The S&P 500 pulled back from a record high after Apple (AAPL) warned of production and demand disruptions due to the novel coronavirus outbreak in China, although gains for some of its megacap tech brethren helped to push the Nasdaq index to a very small gain. Apple suppliers also suffered following the iPhone maker's warning, sending the iShares PHLX Semiconductor ETF (SOXX) down a bit over 1%. While earnings season is winding down, there are still some big names left to report, as was the case this morning with Walmart (WMT). In addition to some more in focus earnings reports, this week will also be highlighted by the release of the minutes of the most recent Federal Reserve meeting and the meeting of the Group of 20 finance ministers and central bank chiefs on the 22-23 in Saudi Arabia.
ECONOMIC EVENTS: In the U.S., the Empire State manufacturing index surged 8.1 points to 12.9 in February, handily beating expectations. The NAHB housing market index fell 1 tick to 74 in February.
TOP NEWS: Shares of Apple fell about 2% after the iPhone maker announced that it will not meet March quarter guidance due to disruptions to its supply chain and weaker than expected demand in China amid the Covid-19 outbreak. Several Wall Street analysts have argued that weakness in Apple shares as a result of the revenue shortfall will prove to be a buying opportunity, as this is seen as most likely a temporary situation that will leave future quarters largely unaffected. However, the news has also weighed down several of Apple's most prominent chip suppliers, including Qualcomm (QCOM), Broadcom (AVGO), Qorvo (QRVO), Skyworks (SWKS), Micron (MU), Western Digital (WDC) and Intel (INTC).
Walmart closed 1.5% higher even after it reported worse than expected earnings and revenue for the holiday quarter, stating that sales leading up to Christmas in its U.S. stores were a little softer than expected. However, CEO Doug McMillon added that the new year has "started off well, and we look forward to another strong year."
In M&A news, Franklin Resources (BEN) announced an agreement to acquire Legg Mason (LM) for $50.00 per share of common stock in an all-cash transaction. The company will also assume approximately $2B of Legg Mason's outstanding debt. Following the deal announcement, Legg Mason shares jumped 24% while Franklin shares rose 7%.
Meanwhile, Bloomberg reported that Intel is in talks to sell a business that makes chips for home internet access gear to MaxLinear (MXL). Shares of MaxLinear closed 2% higher following the report.
MAJOR MOVERS: Among the noteworthy gainers was Kroger (KR), which rose 5% after Warren Buffett's Berkshire Hathaway disclosed a stake in the company within its quarterly 13-F filing on Friday. Also higher was Vonage (VG), which gained 18% after reporting quarterly results.
Among the notable losers was Fluor (FLR), which slid 24% after announcing that the SEC is conducting an investigation of the company's past accounting and financial reporting. Also lower was Macy's (M), which fell nearly 4% after its long-term rating was cut to a "junk" level of BB+ by S&P.
INDEXES: The Dow fell 165.89, or 0.56%, to 29,232.19 , the Nasdaq gained 1.57, or 0.02%, to 9,732.74 , and the S&P 500 declined 9.87, or 0.29%, to 3,370.29.
iShares PHLX Semiconductor ETF
-3.79 (-1.43%)
Apple
-5.94 (-1.83%)
Qualcomm
-1.61 (-1.80%)
Broadcom
-6.89 (-2.17%)
Qorvo
-2.77 (-2.61%)
Skyworks
-2.28 (-1.92%)
Micron
-0.75 (-1.28%)
Western Digital
-0.93 (-1.34%)
Intel
-1.14 (-1.69%)
Walmart
+1.78 (+1.51%)
Franklin Resources
+1.685 (+6.92%)
Legg Mason
+9.87 (+24.24%)
MaxLinear
+0.355 (+1.94%)
Kroger
+1.5 (+5.32%)
Bought by ERIC
+1.63 (+17.99%)
Fluor
-4.74 (-24.26%)
Macy's
-0.585 (-3.51%)