The major averages were active in Thursday morning trading, opening with gains and then moving back and forth across the flatline a number of times. Near noon, the Nasdaq, Dow and S&P are all lower, though none of the indexes are far from moving back into positive ground.
ECONOMIC EVENTS: In the U.S., initial jobless claims were steady at 884,000 in the week ended September 5. The Producer Price Index rose 0.3% in August, with the core PPI rate increasing 0.4%, which point to hotter than forecast inflation. Wholesale inventories fell 0.3% in July, while sales climbed 4.6%, both of which were a little below forecast.
TOP NEWS: Citi (C) announced that CEO Michael Corbat will retire from the company and step down from its board in February of 2021. The company's board has selected Jane Fraser, currently Citi's president and CEO of Global Consumer Banking, to succeed him as CEO in February, which will make her the first woman to head a major U.S. bank. She has also been elected to Citi's board, effectively immediately.
In M&A news, Volkswagen (VWAGY) subsidiary Traton informed the board of Navistar (NAV) that it has increased its proposed takeover offer to $43 per share from $35 per share. Traton, which already holds a share of 16.8% in Navistar, proposed in January to acquire all shares of Navistar it does not already own. Following the news, Navistar shares have jumped 16%.
Shares of Kansas City Southern (KSU) were fractionally higher near noon after The Wall Street Journal reported last night that the company has rejected a roughly $20B acquisition bid from a consortium of investors, including Global Infrastructure Partners and the infrastructure arm of private-equity giant Blackstone Group (BX). The railroad operator argued in its dismissal that the offer undervalues the company, according to the Journal, which noted that the group of suitors had offered the company $208 per share.
Meanwhile, Virtusa (VRTU) shares surged 24% after the company agreed to be acquired by Baring Private Equity Asia, or BPEA, for $51.35 per share in a cash deal valued at roughly $2B. The transaction is expected to close in the first half of 2021.
Additionally, Nikola (NKLA) shares dropped 8% after short-selling research firm Hindenburg Research said it believes the company "is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton's career." Milton has tweeted that the company would respond to Hindeburg's "lies" and the company later told Bloomberg in an emailed statement that Nikola has been vetted by "some of the world's most credible companies" and that the Hindenburg report contains "misleading" information.
MAJOR MOVERS: Among the noteworthy gainers was Spotify (SPOT), which rose 3% after Credit Suisse analyst Brian Russo upgraded the stock to Outperform from Neutral. Also higher was RH (RH), which gained 23% after reporting quarterly results.
Among the notable losers was Satsuma (STSA), which slid 65% after reporting data from a study of its STS101 powder as an acute treatment for migraine. Also lower was Sutro Biopharma (STRO), which fell 16% after reporting Phase 1 data on STRO-002 in ovarian cancer.
INDEXES: Near midday, the Dow was down 103.58, or 0.37%, to 27,836.89, the Nasdaq was down 6.98, or 0.06%, to 11,134.58, and the S&P 500 was down 11.01, or 0.32%, to 3,387.95.