The major averages started the day sharply lower as sentiment was dented by news that a new strain of the virus was discovered in England that is reportedly more transmissible than the original COVID strain. The news from England largely overshadowed the long awaited agreement on a U.S. stimulus package that might have otherwise lifted market sentiment. After weeks of back and forth talks, Congressional leaders reached a deal on roughly $900B of spending to support the economy and the House of Representatives is set to vote on it today. The Dow moved back into the green in the afternoon, helped along by some post-earnings strength in Nike (NKE).
ECONOMIC EVENTS: In the U.S., the Chicago Fed's National Activity index declined 0.74 to a reading of 0.27 for November, which was weaker than expected but not a surprise given the renewed economic difficulties last month driven by the coronavirus.
TOP NEWS: Moderna (MRNA) was in focus after the company's COVID-19 vaccine candidate received emergency use authorization from the U.S. Food and Drug Administration over the weekend. Following the FDA's approval of Emergency Use Authorization for the vaccine, FedEx Express (FDX) will begin transport of the vaccine and kits of supplies for administration of the vaccine, using its FedEx Priority Overnight service supported by FedEx Priority Alert advanced monitoring, the shipper has said.
In other COVID-19 news, Pfizer (PFE) and BioNTech (BNTX) announced that the European Commission has granted a conditional marketing authorization for their COVID-19 vaccine in individuals 16 years or older. The move followed the European Medicines Agency's Committee for Medicinal Products for Human Use positive opinion to authorize the vaccine earlier in the day.
Shares of Lockheed Martin (LMT) were 1.9% lower after the defense contractor announced a definitive agreement over the weekend to acquire Aerojet Rocketdyne (AJRD) for $56 per share in cash, which is expected to be reduced to $51 per share after the payment of a pre-closing special dividend. This represents a post-dividend equity value of $4.6B and a total transaction value of $4.4B including the assumption of net cash. Aerojet shares surged 25.5% after the announcement.
In other M&A news, RealPage (RP) shares jumped 28.8% after the company agreed to be acquired by private equity firm Thoma Bravo in an all-cash transaction that values RealPage at approximately $10.2B, including net debt. Under the terms of the agreement, RealPage stockholders will receive $88.75 in cash per share of RealPage common stock upon closing of the transaction.
On the earnings front, shares of Nike advanced 3.4% after the sneaker and apparel giant reported better than expected second quarter results. In addition, the company raised its fiscal 2021 revenue growth view to up by a low teens percentage from the previous range of up high single digits to low double digits.
Meanwhile, Tesla (TSLA) shares were down 6.5% as the company began trading today as a member of the S&P 500. Amid the index addition, Wedbush analyst Daniel Ives raised his price target on Tesla to $716 from $560, saying he sees a major inflection of electric vehicle demand globally heading into the year end and 2021. Meanwhile, JMP Securities analyst Joseph Osha raised the firm's price target on Tesla (TSLA) to $788 from $516 as he raised his 2025 unit delivery target for the company to 3.05M from 2.5M previously.
MAJOR MOVERS: Among the noteworthy gainers was 500.com (WBAI), which surged 42.4% after announcing its board has proposed the company explore business opportunities in cryptocurrency, and named Xianfeng Yang as CEO and Bo Yu as COO. Also higher was NantKwest (NK), which rose 56.1% after announcing a stock-for-stock merger with Immunity Bio.
Among the notable losers was uniQure (QURE), which dropped 16.2% after announcing that its hemophilia B gene therapy program has been placed on a clinical hold. Also lower was FibroGen (FGEN), which fell 9% after announcing that the FDA has extended the review period of the new drug application for roxadustat for the treatment of anemia of chronic kidney disease by three months.
INDEXES: The Dow rose 37.40, or 0.12%, to 30,216.45, the Nasdaq lost 13.12, or 0.10%, to 12,742.52, and the S&P 500 declined 14.49, or 0.39%, to 3,694.92.
