Stocks closed lower on Wednesday as market participants took profits following a bull run. In fact, all three major indices are hovering around all-time highs and are poised to close out May with solid gains.
At closing, the Nasdaq Composite fell 0.6% to 16,920 and the S&P 500 fell 0.7% to 5,266. He Dow Jones Industrial Average fell 1.1% to 38,441 as UnitedHealth Group (UNH ) fell 3.8% after the health insurer forecast "some disruption" to its Medicaid business. Priced at about $484, UNH stock has the largest weighting of the 30 price-weighted Dow stocks.
ConocoPhillips to buy Marathon Oil
In other individual stock news, marathon oil (MRO ) jumped 8.4% after ConocoPhillips (POLICE -3.1%) accepted buy Texas-based exploration and production company
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This is just the latest in a series of mergers and acquisitions (M&A) news coming out of the energy sector. More recent, Hesse (HE IS -2.1%) shareholders on Tuesday approved a $53 billion merger Chevron CLC -1.4%), although the deal has a few more hurdles to overcome before closing.
"Consolidation, especially among oil and gas producers, has been a key factor in negotiating deals in recent months due to lower oil prices, economic pressures and increased support for achieving net zero emissions plans" says Mark Williams, Americas chief revenue officer for trading platform Data site
The deals are being driven by large producers looking to strengthen their market positions amid mature business models, Williams adds, "especially to secure lower cost reserves." He anticipates this trend will continue in the second half of this year.
Chewy has its best day after earnings
Out of the oil slick, Tough (BLOW ) rose 27.1% (its biggest one-day gain on record) after the earnings. For its fiscal first quarter, the online pet supplies retailer revealed better-than-expected earnings of 31 cents per share, a 55% year-over-year increase. Revenue rose 3.1% to $2.9 billion.
Chewy also unveiled a $500 million share buyback plan, representing more than 5% of its Market cover
American Airlines sinks after cutting its second quarter forecasts
american airlines (AAL ) was another notable move, falling 13.5% after the airline cut its guidance for the second quarter
"Guidance was held in place as much as it could be, but it's clear that AAL's long-term strategy will take some time to execute," analyst Jefferies said. Sheila Kahyaoglu
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