Equity futures were modestly firmer in early trading as the sharp declines yesterday provided an opportunity for dip buyers, although that bargain shopping did not support the major averages for long after the open. Near midday, the indexes are mixed, with the Nasdaq getting support from the big semiconductor M&A deal announced this morning.
ECONOMIC EVENTS: In the U.S., advance durable goods orders jumped 1.9% in September, strongly beating expectations. The Conference Board consumer confidence index declined slightly to 100.9 in October from 101.3 in September. The Richmond Fed manufacturing index climbed 8 points to 29 in October to hit a fresh all-time high. The FHFA house price index increased 1.5% to 297.7 in August. The Case Shiller 20-city home price index climbed 1.1% to 229.4 in August.
TOP NEWS: Shares of Caterpillar (CAT) are 3% lower near noon despite the fact that the company reported better than consensus adjusted earnings and sales in the third quarter. The heavy machinery maker did not offer full year guidance, although it said it expects sales and end user demand to improve sequentially in the fourth quarter. Caterpillar Chairman and CEO Jim Umpleby added: "Our third-quarter results largely aligned with our expectations, and we're encouraged by positive signs in certain industries and geographies."
Shares of 3M (MMM) are 1% lower at midday following the company's report of better than expected Q3 sales and earnings. Similarly to Caterpillar, 3M said it "continues to believe it is prudent to not provide guidance" given the "continued evolving and uncertain impact of the COVID-19 pandemic."
In other earnings news, it was a busy day for the pharmaceuticals sector. Share of Merck (MRK) and Pfizer (PFE) are little changed at midday following their quarterly updates. Meanwhile, Eli Lilly (LLY) shares are down 5% after the company reported results and also announced last night that the ACTIV-3 trial run by the NIAID was stopped with no additional SARS-CoV-2 patients in the hospitalized setting to receive bamlanivimab, the company's antibody designed to treat COVID-19.
In M&A news, AMD (AMD) announced an agreement to acquire Xilinx (XLNX) in an all-stock transaction valued at $35B, or $143 per Xilinx share. Current AMD stockholders will own approximately 74% of the combined company on a fully diluted basis, while Xilinx stockholders will own approximately 26% after the closing of the deal, which is expected by the end of calendar year 2021.
In spinoff news, AIG (AIG) announced plans to separate its Life & Retirement business from AIG "in a way that maximizes shareholder value and establishes two independent, market leading companies. In addition, DTE announced a decision to pursue a spin-off of the DTE Midstream business from DTE Energy (DTE). Elliott Management, which manages funds that collectively own a significant interest in DTE Energy, said it is "supportive" of DTE's plan to spin-off the business and take "steps to unlock significant value."
In IPO news, Airbnb (AIRB) announced today that it intends to list its common stock on Nasdaq.
MAJOR MOVERS: Among the noteworthy gainers was Exact Sciences (EXAS), which rose 20% after the company agreed to acquire Thrive Earlier Detection for up to $2.15B and reported quarterly results. Also higher after reporting quarterly results was Harley-Davidson (HOG), which gained 26%.
Among the notable losers was Chegg (CHGG), which slid 10% after reporting quarterly results and providing guidance for the fourth quarter and fiscal 2020. Also lower after reporting quarterly results were Amkor (AMKR) and JetBlue (JBLU), which fell a respective 14% and 5%.
INDEXES: Near midday, the Dow was down 48.02, or 0.17%, to 27,637.36, the Nasdaq was up 76.04, or 0.67%, to 11,434.98, and the S&P 500 was up 3.80, or 0.11%, to 3,404.77.
Caterpillar
-4.425 (-2.71%)
Eli Lilly
-7.57 (-5.34%)
Pfizer
-0.085 (-0.22%)
Merck
+0.4 (+0.51%)
Xilinx
+10.69 (+9.33%)
AMD
-2.76 (-3.36%)
3M
-1.935 (-1.16%)
AIG
+0.225 (+0.72%)
DTE Energy
+2.58 (+2.07%)
Use ABNB
+ (+0.00%)
Exact Sciences
+21.24 (+19.93%)
Harley-Davidson
+7.81 (+26.96%)
Chegg
-8.37 (-9.65%)
Amkor Technology
-1.85 (-13.80%)
JetBlue
-0.57 (-4.53%)