Stocks rallied to start the 4-day trading week.
First, the scoreboard:
- Dow: 17,980.6, +268, (+1.5%)
- S&P 500: 2,087, +25.8, (+1.2%)
- Nasdaq: 4,947.5, +56.2, (+1.2%)
And now, the top stories on Monday:
- Texas looks really grim. The Dallas Fed’s manufacturing outlook plunged again in March, to -17.4 from -11.2 in February, missing the expectation of -9. The production index, at -5.2, was the worst negative reading in two years. The Dallas Fed’s report also showed that the oil crash is still hurting several businesses, and Business Insider’s Myles Udland peeled out some of their anecdotes.
- In other economic data out Monday, personal income rose 0.4% in February and personal spending rose 0.1%, versus expectations of 0.3% and 0.2% respectively. “Core PCE,” a measure of inflation that excludes volatile items including food and energy, rose 0.1% month-over-month and 1.4% year-over-year. In February, the savings rate increased to 5.8% from 5.5% in January.
- Pending home sales jumped 3.1% in February, versus the 0.3% rise estimated. The National Association of Realtors said first-time buyers made 29% of the purchases.
- Four massive biotech deals were announced before the market opened: Horizon Pharma will buy all outstanding shares of Hyperion Therapeutics for $US46 per share in cash, or about $US1.1 billion; Cellular Dynamics International has agreed to be acquired by Tokyo-based FujiFilm Holdings for $US16.50 a share or about $US307 million; Teva Pharmaceuticals will acquire Auspex Pharmaceuticals at $US101 per share in cash; and UnitedHealth will combine its pharmacy benefits unit with Catamaran Corp in a deal worth $US12.8 billion.
- Deutsche Bank hacked its Q1 US GDP forecast. “We are reducing our estimate of Q1 consumption to 2%, which has the effect of lowering our forecast of Q1 GDP by 70 bps to 1.7% from 2.4%,” Joseph LaVorgna wrote. “Unfortunately we may not yet be done pruning our estimate of Q1 real economic output because there is a risk that the February international trade data, which are released on Thursday could be disappointing.”
- Tesla will announce a new product that’s not a car on April 30, CEO Elon Musk tweeted. Shares rallied by as much as 3% after spending much of the day in the red. The new product might be a consumer battery, as BI’s Jay Yarow reported January, or something else completely .
- Credit Suisse thinks it would be best if BlackBerry just broke up. They rate the stock “Underperform,” and wrote in a note that “inherent challenges in the company’s services business” make a break up the next best option for the company. BlackBerry reported Q4 revenues of $US660 million that missed the forecast of $US778.
- Earnings estimates have not fallen this much since the financial crisis, according to FactSet. Estimates for S&P 500 2015 earnings were reduced by 8.2% in the first quarter as of Friday, and the revisions have not just come from the oil sector.
- FactSet also found that companies that investors have been punishing companies that earn most of their sales outside the US. Stocks of companies that generate over 50% of sales outside the US fell by 1.8% on average, versus a 0.6% gain for the S&P 500, and +1.5% for companies with less than 50% of sales earned domestically.