Stocks have reacted favorably to a sign that the U.S. may be easing back the pressure on China, as indicated by its softening of restrictions on American companies dealing with handset and electronic equipment maker Huawei. However, President Trump said he would be "very happy" to keep tariffs on, while China warned it would retaliate if U.S. actions undermine Chinese companies' interests, so tensions may have cooled slightly but are still elevated.
ECONOMIC EVENTS: In the U.S., existing home sales slipped 0.4% to a 5.19M rate in April, missing expectations for a strong rebound following a 4.9% drop in March.
TOP NEWS: After the U.S. Commerce Department eased its stance and granted a temporary license for mobile phone companies and internet broadband providers to work with China's Huawei to keep existing networks online, a Google (GOOGL) spokesperson told CNBC in an email that "keeping phones up to date and secure is in everyone's best interests and this temporary license allows us to continue to provide software updates and security patches to existing models for the next 90 days."
Home Depot (HD) said its sales performance in Q1 "came in below expectations," but that it was "pleased with the underlying performance of the core business despite unfavorable weather in February and significant deflation in lumber prices compared to a year ago." Despite the softer than desired sales, the Dow member still reported profit that beat expectations and backed its FY19 earnings outlook. Home Depot shares are down fractionally near noon following its quarterly report.
Two other well-recognized retailers, Kohl's (KSS) and J.C. Penney (JCP), are faring worse following their own earnings, declining 11% and 10%, respectively. Kohl's cut its FY19 adjusted EPS view, stating that "the year has started off slower than we'd like, with our first quarter sales coming in below our expectation." J.C. Penney reported that its comparable sales decreased 5.5% in the first quarter of the year and its losses were worse than expected.
In M&A news, Crane Co. (CR) announced that it has submitted a proposal to acquire Circor (CIR) for $45 per share in cash. Crane CEO Max Mitchell stated that "while we had hoped to complete a transaction privately, the board's rejection of our proposal without comment or discussion led to our decision to make our proposal known to Circor shareholders so they can express their views directly to the Circor board." Following the disclosure of the bid, Crane shares have fallen 3% and Circor shares have jumped 41% to trade near $43 per share.
MAJOR MOVERS: Among the noteworthy gainers was Arrowhead (ARWR), which rose 13% after it was named to join the S&P 600. Also higher was Array BioPharma (ARRY), which gained 17% after its Phase 3 BEACON CRC trial met its primary endpoints.
Among the notable losers was BioCryst (BCRX), which fell 52% after announcing results from the Phase 3 APeX-2 trial that Piper Jaffray analyst Tyler Van Buren said came in below expectations despite the trial achieving its primary endpoint. Also lower was Mallinckrodt (MNK), which dropped 27% after its ARD subsidiary filed suit in federal district court against the Department of Health and Human Services and Centers for Medicare and Medicaid Services.
INDEXES: Near midday, the Dow was up 127.28, or 0.50%, to 25,807.18, the Nasdaq was up 73.96, or 0.96%, to 7,776.33, and the S&P 500 was up 20.93, or 0.74%, to 2,861.16.
