U.S. stocks wavered to a mixed close on Monday as benchmark U.S. Treasury yields backed down from 5% and investors shifted their focus to this week's high profile earnings and closely watched economic data.
Market Snapshot
The Dow Jones Industrial Average fell 190.87 points, or 0.58%, to 32,936.41; the S&P 500 lost 7.12 points, or 0.17%, at 4,217.04; and the Nasdaq Composite added 34.52 points, or 0.27%, at 13,018.33.
Market Movers
Nvidia Corp. (NVDA) is using Arm Holdings Plc (ARM) technology to develop chips that would challenge Intel Corp. (INTC) processors in personal computers, ratcheting up competition between the two semiconductor makers, according to people familiar with the situation. Nvidia gained 3.8%, Arm jumped 4.9% while Intel dropped 3.1%.
Chevron (CVX) reached a deal to buy Hess (HES) in all-stock deal valued at $53 billion, or $171 a share. The total enterprise value of the transaction, including debt, is $60 billion. Chevron shares fell 3.7%, while Hess dropped 1.1% to $161.30.
Tesla (TSLA) was flat. The electric-vehicle maker said capital spending on plants and equipment should exceed $9 billion in 2023, and average $7 billion to $9 billion a year in 2024 and 2025. Wall Street has been modeling just below $9 billion in 2023, but above $9 billion in 2024 and $10 billion in 2025. Tesla also said the Justice Department requested additional information, including subpoenas, from the company as it investigates Tesla’s autopilot technology.
FMC (FMC) dropped 13.2% and was the worst performer in the S&P 500 after the agricultural-sciences company said it was reducing third-quarter revenue guidance to $982 million, below analysts’ estimates of just under $1.2 billion, “primarily due to lower volumes in Latin America as destocking was more severe than anticipated.” FMC also cut its revenue outlook for the fourth quarter and fiscal year.
Roche Holding (RHHBY) agreed to buy Telavant Holdings, a developer of a drug for people suffering from inflammatory bowel disease, from Roivant Sciences (ROIV) and Pfizer (PFE) in a deal worth up to $7.25 billion. The acquisition will give Roche, the Swiss drugmaker, the right to develop, manufacture and commercialize drug candidate RVT-3101 in the U.S. and Japan. Roivant Sciences shares fell 11%. Pfizer shares rose 0.6%.
Textainer Group Holdings (TGH), a shipping-container lessor, agreed to be acquired by infrastructure investor Stonepeak for about $2.1 billion. Textainer shareholders will receive $50 a share in cash; the stock closed at $34.15 on Friday and surged 44.7% to $49.41 on Monday. The deal has an enterprise value of about $7.4 billion including Textainer’s debt.
Okta (OKTA) fell 8.1% after slumping 12% on Friday following the company’s disclosure that a hacker used a stolen credential to access its support system. “The threat actor was able to view files uploaded by certain Okta customers as part of recent support cases,” Okta’s Chief Security Officer David Bradbury said in an online post. Okta’s support system is separate from the production Okta service, which hasn’t been affected. All affected customers have been notified of the incident, the company said.
MGM Resorts (MGM) rose 3.9% and was the top performer in the S&P 500. Shares of the casino operator were initiated with a Buy recommendation at HSBC.
Walgreens Boots Alliance (WBA) rose 3.3% to $21.96. Shares of the drugstore chain were upgraded to Overweight from Neutral at J.P. Morgan and the price target was raised to $30 a share from $27.
EngageSmart (ESMT) reached a deal to be acquired by Vista Equity Partners for $23 a share of $4 billion. EngageSmart stock rose 11.9% to $22.60.
Shares of reAlpha Tech (AIRE) surged 4983.4% in their Nasdaq debut following a direct listing on Monday. The company seeks to "democratize access to short-term rental investments," with artificial intelligence technology called reAlphaBRAIN that helps identify properties that are likely to yield high returns.
Market News
Nvidia to Challenge Intel With Arm-Based Processors for PCs
Nvidia Corp. is using Arm Holdings Plc technology to develop chips that would challenge Intel Corp. processors in personal computers, ratcheting up competition between the two semiconductor makers, according to people familiar with the situation.
Nvidia, whose artificial intelligence accelerator chips already dominate that market, is attempting to make central processing units for PCs, said the people, who asked not to be identified because the matter is private. The CPUs would run Microsoft Corp.’s Windows operating system and go on sale as soon as 2025.
Chevron to Buy Hess Corp for $53 Billion in All-Stock Deal
Chevron has agreed to buy Hess for $53 billion in stock to gain a bigger U.S. oil footprint and a stake in rival Exxon Mobil's massive Guyana discoveries, the latest in a series of blockbuster U.S. oil combinations.
The Chevron deal announced on Monday and a $60 billion acquisition by Exxon earlier this month will add years of oil and gas production to the two top U.S. producers' portfolios, much of it from U.S. shale. And the deals will leave European oil rivals that had shifted their focus to renewable energy further behind in fossil fuels.
Bitcoin Hits Three-Month High, Buoying Crypto Stocks
Bitcoin, the world's largest cryptocurrency, hit a three-month high on Monday, rising 4.73% to $31,420 amid investor enthusiasm about the possibility of a spot bitcoin exchange-traded fund.
The rise in bitcoin sent shares of cryptocurrency and blockchain-related companies such as Coinbase Global and Marathon Digital Holdings up 3.4% and 12.8% respectively. Bitcoin is up more than 18% from the year's low of $26,533 on Oct. 11.
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