The major averages are higher in midday trading, with the Nasdaq the leader amid a decline in Treasury yields, led by longer maturities, that is providing support to equities. Rates climbed last week to better than one-year highs, which unnerved Wall Street, with the jitters especially pronounced in technology stocks. While today's reprieve is clearly a welcome development for stocks, strengthening recovery prospects, massive fiscal stimulus, ultra-accommodative Fed policy and increasing discomfort with the inflation outlook remain a tailwind to bond yields, and a source of uncertainty for stocks with the market remaining near record highs.
ECONOMIC EVENTS: In the U.S., the Chicago Fed National Activity index fell 1.84 points to -1.09 in February, which was a much larger slide than anticipated. Existing home sales fell 6.6% to a 6.22M rate in February, which was weaker than expected.
TOP NEWS: Shares of Kansas City Southern (KSU) were on the rise, jumping 12% after the company agreed to be acquired by Canadian Pacific (CP) in a cash and stock transaction representing an enterprise value of roughly $29B, including the assumption of $3.8B of outstanding Kansas City Southern debt. The deal, which has the unanimous support of both boards of directors, values KCS at $275 per share, representing a 23% premium, based on the CP and KCS closing prices on March 19, the companies said. Canadian Pacific shares were 4% lower near noon in New York after the news.
In COVID-19 news, AstraZeneca (AZN) shares rose 3% after the company said its U.S. Phase 3 trial of AZD1222 demonstrated statistically significant vaccine efficacy of 79% at preventing symptomatic COVID-19 and 100% efficacy at preventing severe disease and hospitalization. The news comes just a few days after the European Medicines Agency's safety committee confirmed that the benefits of the vaccine outweigh the risks.
Meanwhile, Reuters reported that Democratic Representative David Cicilline, chairman of the House Judiciary Committee's antirust panel, is preparing to release 10 or more small pieces of legislation targeting Big Tech companies. Releasing many smaller bills is intended to lower the opposition from tech companies and their lobbyists towards any one legislation, a source told Reuters. Last October, the subcommittee, under Cicilline's leadership, released a 449-page report detailing the abuses of market power by companies such as Apple (AAPL), Amazon (AMZN), Google (GOOG;GOOGL), and Facebook (FB).
Additionally, ironSource announced that it entered into a definitive agreement to merge with special purpose acquisition company Thoma Bravo Advantage (TBA). The transaction values ironSource at a pro forma equity value of $11.1B, and is supported by a $1.3B oversubscribed Class A ordinary share PIPE led by an affiliate of Thoma Bravo, as well as investments from Tiger Global Management, Counterpoint Global, Nuveen, Hedosophia, Wellington Management, The Baupost Group, and certain funds managed by Fidelity Investments Canada ULC and other institutional investors.
MAJOR MOVERS: Among the noteworthy gainers was Catalyst Pharmaceuticals (CPRX), which rose 7% after announcing a $40M share repurchase program. Also higher was Box (BOX), which jumped 7% after Reuters said the company is exploring a sale amid pressure from activist hedge fund Starboard Value.
Among the notable losers was Odonate Therapeutics (ODT), which dropped 78% after concluding that the clinical data package for tesetaxel is unlikely to support FDA approval and announcing it will wind down the operations of the company. Also lower was RLX Technology (RLX), which fell 45% following an announcement from a Chinese regulator regarding stricter standards in the country for electronic cigarettes.
INDEXES: Near midday, the Dow was up 43.85, or 0.13%, to 32,671.82, the Nasdaq was up 192.61, or 1.46%, to 13,407.85, and the S&P 500 was up 28.19, or 0.72%, to 3,941.29.
KSU
+
Canadian Pacific Kansas City
-14.98 (-3.94%)
AstraZeneca
+1.51 (+3.07%)
Apple
+2.67 (+2.23%)
Amazon.com
+36.35 (+1.18%)
Alphabet
-1.23 (-0.06%)
Alphabet
+2.34 (+0.12%)
Ticker changed to META
+6.21 (+2.14%)
Thoma Bravo Advantage
+ (+0.00%)
Catalyst Pharmaceuticals
+0.3 (+6.88%)
Box
+1.55 (+6.87%)
Odonate Therapeutics
-14.89 (-78.33%)
RLX Technology
-8.515 (-43.75%)