Stocks opened sharply higher on the tariff “truce” that was announced by Presidents Trump and Xi following the G20. The market saw its highs shortly after the open and then began to drift lower, cutting its early gains in half. The averages drifted in a narrow range during the afternoon, but closed out with gains of 1% or more by the end of the session. Meanwhile, WTI crude oil prices rose 4% as OPEC nations get set to discuss production cuts and Qatar is reportedly exiting the cartel.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing index fell to 55.3 in the final November reading, down from 55.7 in October and a 55.4 preliminary figure. The ISM manufacturing index rebounded 1.6 points to 59.3 in November, which was better than forecast. In energy news, oil prices rebounded on the trade news, Russia confirming its cooperation with the Saudis to manage output, and Qatar indicating it will withdraw from OPEC at the start of the year. In trade news, CNBC's Eamon Javers reported that National Economic Council director Larry Kudlow told reporters on a call that the clock for the 90-day trade truce between the U.S. and China starts on January 1, 2019. In addition, Reuters reported that President Trump has appointed U.S. Trade Representative Robert Lighthizer to oversee the new round of trade negotiations with China.
COMPANY NEWS: GlaxoSmithKline (GSK) announced an agreement to acquire Tesaro (TSRO) for $5.1B in cash, or $75 per share. Shares of Tesaro jumped 58.5% to $73.50 following the deal announcment, while Glaxo shares trading in New York fell 8%.
In other M&A news, Nexstar Media Group (NXST) announced an agreement to acquire all outstanding shares of Tribune Media (TRCO) for $46.50 per share in a cash transaction that is valued at $6.4B including the assumption of Tribune's outstanding debt. Nexstar shares rose about 7% in reaction to the deal, while Tribune closed 12% higher near $45 per share.
Bloomberg reported that the federal judge who has been asked to sign off on the government's decision to approve CVS Health's (CVS) acquisition of insurer Aetna (AET) ordered CVS to defend the consummation of the deal. The judge indicated he may ask that integration of the companies be halted pending his decision, according to Reuters.
MAJOR MOVERS: Among the noteworthy gainers was Global Blood Therapeutics (GBT), which rose 48% after it announced FDA acceptance of its voxelotor proposal. Also higher was Cronos Group (CRON), which gained 11% after Reuters and the Financial Times said that Altria (MO) has held early talks to buy the Canadian cannabis producer.
Among the notable losers was Agios Pharmaceuticals (AGIO), which slid 14% after it presented data from a Phase 1 study evaluating ivosidenib or enasidenib in combination with standard induction and consolidation chemotherapy in certain patients with newly diagnosed acute myeloid leukemia. Also lower was Take-Two (TTWO), which fell 6% amid concerns surrounding the in-game economy of its multiplayer game "Red Dead Online."
INDEXES: The Dow rose 287.97, or 1.13%, to 25,826.43, the Nasdaq gained 110.98, or 1.51%, to 7,441.51, and the S&P 500 advanced 30.20, or 1.09%, to 2,790.37.
