The major averages are weaker at midday, but have improved from their worst levels overnight. The Dow was indicated down as much as 2% overnight, but is only fractionally lower near noon, as are the S&P and Nasadaq. Nike shares are sliding after the firm's year old comments regarding concerns over cotton sourced from Xinjiang are in the spotlight following the announcement of western sanctions on China.
ECONOMIC EVENTS: In the U.S., Q4 GDP growth was revised up to a 4.3% rate in the third look at the data, up from 4.1% in the prior report. Initial jobless claims fell 97,000 to 684,000 in the week ended March 20.
TOP NEWS: Shares of Nike (NKE) are 4% lower near noon after Bloomberg reported that the company and Hennes & Mauritz (HNNMY) are facing potential boycotts in China related to accusations about forced labor in Xinjiang.
Also lower were shares of Rite Aid (RAD), which fell 21% after the pharmacy operator cut its FY21 revenue and adjusted EBITDA guidance to reflect what it calls a "historically soft cough, cold and flu season" in the fourth quarter. The company also cited the "continued impacts of COVID" on the deferral of elective procedures and related acute prescription volume and selling, general and administrative expenses.
Meanwhile, shares of Darden (DRI) are up 5% near noon after the owner of the Olive Garden and LongHorn Steakhouse brands reported better than expected sales and earnings for its fiscal third quarter.
In M&A news, II-VI (IIVI) announced that it is entering into a definitive agreement to acquire all outstanding Coherent (COHR) shares in a cash and stock transaction. Under the terms of the transaction, Coherent shareholders will receive $220.00 in cash and 0.91 of a share of II-VI common stock for each Coherent share. Meanwhile, Lumentum (LITE) announced that Coherent has provided notice of termination of their previously announced amended definitive merger agreement entered into on March 9. Pursuant to the terms of the agreement, Coherent is required to pay a $217.6M termination fee to Lumentum.
In COVID-19 news, a White House official who spoke to NBC News reportedly said that President Joe Biden plans to announce a new goal of 200 million vaccination shots within his first 100 days in office after having already topped his prior 100 million shot target. In addition, AstraZeneca (AZN) said "positive high-level results" from the primary analysis of the Phase III trial of AZD1222 in the U.S. have confirmed vaccine efficacy consistent with the pre-specified interim analysis announced on March 22. The primary analysis is pre-specified in the protocol and will be the basis for a regulatory submission for Emergency Use Authorization to the Food and Drug Administration in the coming weeks, AstraZeneca said.
MAJOR MOVERS: Among the noteworthy gainers was Certara (CERT), which rose 10% after a 10M share secondary priced at $25. Also higher was Curis (CRIS), which gained 9% after B. Riley analyst Justin Walsh initiated coverage of the stock with a Buy rating and $19 price target.
Among the notable losers was Evofem (EVFM), which declined 23% after a 17.143M share spot secondary priced at $1.75. Also lower was Evolus (EOLS), which fell 21% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 8.51, or 0.03%, to 32,411.55, the Nasdaq was down 30.68, or 0.24%, to 12,931.21, and the S&P 500 was down 1.04, or 0.03%, to 3,888.10.
Nike
-5.99 (-4.50%)
AstraZeneca
+0.54 (+1.11%)
II-VI
-0.64 (-0.95%)
Coherent
-1.25 (-0.49%)
Lumentum
+6.36 (+8.05%)
Certara
+2.11 (+8.18%)
Curis
+1.08 (+10.47%)
Evofem
-0.56 (-24.09%)
Evolus
-3.34 (-20.27%)