Stocks opened to modest gains Monday, as tech merger and drug industry news powered some of the largest early moves.
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The Dow Jones industrial opened to a 0.2% gain, with a strong early move by Merck (MRK) being partially held back by Intel (INTC), as Intel shares responded to the latest development in Broadcom’s (AVGO) effort to take over Qualcomm (QCOM).
The S&P 500 rose 0.1% higher, and the Nasdaq Composite opened to o a 0.3% gain, as Broadcom and Micron Technology (MU) led the index in early trade and Amgen (AMGN) and Intel fell to the bottom of the list.
The market’s uptrend got its groove back Friday, after a surprisingly strong February jobs report triggered a rally. Two of the three major indexes cleared key levels of resistance, and the Nasdaq shook off a distribution day. Monday’s action will provide a test of how durable those gains — and the market’s upgraded status — might be.
Merck Paces Dow, Broadcom, Micron Lead Nasdaq, Oclaro Spikes
Merck advanced 1.2% to lead the Dow in opening trade. The New Jersey-based drugmaker last week announced it would invest up to $5.8 billion to jointly develop, with Japan’s Eisai, the Lenvima-Ketruda combination cancer treatment which, in January, earned the Food and Drug Administration’s ‘breakthrough’ designation as a kidney cancer treatment.
Intel posted one of the Dow’s few early losses, down 2.6% after reports on Friday that the company was considering a takeover bid for Broadcom, as a means to upend Broadcom’s effort to merge with Qualcomm. Broadcom opened more than 3% higher. The stock has been wrestling to retake support at its converged 10- and 40-week moving averages in a four-month consolidation. Qualcomm added 0.1% in early trade.
Oclaro (OCLR) spiked 24% at the starting bell, after Lumentum (LITE) announced it would acquire the company in a $1.8 billion cash-and-stock deal. Lumentum, reportedly a supplier of technology used in Apple’s (AAPL) Face ID applications, said the combination aimed to fast-forward its participation in the market for 3D sensing technology.
Oclaro’s shares trade below 10. Lumentum shares ended Friday up 64% from a February low, and in buy range above a 66.80 buy point in a four-month cup base. The IBD 50 stock’s futures rose 3.7% in opening trade.
Shares of Micron Technology swung up more than 5% at the open. The Boise, Idaho-based storage chip leader broke out past a 49.99 buy point in heavy trade a week ago, and ended Friday beyond buy range and 9% above the entry.
Amgen slipped more than 1%, the worst early decline among Nasdaq 100 stocks. Amgen and other competitors to Regeneron Pharmaceuticals‘ (REGN) cholesterol drug Praleunt fell after Regeneron announced plans to lower prices for the drug. Regeneron shares rose 0.2% at the open.
Initial public offerings also played a part in early action, as China-based Qudian (QD) popped 6% on stronger-than-forecast results for the fourth quarter, including a 53% surge in its number of borrowers, to 6.9 million, and a 70% increase in its total transactions, to $3.9 billion, during the period. Shares ended Friday 40% above a November low, but still 34% below the stock’s October IPO price.
Tech unicorn Dropbox filed an updated prospectus, announcing its plan to offer 36 million shares at an IPO between 16 and 18. The midpoint of that range values the online file storage and sharing company at around $7.5 billion. The company’s revenue rose 30% last year to $1.1 billion, while net losses were halved to $112 million. Shares will trade under the ticker DBX, but the offering date is not yet clear.
Global Stock Markets: Asia Rallies, Europe Holds Tight Gains
Asia’s stock markets logged strong gains as the dollar climbed on the heels Friday’s U.S. jobs report. Hong Kong’s Hang Seng index jumped 1.9% and the Nikkei 225 in Tokyo vaulted 1.7% higher. Markets in Europe slipped into mixed action in afternoon trade. Frankfurt’s DAX led, up 0.5%. The FTSE 100 in London slipped to a 0.2% loss.
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