U.S. markets moved lower for the second consecutive day, giving up earlier gains amid merger news, as traders eyed fluctuations in oil prices once again.
Earlier in the day, a report by the U.S. Energy Information Administration said that weekly crude inventories had declined, which was boosting oil prices. But distillate inventories were up some 5 million barrels, which was twice what economists were expecting.
The Dow Jones Industrial Average lost 0.4%, while the S&P 500 was off 0.8%. The Nasdaq was the weakest of the three indices, down 1.5%. Most sectors were in the red, but energy, basic materials and utilities finished in the green.
The Dow was up nearly 200 points earlier in the day, as a proposed merger between chemical giants Dow Chemical Co (NYSE:DOW) and I Du Pont De Nemours And Co (NYSE:DD) had traders excited. DOW, along with Vera Bradley, Inc. (NASDAQ:VRA) and Wynn Resorts Limited (NASDAQ:WYNN) are thus three of today’s best stocks. Here’s the full report.
Dow Chemical Co (DOW)
Wow, what a chemical reaction! What else can you say when the two biggest chemical companies in the world decide to merge? The Wall Street Journal reported this morning that Dow Chemical is now in advanced discussions on a merger with DuPont that would create one giant chemical company with a $120 billion value.
So far, terms have not been released, but the formal announcement could be made this week. The plan might be for both companies to be equals in the merger, separating off into three sections: agrochemicals, material sciences and specialty products. Both companies’ CEOs would remain, with DOW CEO Andrew Liveris to possibly become the executive chairman of the new company, while DD’s Edward Breen may end up with the CEO title.
DOW stock ripped nearly 12% higher on 62 million shares on the news, while DD gained just a fraction less than DOW on 25 million shares.
Vera Bradley, Inc. (VRA)
VRA stock gapped astoundingly higher today, finishing with a gain of 46% after reporting third-quarter earnings of 27 cents per share on revenue of $126.7 million. The EPS figure beat analysts’ expectations of 20 cents per share. The company also increased its fiscal 2016 earnings guidance to a range of 80 to 83 cents per share, well above previous guidance of 72 to 78 cents per share.
Also moving VRA stock higher was the announcement that the board of directors has approved another share buyback program over the next two years, with a total up to $50 million of common stock. A previous $40 million share buyback program ended during the latest quarter.
Today’s price action blasted VRA stock well above the 200-day moving average at $13.01. VRA has traded below the 200 day moving average since the beginning of 2014.
Wynn Resorts Limited (WYNN)
WYNN stock was rolling sevens today after disclosing that CEO Stephen Wynn has now purchased an additional 1 million shares for his own account.
The shares were bought between Dec. 4 and Dec. 8, giving Mr. Wynn more than 11 million shares of company stock.
WYNN stock has badly lagged the general market this year, and since early 2014, has fallen from $230 a share to a recent low near $60. WYNN gained 13% on the day.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.
