Stocks have been sharply lower since the start of trading after President Trump tweeted over the weekend that "China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods [and the] 10% will go up to 25% on Friday." He added that the trade deal talks with China continue, "but too slowly, as they attempt to renegotiate. No!" China's negotiating team will still visit Washington as planned this week, according to media reports, though there are now questions about whether Vice Premier Liu He will be part of the delegation coming to the U.S. Following Trump's tariff threat, the major averages have all fallen roughly 1%.
ECONOMIC EVENTS: In the U.S., no economic data of note was released.
TOP NEWS: Occidental Petroleum (OXY) announced what it described as a "revised and significantly enhanced superior proposal" to acquire Anadarko Petroleum (APC) for $76 per share, comprised of $59 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock. Anadarko will likely deem Occidental's revised takeover bid superior to Chevron's (CVX) by the end of today, starting the four-day match clock on Chevron's bid, accoring to CNBC's David Faber, citing people close the situation.
In other M&A news, shares of Sinclair Broadcast (SBGI) have surged after the company announced on Friday night that it had agreed to acquire 21 regional sports networks from Walt Disney (DIS) in a transaction that ascribes a total enterprise value to the RSNs equal to $10.6B, reflecting a purchase price of $9.6B after adjusting for minority equity interests. Following the announcement, B. Riley FBR analyst Barton Crockett upgraded Sinclair to Buy, saying the deal looks "like a home-run," while his peers at Stephens and Wolfe Research also raised their price targets on the stock, citing the RSN win.
Over the weekend, Berkshire Hathaway's (BRK.A) Warren Buffett told reporters at his firm's annual meeting that Kraft Heinz's (KHC) auditor, PwC, has not signed off on the company's annual report, according to CNBC. "They have to explain why they haven't signed off, but they haven't signed off...There's something going on," Buffett said. This morning, Kraft Heinz said it has reached a determination to restate the company's consolidated financial statements and related disclosures for the years ended December 30, 2017 and December 31, 2016 as a result of the findings from a company investigation, which identified that several employees in the procurement area engaged in misconduct. The company has recorded adjustments to correct prior period misstatements that increase the total cost of products sold in prior financial periods, "which the company does not believe constitute a quantitatively material misstatement to any individual period," Kraft Heinz stated.
MAJOR MOVERS: Among the noteworthy gainers was Aquantia (AQ), which surged 36% after it agreed to be acquired by Marvell (MRVL) for $13.25 per share in cash. Marvell shares were 1.5% lower after the news. Also higher was ImmunoGen (IMGN), which gained 18% after analysts from Cowen and H.C. Wainwright upgraded the stock following its Q1 earnings report.
Among the notable losers was Affiliated Managers (AMG), which slid 11% after reporting quarterly results, agreeing to acquire an equity interest in Garda Capital Partners, and announcing the departure of CEO Nathaniel Dalton. Also lower after reporting quarterly results was PetMed Express (PETS), which fell 8%.
INDEXES: Near midday, the Dow was down 246.55, or 0.93%, to 26,258.40, the Nasdaq was down 77.43, or 0.95%, to 8,086.56, and the S&P 500 was down 29.30, or 0.99%, to 2,916.34.
