Traders leary over the Fed’s position on tapering received a nice surprise when the Commerce Department reported that orders for durable goods fell 7.3% in July — the worst drop since last year and twice as high as forecast.
The news calmed — for a short time — concerns the Fed will accelerate its tapering program into September, leading to an early rally. But stocks fell in the afternoon on comments by Secretary of State John Kerry regarding Syria’s use of chemical weapons.
By day’s end all three markets ended in the red. The Dow Jones Industrial Average led the way, falling 0.43% to 14,946.46, while the S&P 500 closed down 0.40% at 1656.78. The Nasdaq managed to avoid much of the damage, finishing fractionally lower at 3657.57.
Corporate news took center stage, as biotechnology stalwart Amgen (AMGN) agreed to pay $10.4 billion ($125 per share) to acquire Onyx Pharmaceuticals (ONXX) in a deal that gives Amgen an opportunity to gain entry into the cancer drug market. Amgen’s price is a 7% premium to ONXX’s Friday close. The news was a winner for both companies, as AMGN finished ahead almost 8%, while ONXX closed up nearly 6%.
Also on the merger front, steel mill industrial services company TMS International (TMS) announced it was acquired by the privately-held Pritzker Organization for $1 billion ($17.50 per share) in cash, a 12% premium to TMS’s Friday closing price. The acquisition is expected to close in the fourth quarter. TMS shares rose over 12% on the day.
Tesla (TSLA) shares continued their rise, gaining nearly 2% to an all-time closing high after announcing year-to-date car sales that exceeded those of Fiat (FIATY), Jaguar, Porsche (POHY) and Land Rover in California. TSLA is up nearly 400% for the year.
Next up, 3D printing stocks 3D Systems (DDD) and Stratasys (SSUS) both saw solid gains on the day, as Citigroup (C) initiated coverage of the sector with buy ratings. DDD soared over 7% while SSYS saw 4% gains, while sector mate ExOne (XONE) also improved around 4% on the day.
Facebook (FB) shares also continued to stage a rally, rising nearly 2% to extend a recent run. That brought the share price over $41 per share, an all-time closing high, while touching a historical high water mark of nearly $42 per share.
On the flip side, Tyson Foods (TSN) sank over 7% after a downgrade to “neutral” from “buy” at Bank of America (BAC).
Microsft (MSFT) shares gave up nearly 2% on the day as investors wrestled with the aftermath of CEO Steve Ballmer’s Friday announcement that he will retire from the software maker within one year.
Finally, Bill Ackman’s Pershing Square Capital Management announced right after the bell it sold off its entire 18% (39 million shares) stake in JCPenney (JCP). JCP shares were trading down just over 3% on the news.
- Radioshack (RSH): Up 12.87% (39 cents) to $3.42
- Qihoo (QIHU): Up 7.75% ($5.67) to $78.80 (Read more here)
- Big Lots (BIG): Up 5.49% ($1.77) to $34.02
- Pilgrim’s Pride (PPC): Down 7.75% ($1.30) to $15.47
- Archer-Daniels (ADM): Down 4.91% ($1.78) to $34.50
- Expedia (EXPE): Down 3.06% ($1.49) to $47.20
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he is long MSFT.