The major averages are weaker at midday, which may reflect a bit of profit taking after the bounce on Wall Street in the second half of last week. The Nasdaq rallied 2.3%, the S&P 500 climbed 1.5% and the Dow improved 1.1% on Friday to end a volatile week that saw inflation fears sink stocks in the first half of the week and then saw a big bounce in the indexes on Thursday and Friday.
ECONOMIC EVENTS: In the U.S., the Empire manufacturing index dipped 2.0 points to 24.3 in May. The NAHB housing market index was unchanged at 83 in May, as expected.
TOP NEWS: AT&T (T) and Discovery (DISCA) confirmed that they have agreed to combine WarnerMedia's entertainment, sports and news assets with Discovery's nonfiction and international entertainment and sports businesses to create a standalone global entertainment company. Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive $43B in a combination of cash, debt securities, and WarnerMedia's retention of certain debt, and AT&T's shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29% of the new company. Shares of AT&T (T) are 1% higher near noon after the deal announcement, while class A shares of Discovery initially rose but are now 3% lower. Other streaming TV providers are also dipping following the news, with Netflix (NFLX) down 2%, Disney (DIS) sliding 3%, ViacomCBC (VIAC) falling 1% and Comcast (CMCSA) down over 4%.
In COVID-19 news, Sanofi (SNY) and GlaxoSmithKline (GSK) announced that their adjuvanted recombinant COVID-19 vaccine candidate "achieved strong rates" of neutralizing antibody responses, in line with those measured in people who have recovered from COVID-19, in all adult age groups in a Phase 2 study with 722 volunteers. The Phase 2 interim results showed 95% to 100% seroconversion following a second injection in all age groups, 18 to 95 years old, and across all doses, with "acceptable tolerability and with no safety concerns," they said. A global pivotal Phase 3 study is expected to start in the coming weeks.
In SPAC news, Redbox (RDBX) announced that it has entered into a definitive agreement to combine with Seaport Global Acquisition (SGAM), a publicly traded special purpose acquisition company. The transaction will result in Redbox becoming a publicly traded company with an enterprise value of $693M. Upon closing, Redbox's common stock is expected to trade on Nasdaq under the ticker symbol RDBX.
MAJOR MOVERS: Among the noteworthy gainers was Apellis (APLS), which rose 19% after announcing that the FDA has approved EMPAVELI for treatment of adults with paroxysmal nocturnal hemoglobinuria. Also higher was Lordstown Motors (RIDE), which gained 15% after it announced plans for "Lordstown Week," an event at the company's Ohio headquarters, hosted by the Lordstown Motors executive team and featuring factory tours, presentations and test drives of the Lordstown Endurance.
Among the notable losers was Airbnb (ABNB), which declined 6% as an IPO lock-up period expired, releasing millions of shares from selling restrictions. Also lower was iBio (IBIO), which fell 6% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 198.57, or 0.58%, to 34,183.56, the Nasdaq was down 125.99, or 0.94%, to 13,303.98, and the S&P 500 was down 26.16, or 0.63%, to 4,147.69.
AT&T
+0.41 (+1.27%)
Now WBD
-1.23 (-3.45%)
Netflix
-7.7 (-1.56%)
Disney
-4.22 (-2.43%)
Use PARA
-0.38 (-0.98%)
Comcast
-2.56 (-4.36%)
Sanofi
+0.75 (+1.42%)
GSK
+0.52 (+1.33%)
Redbox
+
Seaport Global Acquisition
+0.09 (+0.91%)
Discovery Inc.
+1.69 (+5.50%)
Apellis
+9 (+20.34%)
Lordstown Motors
+1 (+13.64%)
Airbnb
-8.83 (-6.27%)
iBio
-0.1 (-6.76%)