Stocks opened with modest gains and hit another new record for the Dow. The market saw its highs a short time after the open and then crossed into negative ground where it remined for most of the day. The Nasdaq was heavy all day thanks to a downgrade in Apple (AAPL) shares which pushed the stock down more than 1.0% and the index roughly 0.4%. The tax reform bill passed the House and provided support for the market which saw gains in seven of the previous eight sessions. Oil prices rose slightly ahead of this afternoon’s API inventory report and tomorrow’s Department of Energy report. ECONOMIC NEWS: In the U.S., chain store sales rose 2.8% to 118.3 in the December 16 week. Housing starts in the U.S. rose 3.3% in November to 1.297M after bouncing a revised 8.4% to 1.256M in October. Building permits slid 1.4% in November to 1.298M versus the 7.4% October gain to 1.316M. U.S. current account deficit narrowed to -$100.6B in Q3 after widening to -$124.4B in Q2. In political news, the U.S. House of Representatives passed the Republican tax bill on a 227-203 vote. The Senate will vote on the plan tonight, and President Trump could sign it into law later this week. COMPANY NEWS: Shares of Chicago Bridge & Iron (CBI) slipped 10.5% after it and McDermott International (MDR) agreed to merge in a $6B all-stock transaction. Upon completion of the transaction, McDermott shareholders will own approximately 53% of the combined company on a fully diluted basis and CB&I shareholders will own approximately 47%. McDermott shares fell 11.9% after the announcement… In other M&A news, Jack in the Box (JACK) shares were 3.1% higher after the fast food chain entered into an agreement to sell its Qdoba Restaurant subsidiary to certain funds managed by affiliates of Apollo Global Management (APO). Under the terms of the deal, the Apollo funds will buy Qdoba for roughly $305M in cash, and the transaction is expected to close by April 2018… In addition, shares of Crown Holdings (CCK) were in focus after it agreed to acquire Signode Industrial Group from Carlyle (CG) in a cash transaction valued at $3.91B. MAJOR MOVERS: Among the noteworthy gainers was Insys Therapeutics (INSY), which rose 4.6% after it initiated a new clinical trial of CBD oral solution. Also higher after reporting quarterly results were Darden (DRI) and Carnival (CCL), which gained 6.7% and 2.3%, respectively. Among the notable losers was Kindred Healthcare (KND), which fell 5% after it agreed to be acquired by a consortium of TPG Capital, Welsh, Carson, Anderson & Stowe and Humana (HUM) for approximately $4.1B in cash including the assumption or repayment of net debt. Also lower was Agco (AGCO), which slipped 3.3% after it provided 2018 guidance that missed expectations. INDEXES: The Dow fell 37.45, or 0.15%, to 24,754.75, the Nasdaq lost 30.91, or 0.44%, to 6,963.85, and the S&P 500 declined 8.69, or 0.32%, to 2,681.47.
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