Monday’s Market Snapshot: Here’s What You Need To Know Right Now

Wall Street’s main indexes fluctuated between gains and losses as investors assessed prospects for talks on a fresh stimulus package, while the number of COVID-19 infections rose, raising investor concern about pandemic-led economic restrictions.

The tech-heavy Nasdaq Composite Index advanced 1% and the S&P 500 Index added 0.2%. Meanwhile, the Dow Jones Industrial Average was flat.

Shares of AMC Entertainment tanked 17% after the cash-strapped theater chain warned that its existing cash reserves will run out by January 2021. To remain viable through 2021, AMC currently estimates that it will need at least $750 million of additional liquidity to fund its cash requirements. In addition, AMC announced that it has secured a $100 million lifeline from Mudrick Capital Management.

Virgin Galactic plunged 17% after Sky News reported that the company aborted the first powered test flight of its spaceplane on Saturday despite getting the all-clear before launch. The spaceplane was released from under its carrier aircraft at an altitude of about 40,000 feet, but the spacecraft’s engine shut down after igniting momentarily. No passengers were on board and pilots, CJ Sturckow and Dave Mackay, were able to fly the spacecraft back to base safely. The full impact of Saturday’s aborted test flight is uncertain at this time.

In other airlines news, United Airlines dropped 2.2% as the air carrier increased its cash burn projection for the fourth quarter. The carrier now expects 4Q cash burn of about $24 million-$26 million, plus $10 million of average debt principal payments and severance payments per day. The company had previously predicted 4Q cash burn of $15 million-$20 million, plus $10 million of severance and debt principal payments. It cited continued deceleration in bookings and a change in working capital due to a shift in the timing of certain payments and receipts between quarters as reasons for the revised cash burn guidance.

In investment news, Public Storage rose 3.6% as Elliott Associates disclosed that it had made a “substantial investment” in the common stock of the self-storage company. Public Storage said it held discussions in recent weeks with the activist hedge fund investor, which had confidentially submitted the names of six nominees for election to the company’s board.

In a mega regional bank deal, TCF Financial agreed to be snapped up by Huntington Bancshares in an all-stock merger deal with a total market value of $22 billion. The pro forma combined company will have assets, loans, and deposits worth $168 billion, $117 billion, and $134 billion, respectively. The merger has a cost-saving potential of $490 million, which is equivalent to 37% of TCF’s noninterest expense. Huntington expects the transaction to be 18% accretive to EPS in 2022, after factoring in the cost synergies. TCF shares rose almost 4%, while Huntington declined 4.9%.     

In other deal news, buyout firm, KKR & Co. has agreed to buy a large portfolio of industrial properties from High Street Logistics Properties in a transaction valued at about $835 million. KKR’s acquisition of the portfolio of approximately 9.7 million square feet expands the company’s industrial real estate footprint to 30 million square feet. KKR said that the newly acquired portfolio “is complementary to KKR’s existing footprint in the major markets of Atlanta, Baltimore, Chicago, Central Florida and Dallas. The acquisition also expands KKR’s industrial real estate portfolio to new markets in Central Pennsylvania and South Florida.” Shares rose less than 1%.

Electronic Arts has agreed to buy UK-based game developer and publisher Codemasters for $1.2 billion, with shareholders expected to receive £6.04 in cash per ordinary share of Codemasters. EA believes that the union of the two companies will allow them to leverage each other’s significant expertise, which will enable further innovation and increase the delivery of content and experiences to a growing audience. Codemasters is mostly known for their Formula One and Dirt racing games and players will now also benefit from a combined portfolio of sports and racing games through EA’s multi-platform subscription services. EA stock increased 1.5%.

In corona updates, CureVac jumped 4% after the biopharma company announced the enrollment of the first participant in the large-scale study of its mRNA vaccine candidate, CVnCoV, against COVID-19. The company stated that the randomized, placebo-controlled pivotal Phase 2b/3 study will test the safety and efficacy of CVnCoV in adults at a dose of 12 µg. The study is expected to include more than 35,000 participants at sites in Europe and Latin America.