (MPLN), which fell 22% and 15%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was up 407.87, or 1.28%, to 32,240.61, the Nasdaq was up 79.22, or 0.61%, to 13,153.04, and the S&P 500 was up 31.71, or 0.82%, to 3,907.15.
GE Aerospace
-0.62 (-4.43%)
AerCap
-3.33 (-5.95%)
Johnson & Johnson
+1.5 (+0.95%)
Talend
+14.35 (+27.97%)
Eli Lilly
+1.03 (+0.50%)
Affimed
+0.805 (+14.73%)
United Natural Foods
+6.38 (+21.01%)
Comstock Mining
-0.5 (-11.11%)
Tupperware Brands
-7.25 (-22.38%)
MultiPlan
-1.165 (-14.94%)