Stocks opened in positive territory after another round of solid earnings reports and a wave of merger announcement. Shares of McDonalds (MCD) are trading higher by about 5%, helping the Dow outperform the other major averages after the company’s better than expected quarterly report. The week will be highlighted by tomorrow’s earnings report from Apple (AAPL), an FOMC decision from the Fed at midweek and the monthly jobs report on Friday. ECONOMIC EVENTS: In the U.S., personal income rose 0.3% in March, with spending rising 0.4%. The Chicago PMI rose 0.2 points to 57.6 in April. An index of pending home sales rose 0.4% to 107.6 in March. In Asia, China’s official manufacturing PMI for April came in at 51.4, versus the consensus call for a 51.3 reading, and its non-manufacturing PMI was reported to be 54.8, versus the 54.5 consensus forecast. COMPANY NEWS: It was big day for deals, headlined by T-Mobile (TMUS) and Sprint’s (S) agreement to merge in an all-stock transaction. Based on closing share prices on April 27, the deal represents a total implied enterprise value of approximately $59B for Sprint and approximately $146B for the combined company. After the long-anticipated tie-up was clinched, Wells Fargo analyst Jennifer Fritzsche downgraded shares of both Sprint and T-Mobile to Market Perform, as she expects the stock to be range-bound pending greater clarity on the deal’s regulatory outlook… Among the billions of dollars in other deal announcements made over the weekend and this morning were Walmart’s (WMT) agreement to combine Asda Group, Walmart’s wholly owned U.K. retail subsidiary, with J Sainsbury (JSAIY); Marathon Petroleum’s (MPC) agreement to acquire Andeavor (ANDV) in a merger pact representing a total equity value of $23.3B and total enterprise value of $35.6B; and Marriott Vacations’ (VAC) agreement to buy ILG (ILG) in a cash and stock transaction with an implied equity value of approximately $4.7B… Headlining the earnings reporting was Dow member McDonald’s, which rose 5% after the burger giant’s earnings, revenue and international results beat expectations… Disney’s (DIS) $4B purchase of Marvel continues to pay dividends at the box office, as “Avengers: Infinity War” set records for the top domestic and worldwide debut of all time, grossing $250M in North America and $380M overseas for a global total of $630M. MAJOR MOVERS: Among the noteworthy gainers was Financial Engines (FNGN), which jumped 32% after it agreed to be acquired by Hellman & Friedman for $45 per share in cash. Also higher were First Data (FDC) and Aquantia (AQ), which gained a respective 15% and 12.5% after reporting quarterly results. Among the notable losers was Wayfair (W), which slipped 8.5% after Wedbush analyst Seth Basham downgraded the stock to Neutral from Outperform. Also lower were Arconic (ARNC) and Allergan (AGN), which fell a respective 17% and 4% after reporting quarterly results. INDEXES: Near midday, the Dow was up 9.06, or 0.04%, to 24,320.25, the Nasdaq was down 40.79, or 0.57%, to 7,079.01, and the S&P 500 was down 7.82, or 0.29%, to 2,662.09.
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