The major averages are rising to record high levels following data showing retail sales massively exceeded most estimates in March and that jobless claims have fallen to post-pandemic lows.
ECONOMIC EVENTS: In the U.S., initial jobless claims tumbled 193,000 to 576,000 in the week ended April 10, marking a new post-virus low. Retail sales surged 9.8% in March, and climbed 8.4% excluding autos, making for the largest increases since the record gains in May. The Empire State manufacturing index popped 8.9 points to 26.3 in April, which was much better than forecast, while the Philly Fed index also increased to a better than expected 50.2 reading. Industrial production rebounded 1.4% in March and capacity utilization increased to 74.4% from 73.4%. The NAHB housing index edged up 1 tick to an 83 reading in April. Business inventories rose 0.5% in February and sales dropped 1.9%.
TOP NEWS: Shares of Dell Technologies (DELL) are 9% higher at midday after the company announced an agreement on the planned spin-off of its 81% equity ownership interest in VMware (VMW). At the transaction closing, VMware will distribute a special cash dividend of $11.5B-$12B to all VMware shareholders, including Dell Technologies. Based on Dell Technologies' current 80.6% ownership in VMware, Dell Technologies would receive approximately $9.3B-$9.7B and intends to use the net proceeds to pay down debt, "positioning the company well for Investment Grade ratings," Dell said.
In earnings news, financials were the headliners for a second straight day as Citi (C), Bank of America (BAC) and BlackRock (BLK) were among those issuing updates on their first quarter results. In addition to reporting earnings, Citi announced plans to pursue exits from consumer franchises in thirteen markets and focus its Global Consumer Bank presence in Asia and EMEA on four wealth centers - Singapore, Hong Kong, the UAE and London.
Among notable earnings reporters outside of the financial space, UnitedHealth (UNH) is up 3% following its quartery results, while PepsiCo (PEP) is little changed and Delta (DAL) has fallen about 3%.
In M&A news, Thermo Fisher Scientific (TMO) announced an agreement to acquire PPD, Inc. (PPD) for $47.50 per share for a total cash purchase price of $17.4B plus the assumption of approximately $3.5B of net debt. The transaction is expected to be "immediately and significantly accretive to Thermo Fisher's adjusted EPS, adding $1.40 in the first 12 months after close," Thermo Fisher said.
In COVID-19 news, Merck (MRK) announced the discontinuation of development of MK-7110 for the treatment of hospitalized patients with COVID-19, citing the expected timeline, "technical, clinical and regulatory uncertainties," the availability of a number of medicines for patients hospitalized with COVID-19, and "the need to concentrate Merck's resources on accelerating the development and manufacture of the most viable therapeutics and vaccines."
MAJOR MOVERS: Among the noteworthy gainers was Weingarten Realty (WRI), which rose 10% after agreeing to merge in a stock and cash deal with Kimco Realty (KIM). Also higher was Wipro (WIT), which gained 6% after reporting quarterly results.
Among the notable losers was GreenBox (GBOX), which declined 29% after Bear Cave issued a cautious report on the stock. Also lower was Virgin Galactic (SPCE), which fell 13% after Virgin Investments sold a 5.58M share stake in Virgin Galactic for $150M.
INDEXES: Near midday, the Dow was up 281.83, or 0.84%, to 34,012.72, the Nasdaq was up 159.27, or 1.15%, to 14,017.11, and the S&P 500 was up 42.42, or 1.03%, to 4,167.08.
