The major averages are stronger at midday as risk appetites have been whetted by the announcement yesterday of a planned $2.25T infrastructure spending program in the U.S. A decline in yields as inflation fears ease a bit is also supporting equities. The S&P 500 has risen above 4,000 to hit an all-time intraday high while the Dow and Nasdaq indexes are also seeing gains ahead of the long Easter weekend.
ECONOMIC EVENTS: In the U.S., initial jobless claims rose 61,000 to 719,000 in the week ended March 27. Markit's manufacturing PMI rose to 59.1 in the final print for March, up 0.5 points from February's 58.6 and up a tick from the 59.0 preliminary reading. The ISM manufacturing index rose to a 37-year high of 64.7 in March, marking another big beat. Construction spending beat estimates with a 0.8% weather-led February drop.
TOP NEWS: Shares of Micron (MU) are 4% higher near noon after the company's Q2 results topped the pre-announced range and guided well above consensus due to strong demand across all end markets. In addition, The Wall Street Journal's Cara Lombardo and Dana Cimilluca reported last night, citing people familiar with the matter, that Micron and Western Digital (WDC) are each weighing a potential deal for Kioxia Holdings that could value the Japanese semiconductor company at approximately $30B.
On the other side of the earnings reaction coin, CarMax (KMX) shares are 7% lower after the company reported Q4 results and announced it has signed a definitive agreement to acquire the remaining shares of Edmunds it does not already own for a purchase price that implies an enterprise value of $404M.
In COVID-19 news, Pfizer (PFE) and BioNTech SE (BNTX) announced updated topline results from analysis of 927 confirmed symptomatic cases of COVID-19 observed in their pivotal Phase 3 study through March 13, 2021, showing the Pfizer-BioNTech COVID-19 vaccine, BNT162b2, was 91.3% effective against COVID-19, measured seven days through up to six months after the second dose.
In the auto industry, General Motors (GM) announced it sold 642,250 vehicles in the U.S. in the first quarter of 2021, up 4% compared to a year ago. Toyota Motor (TM) reported U.S. sales of 603,066 vehicles, a 21.6% increase on a volume basis and 24.9% increase on a DSR basis, while Nissan Group (NSANY) announced total U.S. first-quarter sales of 285,553 units, an increase of 10.8% versus the prior year.
MAJOR MOVERS: Among the noteworthy gainers was Velodyne Lidar (VLDR), which rose 15% after the company announced a multi-year agreement with AGM Systems, which provides hardware and software technology for the collection, processing and analysis of air and mobile mapping data. Also higher was QuantumScape (QS), which gained 11% after announcing it has successfully met the technical milestone that was a condition to close for the investment of an additional $100M by Volkswagen Group of America Investments (VWAGY).
Among the notable losers was Emergent BioSolutions (EBS), which dropped 14% after The New York Times reported that employees at a Baltimore plant manufacturing two coronavirus vaccines accidentally conflated the vaccines' ingredients several weeks ago, ruining approximately 15M doses of Johnson & Johnson's (JNJ) vaccine and forcing regulators to delay authorization of the plant's production lines. The plant is run by Emergent, a manufacturing partner to both J&J and AstraZeneca (AZN), according to the report. Also lower was AbCellera (ABCL), which fell 7% after the company announced agreements to expand its collaboration with Gilead Sciences (GILD), including a multi-year, multi-target antibody discovery collaboration and access to AbCellera's humanized mouse technology.
INDEXES: Near midday, the Dow was up 155.17, or 0.47%, to 33,136.72, the Nasdaq was up 214.50, or 1.62%, to 13,461.37, and the S&P 500 was up 39.00, or 0.98%, to 4,011.89.
