The major averages are mixed at midday with the Dow higher and the Nasdaq having given up its early gains. A surge in worries about inflation and central bank policy has eased for the time being as markets approach the close out what has been a somewhat volatile week.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing PMI was 61.5 in the flash reading for May. The May services index came in at 70.1 in the first look, while the composite component was 68.1 after increasing to 63.5 last month. Existing home sales undershot estimates with a 2.7% April drop to a 10-month low pace of 5.85M homes.
TOP NEWS: Shares of Deere (DE) are 3% higher near noon after the company's Q2 sales and earnings beat and net income guidance raise. Deere "closed out the first half of the year on a highly encouraging note," reflecting a "healthy worldwide markets for farm and construction equipment," said chairman and CEO John May.
In other earnings news, Palo Alto Networks' (PANW) April quarter results featured upside to revenue, billings, and EPS, according to Raymond James analyst Adam Tindle. Meanwhile, Jefferies analyst Brent Thill said Palo Alto management on last night's earnings call walked back the potential for a new equity structure, which he called "modestly disappointing." However, Thill believes the company showed "excellent execution" in fiscal Q3 and his sum-of-the-parts analysis "indicates plenty of upside remains," he added. Palo Alto shares are up 6% at midday following last night's report and associated call.
In M&A news, Kansas City Southern (KSU) announced that the company's board determined that the acquisition proposal KCS received from Canadian National Railway (CNI) continues to constitute a "Company Superior Proposal" under KCS's pending merger agreement with Canadian Pacific Railway (CP). Following this determination, KCS terminated the CP merger agreement and entered into a merger agreement with CN. In connection with the termination, KCS paid CP a breakup fee of $700M, which will be reimbursed by CN, the company noted.
AT&T (T) shares are up 1% at midday after two Wall Street analysts issued more bullish views on the stock this morning. UBS analyst John Hodulik upgraded AT&T to Buy from Neutral with a price target of $35, arguing that the company's simplified structure post the media deal and improved visibility create an attractive risk/reward profile following the recent selloff. Meanwhile, New Street analyst Jonathan Chaplin upgraded AT&T to Buy from Neutral with a "tactical" six-month target price target of $35. While he still has "reservations" about AT&T's long-term prospects, the dividend cut coupled with higher capex post the media transaction is positive for long-term value, Chaplin tells investors.
In COVID-19 news, GlaxoSmithKline (GSK) and Vir Biotechnology (VIR) announced that the European Medicines Agency's Committee for Human Medicinal Products issued a positive scientific opinion on the use of sotrovimab for the treatment of adults and adolescents with COVID-19 who do not require oxygen supplementation and who are at risk of progressing to severe COVID-19.
MAJOR MOVERS: Among the noteworthy gainers was Annovis (ANVS), which skyrocketed 220% higher after its Alzheimer's drug showed 30% cognitive improvement in a double-blind, placebo-controlled study. Also higher was Yalla (YALA), which rose 14% after it announced an up to $150M share repurchase program. In addition, Foot Locker (FL) shares gained 3% after the company reported quarterly results.
Among the notable losers was Onconova Therapeutics (ONTX), which declined 14% after announcing initial dosing of the first patient in its Phase 1 trial of ON 123300. Also lower was VF Corp. (VFC), which fell 8% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 225.65, or 0.66%, to 34,309.80, the Nasdaq was down 28.37, or 0.21%, to 13,507.37, and the S&P 500 was up 9.44, or 0.23%, to 4,168.56.
Deere
+9.91 (+2.79%)
AT&T
+0.38 (+1.28%)
Palo Alto Networks
+19.5 (+5.69%)
Vir Biotechnology
+0.14 (+0.31%)
Annovis Bio
+55.27 (+208.72%)
GSK
-0.13 (-0.33%)
Yalla
+2.26 (+14.18%)
Foot Locker
+1.785 (+2.99%)
Onconova
-1.411 (-12.93%)
VF Corp.
-6.39 (-7.53%)