Stocks have been weaker since the pre-market session and through the morning hours, but the S&P is not moving far from the unchanged line as investors await more clarity on both the trade fight with China and what the Federal Reserve might do in response to its impact on economic growth. Adding to the caution a bit might be the downbeat tone generally taken by banking CEOs while they have been presenting to investors at an industry conference over the last two days.
ECONOMIC EVENTS: In the U.S., the May Consumer Prices Index report undershot assumptions with 0.1% gains for both the headline and the core readings.
TOP NEWS: Tesla (TSLA) held its annual shareholder meeting on Tuesday, where CEO Elon Musk said there is not a demand problem for the Model 3 and that the company expects to unveil its pickup truck this summer. Commenting on the meeting, Baird analyst Ben Kallo said he believes Tesla's annual meeting was a "positive step" toward rebuilding investor credibility. Not as bullish, his peer at Wedbush added that he still sees Tesla and Musk facing a "fork in the road scenario" with Model 3 demand and that the company needs a "significant rebound" in the Model 3 deliveries this quarter as well as into the back half of 2019 to provide sustained profitability. After starting the session higher, shares of Tesla are down 2% at midday.
Facebook (FB) uncovered emails that appear to show CEO Mark Zuckerberg's connection to potentially problematic privacy practices at the company, The Wall Street Journal reported, citing people familiar with the matter. Within the company, the unearthing of the emails in the process of responding to a continuing federal privacy investigation has raised concerns that they would be harmful to Facebook if they were to become public, one of the sources said. In a statement to the Journal, Facebook said that the company and its executives, "including Mark, at all times strive to comply with all applicable law, and at no point did Mark or any other Facebook employee knowingly violate the company's obligations under the FTC consent order."
Dassault Systemes (DASTY) and Medidata Solutions (MDSO) announced overnight the signing of a definitive agreement for Dassault to acquire Medidata in an all-cash transaction at a price of $ 92.25 per share, representing an enterprise value of $5.8B. Shares of Medidata closed yesterday up $3.96 to $94.75 following media reports indicating that a takeover deal was imminent and the stock has pulled back based on the deal price announced.
MAJOR MOVERS: Among the noteworthy gainers was Immuron (IMRN), which rose 33% after it said that Travelan prevented clinical shigellosis in 75% of treated animals. Also higher was MagnaChip (MX), which gained 13% after reporting quarterly results.
Among the notable losers was Teva (TEVA), which slid 5% after reports that an Oklahoma judge is declining to approve the state's proposed $85M settlement with the company until he is assured it complies with a new law targeting such deals. Also lower was Dave & Buster's (PLAY), which fell 22% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 73.98, or 0.28%, to 25,974.53, the Nasdaq was down 40.36, or 0.52%, to 7,782.21, and the S&P 500 was down 9.44, or 0.33%, to 2,876.28.
