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Apr 30, 2018

CNBC | All major indexes turn negative; telecom lags on April 30, 2018.

All major indexes turn negative; telecom lags

Fred Imbert, Alexandra Gibbs

All three major indexes traded lower midday Monday, giving up opening gains.
The S&P 500 traded slightly lower, with telecommunication stocks leading seven sectors lower following Sunday's announcement that T-Mobile has agreed to buy Sprint for $26.5 billion.
The Dow Jones industrial average erased earlier gains of 187 points and struggled to hold higher. Boeing contributed the most to declines, while McDonald's and Apple had the greatest positive impact. The iPhone maker is set to report earnings after the close Tuesday, while the fast food giant reported better-than-expected earnings Monday morning.
The Nasdaq composite was the first index to turn negative, weighed by declines in shares of Microsoft. The stock traded roughly 2.5 percent lower as of 12:20 p.m. ET.
Stocks opened higher, helped by a flurry of deal announcements and encouraging earnings reports.
Logistics company Prologis is acquiring DCT Industrial Trust for $8.4 billion in an all-stock deal. DCT Industrial's shares popped more than 11.5 percent. Marriott Vacations, the hotel chain's timeshare business, is also buying rival ILG for $4.7 billion.
Meanwhile, shares of Andeavor jumped 16.7 percent after Marathon Petroleum agreed to acquire it for $23 billion.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Dec. 15, 2017. Michael Nagle | Bloomberg | Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Dec. 15, 2017.
"This is really a byproduct of the same source of better sentiment, which is government backing off," said Maris Ogg, president at Tower Bridge Advisors. "You wouldn't have seen that T-Mobile-Sprint merger with an Obama administration."
In earnings, Dow component McDonald's rose 4.9 percent after reporting better-than-expected earnings and revenue. Botox-maker Allergan also posted a better-than-expected profit for the previous quarter.
"I'm encouraged by the reaction to McDonald's earnings," said Lindsey Bell, investment strategist at CFRA. She also said that several companies have seen their stocks initially rise and then fall after reporting better-than-expected earnings. "For the most part, it seems like investors are taking advantage of any pop in stocks to take profits," she said.
Bell added, however, this earnings season has been strong. Of the S&P 500 companies that have reported through Monday morning, 79.3 percent have reported stronger-than-forecast earnings, according to FactSet.
More than 100 S&P 500 companies are scheduled to report earnings this week, including Apple and Mondelez International.
In economic news, the personal consumption expenditures (PCE) price index posted last month its biggest year-over-year gain since February 2017. The so-called core PCE — which strips out food and energy — jumped 1.9 percent through March. The core PCE is the Federal Reserve's preferred measure of inflation.
Elsewhere, pending home sales barely rose as buyers struggled to afford what little supply is available.