A late PS: Wall Street has shrugged off its earlier losses, to close in the green.
Despite concerns over China’s lockdowns, the Dow Jones industrial average ended the day 0.7% higher at 34,049 points, up 238 points in the session, with technology and consumer firms among the gainers.
Johnson & Johnson (+2.5%), Microsoft (+2.4%) and American Express (+2%) led the gainers, while communications group Verizon (-3.1%) and oil major Chevron (-2.1%) lagged.
All three major U.S. stock benchmarks closed higher Monday, as Treasury yields fell and investors appeared to shrug off concerns over China's Covid-19 lockdown.
— MarketWatch (@MarketWatch) April 25, 2022
The Dow Jones Industrial Average finished up 0.7%, according to preliminary FactSet data: https://t.co/cZG5xfPb13 pic.twitter.com/J85iD6hxkn
Tech stocks benefited from a drop in bond yields today, as investors anticipated a slower-than-hoped recovery. Twitter jumped around 5.6% after agreeing to Elon Musk’s takeover offer.
As CNBC points out, US stocks have already been on a poor run:
Stocks bounced after the Nasdaq Composite fell into a bear market last week. The Nasdaq is now down 19.8% from its record, while the S&P 500 is back in correction territory, down 10.8% from its high. The Dow is coming off its worst one-day performance since 2020 on Friday and four straight losing weeks. The S&P 500 and the Nasdaq fell for three consecutive weeks.
Wall Street is bracing for a stacked week of earnings, particularly reports from major technology companies. About 160 companies in the S&P 500 are expected to report earnings this week, and all eyes will be on results from mega-cap tech names, including Amazon, Apple, Alphabet, Meta Platforms and Microsoft.
“This week may easily be a fork in the road of equities. … Bottom-up drivers will either confirm or reject what the challenging macro backdrop has given us over the last three weeks,” MKM’s JC O’Hara said in a note.
Dow stages big reversal Monday, closing up by more than 200 points @CNBC https://t.co/4vvJRi57jH
— Patrick Manning (@PatrickDManning) April 25, 2022
Twitter agrees Elon Musk takeover deal
Twitter has agreed to sell itself to Elon Musk, the world’s richest man, in a $44bn (£35bn) deal.
The deal puts the Tesla chief executive in charge of a company with 217 million users and an influential role in shaping the political and media agenda on both sides of the Atlantic. Twitter’s initial reluctance to accept a transaction appeared to fade after Musk confirmed a funding package for the deal and shareholders warmed to it. Musk has signalled that Twitter will be overhauled under his leadership, including changes in content moderation, having described himself as a “free speech absolutist”.
The deal comes after a dramatic few weeks of speculation about Twitter’s future, triggered by Musk’s emergence as the platform’s largest single shareholder on 4 April. He then declared a $43bn takeover bid on 14 April, which prompted Twitter’s board to signal its displeasure at his overtures by adopting a so-called poison pill defence 24 hours later.
However, the apparent opposition of Twitter’s board faded after Musk drew up a $46.5bn funding package for the bid, including $21bn of his own money. According to reports, both shareholders and the Twitter board began to take the offer seriously once finance had been put in place.
The deal is not expected to face serious scrutiny from US competition authorities because Musk’s major business interests – an electric car company, the SpaceX rocket business and tunnelling firm the Boring Company – do not compete with Twitter.
However, the deal is likely to draw comment from politicians and campaigning bodies given Twitter’s influence as an information source and Musk’s stance on free speech.
