TheChek News Flow

After Hours Summary: SANM +13%, CDNS +10% higher following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SANM +13%, CDNS +9.6%, RUSHA +3% (light volume), AMP +1.5%

Companies trading higher in after hours in reaction to news: TRMB +4.9% (Trimble to acquire privately-held Viewpoint from Bain Capital in all-cash transaction valued at $1.2 billion - expected to be completed in Q3; expects first quarter revenue to be above the high end of the range of prior guidance), TNDM +3.5% (entered into distribution agreements with Australasian Medical & Scientific and New Zealand Medical & Scientific to commercialize Tandem's t:slim X2 Insulin Pump), ATI +3.3% (ahead of earnings tomorrow), ZYME +2.6% (Zymeworks announced that Celgene exercised its right to expand its collaboration agreement for the research, development, and commercialization of bispecific antibody therapeutics using Zymeworks' Azymetric platform), LQ +2.2% (ticking higher after Sohn announces Idea Contest winner -- Andrew Walker of Rangeley Capital with LQ submission), NWL +1.6% (announced its first quarter 2018 earnings results will be released Friday, May 4; Starboard filed its definitive proxy statement as detailed before the open), PRTA +1.2% (after today's 25 point / 69% decline), PYPL +0.6% (eBay and PayPal finalize new payments agreement), BP +0.5% (upgraded to Buy from Neutral at Goldman)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: CVNA -4.7% (also commences 10 mln share follow-on public offering of Class A common stock -- includes 4 mln by selling stockholders), SRCI -3.7% (light volume), AMTD -2.3%, TVTY -1.1%, WHR -0.9%

Companies trading lower in after hours in reaction to news: EPZM -19.6% (announced that U.S.-based enrollment of new patients into tazemetostat clinical trials is temporarily on hold), CASA -4.4% (files for 7.35 mln share common stock offering by holders including Chief Executive Officer and other officers and directors; announces partial lock-up release), AGO -4.1% (dips lower in after hours trade after Greenlight Capital's David Einhorn voices concerns at the Sohn conference), INCY -3.6% (following FDA advisory committee meeting for baricitinib), JOE -3.3% (speculation that JOE will be next Kerrisdale short target), HTZ -1.8% (mentioned cautiously at Sohn conference), EROS -0.9% (light volume; following Mangrove Partners' Nathaniel August cautious comments at Sohn)

Closing Market Summary: Investors Hit Pause As Yields Rise, Ahead of Busy Earnings Week

The stock market wobbled on Monday as investors braced for a busy week of corporate earnings and kept a close eye on Treasury yields, which rose to multi-year highs. The Nasdaq Composite (-0.3%) and the Dow Jones Industrial Average (-0.1%) each finished a step lower, notching their third and fourth straight losses, respectively, while the S&P 500 (unch) eked out a slim win, closing just a tick above its flat line. Volume was light once again on Monday, with just 730 million shares changing hands at the New York Stock Exchange (50-day moving average is 897 million).

Treasury yields were higher from the jump on Monday, with the yield on the benchmark 10-yr note nearly touching the psychologically important 3.0% mark in overnight trade -- getting as close as 2.998%. The 10-yr yield eventually settled two basis points above its Friday close at 2.97% -- which is its highest close in more than four years -- while the yield on the 2-yr note finished three basis points above its Friday close at 2.47% -- which is its highest close in more than seven years.

Stocks held up well considering the increased, "risk-free" return on U.S. Treasuries and considering the rise in the U.S. dollar -- which, by itself, doesn't bode well for foreign demand of U.S. goods. The U.S. Dollar Index rose 0.7% to 90.68 -- its highest close since mid-January. The greenback added 0.4% against the euro (1.2209) and 1.0% against the yen (108.72).

The S&P 500 sector standings were pretty evenly mixed between green and red, with six groups advancing and five declining. However, outside a 1.1% jump in the lightly-weighted telecom services sector, sector movement was modest, with no group adding/losing more than 0.6%. The energy sector (+0.6%) showed relative strength as WTI crude futures climbed 0.5% to $68.76 per barrel, while the top-weighted technology sector (-0.4%) was the weakest performer as chipmakers weighed; the PHLX Semiconductor Index dropped 1.3%.

In corporate news, Dow components Caterpillar (CAT 153.99, +0.74, +0.5%), Merck (MRK 60.25, +1.42, +2.4%), Exxon Mobil (XOM 79.57, +0.57, +0.7%), and Verizon (VZ 48.66, +0.76, +1.6%) all rose after receiving ratings upgrades, Kimberly-Clark (KMB 98.52, -1.51, -1.5%) slid after revealing that its first quarter margins were significantly impacted by commodity inflation, and Hasbro (HAS 86.12, +3.31, +4.0%) ended higher despite initially dropping as much as 4.6% after reporting worse-than-expected profits and sales for the first quarter.

Monday's economic data was limited to the Existing Home Sales report for March, which came in better-than-expected; existing home sales increased 1.1% month-over-month to an annualized rate of 5.60 million units (Briefing.com consensus 5.57 million). The key takeaway from the report remains the same: notable supply constraints continue to act as a drag on overall sales. The limited inventory -- and the high prices on available inventory -- is crimping affordability, particularly for first-time buyers; moreover, all prospective buyers are going to feel added affordability pressures from rising mortgage rates.

Looking ahead to Tuesday's data, investors will receive the FHFA Housing Price Index for February (consensus +0.5%), the S&P Case-Shiller Home Price Index for February (consensus +6.4%), New Home Sales for March (consensus 631K), and the Conference Board's Consumer Confidence Index for April (consensus 126.1).

• Nasdaq Composite: +3.3% YTD
• Russell 2000: +1.7% YTD
• S&P 500: -0.1% YTD
• Dow Jones Industrial Average: -1.1% YTD

Newell Brands enters agreement w/ Starboard to end its proxy contest

As part of the agreement, the Board of Directors has appointed two new independent directors, Gerardo I. Lopez and Robert A. Steele, effective immediately. Additionally, the company intends to nominate Bridget Ryan Berman from Starboard's slate, who has been mutually-agreed upon by Starboard and Carl C. Icahn, Chairman of Icahn Enterprises LP ("IEP"), for election to the Board of Directors at the company's 2018 Annual Meeting of Shareholders.

Gapping down
In reaction to disappointing earnings/guidance:

• HAS -7.9%, HNI -3.2%, UBS -2.8%, SALT -1.4%

M&A news:

• AKRX -32.3% (Fresenius (FSNUY) to terminate merger agreement with Akorn due to Akorn's failure to fulfill several closing conditions)
• FMS -4% (to divest its controlling interest in Sound Inpatient Physicians for $2.15 bln, gives prelim Q1 results)

Select metals/mining stocks trading lower:

• EXK -5.9%, SVM -1.7%, GFI -1%, GOLD -0.8%, ABX -0.5%

Other news:

• PTN -9% (entered into $25 mln equity distribution agreement with Canaccord Genuity)
• KMDA -3.3% (receives feedback from FDA on proposed Phase 3 protocol for Inhaled Alpha-1-Antitrypsin .

Analyst comments:

• ARNC -1.1% (downgraded to Neutral from Buy at Longbow)
• PIR -1.1% (downgraded to Underperform from Mkt Perform at Raymond James)
• LULU -1.6% (downgraded to Hold from Buy at Needham)
• OAS -4% (downgraded to Sell from Hold at SunTrust)
• SPWR -6.6% (downgraded to Underperform from Neutral at BofA/Merrill)

Gapping up
In reaction to earnings/guidance:

• PHG +3.8%, ONB +1.8%

M&A news:

• VVC +4.7% (to merge with CenterPoint Energy (CNP)), TSG +2% (acquires Sky Betting & Gaming for $4.7 bln)

Other news:

• HMNY +4.8% (continued volatility in pre-market)
• HSIC +2.9% (to spin off its Animal Health business and merge it with Vets First Choice)
• SAGE +1.3% (submits a NDA to the FDA for an intravenous formulation of brexanolone)
• GE +1.0% (General Electric and Safran (SAFRY) Aircraft Engines jv CFM International issued a new service bulletin calling for inspections of fan blades on long-service engines)

Analyst comments:

• CERN +2.5% (upgraded to Buy from Neutral at Citigroup)
• OKTA +2.2% (upgraded to Buy from Hold at Canaccord Genuity)
• MRK +2% (upgraded to Buy from Neutral at Goldman; added to Conviction Buy List)
• KORS +1.8% (upgraded to Buy from Hold at Deutsche Bank)
• UAA +1.8% (upgraded to Hold from Sell at Deutsche Bank)
• CAT +1.3% (upgraded to Buy from Neutral at Goldman; added to Conviction Buy List)
• VZ +0.8% (upgraded to Overweight from Equal Weight at Barclays)