Stocks have slid in morning trading as the yield on the benchmark 10-year Treasury note fell back below 2% following the release of weaker than expected consumer confidence and housing data.
ECONOMIC EVENTS: In the U.S., the Case Shiller 20-city home price index rose 0.8% in April to 215.68. The FHFA home price index for April was up 0.4% to 274.7. New home sales declined 7.8% to a 626,000 pace in May, which was a big disappointment after falling 3.7% to a 679,000 pace in the month prior. The Richmond Fed manufacturing index dipped 2 points to back to 3 in June. The Conference Board's Consumer Confidence Index declined 9.8 points to 121.5 in June, which was considerably weaker than expected.
TOP NEWS: Allergan (AGN) has surged 26.5% to about $164 per share in early trading after the drugmaker and AbbVie (ABBV) announced a definitive agreement under which AbbVie will acquire Allergan in a cash and stock deal for an equity value of roughly $63B. Upon completion of the deal, AbbVie will continue to be led by Richard Gonzalez as chairman and CEO. Commenting on the transaction in a conference call, AbbVie said that the acquisition is a "transformative" deal that will have a "profound impact" on the company's growth story. AbbVie shares are down over 15% after the news.
Meanwhile, Fox Business Network's Charles Gasparino reported via Twitter that T-Mobile (TMUS) and Sprint (S) executives believe "today could be the day" for the U.S. Department of Justice's antitrust division merger announcement, "but they've been saying that for days now and Dish Network's (DISH) Charle Ergen is involved."
On the earnings front, shares of Lennar (LEN) were 5% lower near noon despite the company having reported better than expected quarterly results. Of note, executive chairman Stuart Miller said that the "well-documented" market pause in the second half of 2018 set the stage for "more moderate home price increases and lower interest rates which stimulated both affordability and demand, leading homebuyers back to the market."
MAJOR MOVERS: Among the noteworthy gainers was Pyxus (PYX), which jumped 26% after Imperial Capital analyst Mary Ross Gilbert initiated the stock with an Outperform rating and $71 price target, citing her view of the potential of the company to be a fast growing franchise for years given its combination of cultivation, extraction and e-liquids capabilities. Also higher was GrubHub (GRUB), which gained 5% after Citi analyst Mark May upgraded the stock to Buy from Neutral annd increased his price target on the shares to $91 from $75.
Among the notable losers was Aldeyra (ALDX), which slid 18% after reporting statistical significance was not achieved for endpoints in its SOLACE trial. Also lower was Brighthouse Financial (BHF), which fell 14% after Credit Suisse analyst Andrew Kligerman downgraded shares to Underperform and Goldman Sachs analyst Alex Scott downgraded the stock to Sell.
INDEXES: Near midday, the Dow was down 52.19, or 0.20%, to 26,675.35, the Nasdaq was down 53.67, or 0.67%, to 7,952.03, and the S&P 500 was down 10.63, or 0.36%, to 2,934.72.
