The Week In Review



U.S.-China trade tensions weighed at the start of Monday's session, but sentiment eventually improved, allowing stocks to escape with just minor damage.

The benchmark S&P 500 index finished with a loss of 0.2%, but was down 0.8% at the opening bell. As for the other major averages, the Dow Jones Industrial Average lost 0.4%, the tech-heavy Nasdaq Composite finished flat, and the small-cap Russell 2000 advanced 0.5%, closing at a new all-time high.

Washington and Beijing remain at odds over trade after President Trump confirmed on Friday that he has approved a 25% tariff on $50 billion worth of Chinese goods -- to which Beijing swiftly responded by vowing to implement equivalent duties on U.S. goods. There weren't any new developments over the weekend.

Most S&P 500 sectors finished Monday in negative territory, with health care (-1.0%), consumer staples (-1.5%), and telecom services (-2.0%) leading the retreat. However, all other declining sectors finished with modest losses of no more than 0.4%.

Within the health care space, Biogen (BIIB 289.12, -15.91) was particularly weak, losing 5.2%, after rival PTC Therapeutics (PTCT 47.88, +10.33) announced positive trial results for its experimental spinal muscular atrophy drug. PTCT shares spiked 27.5%, hitting a fresh three-year high.

The energy sector (+1.1%) was the top-performing group by a wide margin following reports that Friday's OPEC/non-OPEC meeting could end with producers agreeing on a less-than-expected increase in output. West Texas Intermediate crude futures rebounded from a two-month low on Monday, rallying 1.2% to $65.85/bbl.

The top-weighted technology sector (+0.3%) also finished in the green, even though chipmakers underperformed. Semiconductor giant Intel (INTC 53.22, -1.89), for instance, dropped 3.4% after its shares were downgraded to 'Under Perform' from 'Market Perform' at Northland Capital. Tech giants Microsoft (MSFT 100.86, +0.73), Facebook (FB 198.31, +2.46), and Alphabet (GOOG 1173.46, +21.20) rallied, adding between 0.7% and 1.8%.

Elsewhere, media names were in focus once again after CNBC's David Faber reported that Walt Disney (DIS 107.06, -1.79) is planning to add cash to its bid for the bulk of 21st Century Fox's (FOXA 44.56, -0.10) assets. Disney's upped offer is a response to last week's $65 billion all-cash bid from Comcast (CMCSA 32.58, -1.30).

Also of note, GameStop (GME 15.20, +1.24) jumped 8.9% after Reuters reported that the company is holding talks with private equity firms over a potential transaction, and Rent-A-Center (RCII 14.68, +2.65) spiked 22.0% after agreeing to be acquired by Vintage Capital for $15.00 per share in cash.

On the data front, Monday's lone economic report, the NAHB Housing Market Index for June, came in at 68, slightly lower than the consensus of 70.


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