The major averages have continued to improve as the session moves on, with the Dow, S&P 500 and Nasdaq all higher near noon. Trading remains a bit choppy as the market weighs a variety of factors, including the ongoing rollout of vaccines, the swings in reported infections, the tightening of restrictions in Europe, and uncertainties over China relations. Markets are also keeping a close eye on prospects for yet another multi-trillion stimulus package from Washington, but positioning and month and quarter-end portfolio rebalancing may end up being the largest influencers of trading today.
ECONOMIC EVENTS: In the U.S., personal income dropped 7.1% in February, while spending fell 1.0%. The University of Michigan consumer sentiment index reading improved to 84.9 in the final March print, stronger than expected and replacing the 83.0 figure in the preliminary report.
TOP NEWS: MSG Entertainment (MSGE) shares were 10% lower near noon after the company agreed to acquire MSG Networks (MSGN) in an all-stock, fixed exchange ratio transaction. The merger is expected to be tax-free for both MSG Entertainment and MSG Networks and their stockholders. Upon the closing of the transaction, MSG Networks stockholders would receive 0.172 shares of MSG Entertainment Class A or Class B common stock for each share of MSG Networks Class A or Class B common stock they own. The exchange ratio is approximately 4% above the ratio of the unaffected closing stock prices of the two companies on March 10, the last trading day before a press report speculated on a potential transaction, the companies said. MSG Networks shares are down about 10% after the news as well.
Shares of L Brands (LB) were 6% higher after the company increased its first quarter earnings guidance due to "improved sales trends," which the company believes are mostly driven by "unusual shifts in consumer spending patterns, resulting from government stimulus payments, a relaxation of COVID-19 restrictions and other factors."
In earnings news, SAIC (SAIC) shares fell 18% after the company reported lower than expected revenue for the fourth quarter and provided downbeat guidance for fiscal 2022.
Meanwhile, shares of special purpose acquisition company BowX Acquisition (BOWX) have jumped 9% after the company announced a merger agreement with WeWork that will result in WeWork becoming a publicly listed company. The transaction values WeWork at an initial enterprise value of approximately $9B.
Additionally, Reuters reported that Robinhood (HOOD) is creating a platform to "democratize" initial public offerings, including its own, in a plan that would let users acquire shares alongside Wall Street funds.
MAJOR MOVERS: Among the noteworthy gainers was MagnaChip (MX), which surged 27% higher after entering into a $1.4B take private deal with Wise Road Capital. Also higher was Root (ROOT), which gained 13% following positive comments on the stock from Citron Research's Andrew Left.
Among the notable losers was Vuzix (VUZI), which declined 21% after a 4.146M share spot secondary offering priced at $20.50 per share. Also lower was Gan Limited (GAN), which fell 17% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 166.01, or 0.51%, to 32,785.49, the Nasdaq was up 55.58, or 0.43%, to 13,033.26, and the S&P 500 was up 26.63, or 0.68%, to 3,936.15.
Robinhood
+ (+0.00%)
MSG Entertainment
-9.14 (-9.75%)
MSG Networks
-1.68 (-9.66%)
L Brands
+3.21 (+5.40%)
SAIC
-16.9 (-17.65%)
BowX Acquisition
+0.88 (+9.03%)
MagnaChip
+5.67 (+27.79%)
Root
+1.88 (+14.62%)
Vuzix
-5.64 (-21.44%)
Gan Limited
-3.97 (-17.20%)