TheChek News Flow

After Hours Summary: CR +9%, RMBS +7%, ALSN +2.5% following earnings/guidance, SAEX +37% on tax credit certificate news, CWEI +8% on asset sale/COO news... SONC -11% and V -1% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CR +8.6%, RMBS +7.1%, LFUS +6.7%, CLGX +4.3% (also raises 2016 buyback target; expands full-year 2017 cost reduction program), CMRE +4%, BLKB +3.5% (reaffirms FY16 EPS, sales; raises OCF guidance; adopts stock compensation accounting standard early), PRK +2.7% (light volume), ALSN +2.5%, SWFT +2.2%, FRGI +1.5% (closes 10 Pollo Tropical Restaurants; will rebrand up to three restaurants as Taco Cabana Restaurants; Q3 comparable restaurant sales at Pollo Tropical decreased 1.0%, comparable restaurant sales at Taco Cabana decreased 4.1%), VASC +1.3%, WASH +1.1% (ticking higher), ZION +1.1%

Companies trading higher in after hours in reaction to news: SAEX +37% (received approx $24.4 mln of tax credit certificates from the state of Alaska's Department of Revenue; says received sooner than expected), GBT +13% (agrees w/ the FDA on the design of its pivotal trial for GBT440 in adults and adolescents with sickle cell disease; expected to begin screening patients by December; decides to discontinue its research and development activities related to GBT18713; Chief Medical Officer retires), WINT +10.2% (releases data from lung deposition study in non-human primates demonstrating uniform distribution of aerosolized KL4 surfactant in all regions of the lung), CWEI +8.1% (Clayton Williams announces agreement to sell Giddings area assets for $400 million; names Patrick Cooke as COO), IMMU +2.3% (light volume; engages Greenhill & Co to serve as a strategic advisor primarily to assist in its ongoing efforts to out-license sacituzumab govitecan), MTL +1.9% (following Monday's 35% move higher)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: OPGN -11.9%, SONC -10.8%, WNC -6.4%, PRA -5% (ticking lower; sees Q3 EPS below estimates), NMFC -3.8% (guides Q3 in-line; commences 5 mln common stock offering), EFII -3.7%, BPL -3.7% (also announced plans to acquire 50% interest in VTTI B.V.'s global marine terminal business for $1.15 bln; commences public offering of 7.5 mln limited partnership units representing limited partner interests), GHL -3.4%, KN -2.8% (ticking lower), CDNS -0.9%, V -0.7%

Companies trading lower in after hours in reaction to news: PLG -10.4% (will raise $40 mln through bought deal financing of 22,230,000 common shares at $1.80/share), HHS -2.6% (ticking lower; Guess? will replace Harte-Hanks Inc. in the S&P SmallCap 600), SGY -2.5% (S&P downgraded Stone Energy to 'CC' on proposed Chapter 11 restructuring; Outlook Negative), CRZO -1% (Carrizo Oil & Gas to acquire Eagle Ford Shale properties from Sanchez Energy for $181 mln in cash and provides Q3 production guidance; commences underwritten public offering of 5 mln shares of its common stock), BANC -0.2% (slightly lower after seeing late spike when PL Capital Advisors discloses 6.7% active stake)

Closing Market Summary: M&A Deals and Earnings Boost Stocks

The major averages began the week on an upbeat note as an upswing in M&A activity and sector leadership from the top-weighted technology (+1.1%) space bolstered the broader market. The Nasdaq Composite (+1.0%) finished ahead of both the S&P 500 (+0.5%) and the Dow Jones Industrial Average (+0.4%). 

A recent wave of M&A chatter materialized this weekend when several high-profile deals were announced after Friday's close. AT&T (T 36.86, -0.63, -1.7%) and Time Warner (TWX 86.78, -2.70, -3.0%) made headlines on Saturday after the telecom giant agreed to pay $107.50 per share for Time Warner. The deal is valued at $85.4 billion and marks a premium of 20.1% over Friday's closing price. Meanwhile, Rockwell Collins (COL 79.21, -5.25, -6.2%) agreed to acquire BE Aerospace (BEAV 58.89, +8.28, +16.4%) for $62.00 per share, which will amount to $8.3 billion in total consideration. The size and scope of the deals stoked risk appetite as investors looked for further consolidation.

The benchmark index notched a high at the start of the session and inched off that level throughout the morning. 

A downturn in crude oil futures contributed to the mid-morning pullback as investors assessed the state of OPEC's proposed supply freeze agreement. Iraq made headlines this morning after indicating that it will seek an exemption from the previously discussed agreement. However, selling remained in check after Iran stated that it would encourage other members to join the output freeze. Crude oil briefly broke below $50.00/bbl before settling at $50.52/bbl (-0.7%; -$0.33).

The Treasury complex pulled back today as an upswing in equities and above-consensus economic data weighed on the group. Bond prices extended their decline after U.S. Manufacturing PMI for October came in ahead of estimates. The yield on the 2-yr note finished higher by two basis point (0.84%) while the yield on the benchmark 10-yr note rose three basis points to 1.76%. The spread between the 2-yr and 10-yr yields expanded to 92 basis points from September's 83 basis point differential. 

The benchmark index finished in the upper end of today's trading range, locking in the bulk of today's gain. 

Eight sectors ended in the green with technology (+1.2%), consumer staples (+0.7%), and consumer discretionary (+0.7%) outperforming. On the other hand, telecom services (-0.8%) and energy (-0.2%) finished at the bottom of the board.

The heavyweight technology space (+1.2%) outperformed as participants continued to assess influential quarterly reports from the sector and looked ahead to a busy week on the earnings calendar. Dow component Microsoft (MSFT 61.00, +1.34) jumped 2.3%, extending its post-earnings gain to 6.6%. The name beat analysts' estimates last Thursday. Meanwhile, Alphabet (GOOG 813.11, +13.74) gained 1.7% ahead of releasing its quarterly results Thursday evening. 

In the consumer discretionary sector (+0.7%) Amazon (AMZN 837.71, +18.72) gained 2.3% after Goldman Sachs raised its price target on the stock to $1050 from $920. The name is also scheduled to release its quarterly report this Thursday. Conversely, media company underperformed as investors looked ahead to potential regulatory hurdles that AT&T and Time Warner will face in their merger attempt.

Aerospace and defense names outperformed in the industrial sector (+0.3%) as the sub-group drafted higher alongside BE Aerospace (BEAV 58.89, +8.28). Dow component Boeing (BA 137.45, +1.82) finished ahead of the price-weighted average. Conversely, rail names underperformed as Union Pacific (UNP 89.88, -0.49) fell 0.5%. 

Today's trading volume was below the average of 853 million as 779 million shares changed hands at the NYSE floor.

There was no economic data of note released today.

Tomorrow's economic data will include the 9:00 ET release of the Case-Shiller 20-city Index for August (consensus 5.1%) and the FHFA Housing Price Index for August. Separately, Consumer Confidence for October (consensus 100.8) will cross the wires at 10:00 ET.

• Russell 2000: +8.0% YTD
• Nasdaq Composite: +6.0% YTD
• S&P 500: +5.3% YTD
• Dow Jones: +4.6% YTD