Stocks jump on $67B in tech, biotech M&A

Tech, telecom and biotech drove M&A Monday

U.S. equity markets rallied Monday amid a flurry of deals worth around $67 billion in tech, telecom and biotech, along with optimism a COVID-19 vaccine will be distributed by yearend.

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The Nasdaq Composite paced the gains ri,sing 1.86%, as tech stocks continued to dictate the market’s direction after Nvidia agreed to purchase Arm Holdings from SoftBank Group in a $40 billion cash and stock deal.

TickerSecurityLastChangeChange %
I:COMPNASDAQ COMPOSITE INDEX11117.525026+203.96+1.87%
NVDANVIDIA CORPORATION521.40+6.45+1.25%

The S&P 500, meanwhile, closed higher by 1.27% after Gilead Sciences Inc. agreed to a $21 billion deal for Immunomedics Inc. and Verizon Communications Inc. announced a $6.25 billion deal to buy wireless phone reseller Tracfone from America Movil SAB.

TickerSecurityLastChangeChange %
SP500S&P 5003351.6+53.14+1.61%
GILDGILEAD SCIENCES INC.62.85+0.60+0.96%
IMMUIMMUNOMEDICS85.52+0.16+0.19%
VZVERIZON COMMUNICATIONS INC.59.36-0.03-0.05%
AMXAMERICA MOVIL S.A.B. DE C. V.12.26+0.16+1.32%

The Dow Jones Industrial Average gained 327 points, or 1.18%, with United Health and Apple registering gains.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27584.06+410.10+1.51%
UNHUNITEDHEALTH GROUP INCORPORATED303.23+0.73+0.24%
AAPLAPPLE INC.114.96+2.68+2.39%
MSFTMICROSOFT CORP.209.44+1.62+0.78%

Along with a surge in M&A activity, the gains were also fueled by further optimism a COVID-19 vaccine could be distributed by the end of this year after Pfizer Inc. asked the Food and Drug Administration to expand its late-stage trial to 44,000 participants, up from its initial target of 30,000. Astra Zeneca shares also rose.

TickerSecurityLastChangeChange %
PFEPFIZER INC.36.39+0.34+0.94%
AZNASTRAZENECA PLC54.75-0.76-1.37%

Elsewhere, Oracle Corp. will partner with social media app TikTok’s U.S. business. Microsoft Corp., which was thought to be the front runner to buy TikTok, ticked higher losing out.

The deal, if approved, could result in a U.S. headquarters for TikTok and possibly the creation of 20,000 jobs, according to Treasury Secretary Steven Mnuchin.

MNUCHIN: ORACLE'S TIKTOK BID PROMISES US HEADQUARTERS, 20,000 JOBS

TickerSecurityLastChangeChange %
ORCLORACLE CORPORATION59.58-0.22-0.37%
MSFTMICROSOFT CORP.209.44+1.62+0.78%

Other mega-cap tech stocks that have paced the rally off the March low, including Alphabet Inc., Amazon Inc. and Tesla Inc., were higher.

TickerSecurityLastChangeChange %
GOOGALPHABET INC.1,464.52+19.56+1.35%
AMZNAMAZON.COM INC.3,174.05+78.92+2.55%
TSLATESLA INC.421.20+13.86+3.40%

Meanwhile, Nikola Corp. called a report released last week by short-seller Hindenburg Research “false and defamatory.” The electric-truck maker has been on the defense since Thursday, when Hindenburg accused Nikola of misleading partners about its technology, causing shares to plunge by 24% over the last two trading sessions.

General Motors Co. CEO Mary Barra, while speaking at an RBC Investor Conference, defended the automaker's due diligence of its recent partnership with Nikola.

Delta Air Lines Inc. secured a $6.5 billion loan facility backed by its frequent flyer program as it looks to fight through the sharp drop in air travel caused by the COVID-19 pandemic. The private placement comes weeks after a report said the airline plans to furlough 1,941 pilots in October.

TickerSecurityLastChangeChange %
NKLANIKOLA CORPORATION19.30-0.16-0.82%
DALDELTA AIR LINES INC.31.34+1.56+5.24%

Looking at commodities, West Texas Intermediate crude oil slipped 7 cents to $37.26 per barrel as Tropical Storm Sally, which strengethened to a hurricane, neared New Orleans. Gold, meanwhile, jumped $15.30 to $1,953.10 an ounce.

U.S. Treasurys were little changed with the yield on the 10-year note near 0.669%.

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European markets were mixed with France’s CAC trading up 0.35%. Britain’s FTSE  slid 0.1% and Germany’s DAX was off 0.07%.

In Asia, Japan’s Nikkei outperformed, gaining 0.65%, after Yoshihide Suga was chosen to be the country’s next prime minister, while China’s Shanghai Composite and Hong Kong’s Hang Seng added 0.57% and 0.56%, respectively.