Stocks ended the week lower after the U.S. government made tax rule changes that derailed what would have been the biggest pharmaceutical merger in history and sued to block another planned mega-merger in the oil & gas services space.
MACRO NEWS: The Federal Reserve released the minutes from the March FOMC meeting, during which a number of its members expressed that "a cautious approach to raising rates would be prudent" and that "raising the target range as soon as April would signal a sense of urgency they did not think appropriate," arguing that economic headwinds "were likely to subside only slowly." In other central bank news, India's central bank lowered its key interest rate 25 basis points to 6.5%, as widely expected, while the Reserve Bank of Australia held rates unchanged...
In the U.S., factory orders dropped 1.7% in February, as expected. Excluding transportation orders, factory orders were down 0.8%, versus expectations for them to be down 0.5%. Durable goods orders dropped 3% in February, versus expectations for them to be down 2.8%. Excluding transportation, durable goods orders were down 1.3%, which was worse than the expectation for them to decline 1%.
The trade deficit widened 2.6% to $47.1B in February from a revised $45.9B in January. Markit's services PMI bounced 1.6 points to 51.3 in March, which was a tick higher than the 51.2 reading that was expected. ISM's non-manufacturing index rose 1.1 points to 54.5 in March, topping the consensus forecast for a 54.2 reading.
The JOLTS report showed job openings fell 159,000 to 5.45M in February, versus expectations for 5.49M openings. Consumer credit grew by $17.2B in February, versus the $14B that was expected. Wholesale sales declined 0.2% in February, while inventories fell 0.5%...
In Europe, unemployment in the shared currency area fell to its lowest level since 2011, coming in at 10.3% in February. Markit's final look at the composite Purchasing Managers Index for the shared-currency zone rose to 53.1 in March, though that was below the initial reading of 53.7 for the month that was previously reported.
Retail sales in eurozone rose 0.2% month-on-month in February, topping economists' expectation for a flat monthly reading. Germany's industrial production came in better than expected, dropping only 0.5% month-over-month, versus the 1.8% decline that was forecast. German exports rose 1.3% in February compared to the prior month, versus expectations for them to have grown 0.5%, while its imports rose 0.4%, versus the consensus forecast for a decline of 0.3%...
In Asia, the Caixin China services purchasing managers index came in at 52.2 for March, up from 51.2 in February.
COMPANY NEWS: After the Treasury Department unveiled new rules to combat tax inversions, Pfizer (PFE) and Allergan (AGN) mutually agreed to terminate their merger. In connection with the termination, Pfizer will pay Allergan $150M for reimbursement of expenses associated with the transaction...
The Department of Justice filed a civil antitrust lawsuit seeking to block Halliburton's (HAL) proposed acquisition of Baker Hughes (BHI), alleging that the transaction" threatens to eliminate competition, raise prices and reduce innovation in the oilfield services industry." In response, Halliburton and Baker said they intend to "vigorously contest" the Department of Justice's effort...
Virgin America (VA) soared more than 40% higher on Monday after Alaska Air (ALK) agreed to acquire the rival airline for $57 per share in cash for a total value of roughly $4B. In other M&A news, Brocade (BRCD) agreed to acquire Ruckus Wireless (RKUS) in a cash and stock transaction that values Ruckus at a price of $14.43 per common share, or approximately $1.5B, based on the closing price of Brocade's stock on April 1...
Shares of World Wrestling Entertainment (WWE) spent much of Monday's session in positive territory after the company announced that its "WrestleMania 32" event set a new attendance record of 101,763. However, the stock reversed lower and finished the day in the red after the company reported statistics on the subscriber growth for its WWE Network...
Twitter (TWTR) struck a deal to stream ten of next fall's Thursday Night Football games. The company and the NFL did not announce terms of their deal, though people familiar with the matter told Re/code that Twitter paid less than $10M for the ten game package...
Disney (DIS) shares slipped after the media giant confirmed that COO Thomas Staggs, who was widely viewed as next-in-line to succeed to CEO Bob Iger, will be leaving his post...
Valeant (VRX) jumped 10% on Tuesday after its board's ad hoc committee completed its review and announced it found no added items requiring restatement. The stock rallied 19% further on Wednesday after Bill Ackman, a recently-appointed Valeant director whose hedge fund Pershing Square holds a major position in the drugmaker, expressed confidence that the stock's current levels are an opportunity to make "multiples of capital" given the company's upcoming annual filing and new management appointments. Valeant gained another 4% Thursday after announcing that it has obtained the requisite lender approval for the amendment and waiver to its credit facility, which should allow the company to avoid defaulting on its debt agreements. All-in-all, Valeant shares rose nearly 20% for the week...
Constellation Brands (STZ) announced a deal to acquire The Prisoner Wine Company's portfolio of brands, increased its quarterly dividend payouts, and reported that it will explore a potential IPO for a portion of its Canadian wine business...
On Thursday, Verizon (VZ) was one of the worst performers on the Dow, after two research firms downgraded the stock. Verizon additionally made headlines that day after Bloomberg reported that the company plans to submit a first-round bid for Yahoo's (YHOO) core Internet business. Notably, Google (GOOG, GOOGL) was said to consider joining the auction for Yahoo's core, though AT&T (T), Comcast and Microsoft (MSFT) have decided against pursuing offers, according to the report...
Shares of Depomed (DEPO) advanced on Friday after activist investor Starboard Value disclosed that it has a 9.8% ownership stake in the drugmaker and believes that "significant opportunities exist to create value through better execution, improved capital allocation and potentially, a sale of the company." I
NDEXES: The Dow lost about 1.2% to close at 17,576.96; the S&P 500 fell about 1.2% to close at 2,047.60; the Nasdaq declined about 1.2% to close at 4,850.69.
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