Equity futures extended lower following a much hotter than expected April report on consumer price inflation. The hefty surge in April CPI has added fuel to the fire of existing concerns about the impact of inflation.
ECONOMIC EVENTS: In the U.S., the Consumer Price Index report massively beat estimates, with April gains of 0.8% for the headline rate and 0.9% for the core figure.
TOP NEWS: Domino's Pizza (DPZ) shares were fractionally higher near noon after activist investor Bill Ackman said during an event hosted by The Wall Street Journal that his Pershing Square firm now owns "about 6%" of the pizza delivery chain's stock, having acquired shares after selling the firm's position in Starbucks (SBUX). Ackman said that he started buying Domino's at $330 per share, adding that he views the stock as a "very compelling story." Starbucks shares were nearly 3% lower at midday after the news.
On the earnings front, shares of Electronic Arts (EA) were down 1% after the game maker reported better than expected fourth quarter bookings. EA also provided first quarter and fiscal 2022 earnings and bookings guidance, with the company saying on its quarterly call that it took a "very conservative" view on net bookings due to its acquisitions of Glu Mobile (GLUU) and Codemasters.
In other earnings news, Wendy's (WEN) was down about 1% after the fast food chain reported better than expected Q1 earnings and revenue, with U.S. systemwide sales growth of 13.1% year-over-year in the quarter. In addition, Wendy's also boosted its share repurchase authorization by $50M and raised its quarterly dividend 11%.
In M&A news, Arthur J. Gallagher (AJG) shares were 2% lower near noon after Aon plc (AON) and Willis Towers Watson (WLTW) signed a definitive agreement to sell Willis Re and a set of Willis Towers Watson corporate risk and broking and health and benefits services to Arthur J. Gallagher. These businesses will be divested for a total consideration of $3.57B. "The agreement resolves questions raised by the European Commission and is intended to address certain questions raised by regulators in certain other jurisdictions," Aon and Willis Towers Watson said.
MAJOR MOVERS: Among the noteworthy gainers was Pershing Square Tontine (PSTH), which rose 5% after Pershing Square's Bill Ackman said he's "deeply engaged" in merging Pershing Square Tontine with an iconic business and that he's "cautiously optimistic" a deal for the SPAC can be reached. Also higher were Upstart Holdings (UPST) and fuboTV (FUBO), which gained a respective 6% and 8% after reporting quarterly results.
Among the notable losers was Amarin (AMRN), which declined 5% afer Goldman Sachs analyst Paul Choi downgraded the stock to Sell from Neutral, saying that generic entrants in the U.S. will limit Vascepa's growth ahead of the European launch. Also lower were Array Technologies (ARRY), SelectQuote (SLQT), and Lumentum (LITE), which fell a respective 35%, 20%, and 17% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 480.11, or 1.40%, to 33,789.05, the Nasdaq was down 332.40, or 2.48%, to 13,057.03, and the S&P 500 was down 72.21, or 1.74%, to 4,079.89.
Domino's Pizza
+2.43 (+0.57%)
Starbucks
-2.93 (-2.59%)
Electronic Arts
-2.09 (-1.48%)
Wendy's
-0.24 (-1.05%)
Arthur J. Gallagher
-2.42 (-1.63%)
Aon plc
-2.36 (-0.93%)
Symbol change to WTW
-1.44 (-0.54%)
Pershing Square Tontine Holdings
+1.12 (+4.95%)
Upstart
+6.58 (+7.37%)
FuboTV
+1.83 (+10.43%)
Amarin
-0.195 (-4.22%)
Array Technologies
-8.45 (-33.85%)
SelectQuote
-5.38 (-19.65%)
Lumentum
-13.6 (-16.54%)