Stocks closed lower Wednesday as market participants took profits following a red-hot run higher. Indeed, the three main indexes are hovering near record highs and are poised to close out May with solid gains.
At the close, the Nasdaq Composite was down 0.6% at 16,920 and the S&P 500 was off 0.7% at 5,266. The Dow Jones Industrial Average fell 1.1% to 38,441 as UnitedHealth Group (UNH) slumped 3.8% after the health insurer forecast "some disturbance" in its Medicaid business. At roughly $484, UNH stock has the greatest weighting of all 30 stocks in the price-weighted Dow.
ConocoPhillips to buy Marathon Oil
In other single-stock news, Marathon Oil (MRO) jumped 8.4% after ConocoPhillips (COP, -3.1%) agreed to buy the Texas-based exploration and production company in an all-stock deal valued at $22.1 billion, including debt. The transaction is expected to boost COP's shale assets and could close later this year if all goes as planned.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This is just the latest in a string of merger-and-acquisition (M&A) news coming from the energy sector. Most recently, Hess (HES, -2.1%) shareholders on Tuesday approved a $53 billion merger with Chevron (CVX, -1.4%) – though the deal has a few more hurdles to clear before it closes.
"Consolidation, especially among oil and gas producers, has been a key dealmaking trigger in the last several months due to reduced oil prices, economic pressures and increased support for achieving net zero plans," says Mark Williams, chief revenue officer for the Americas at dealmaking platform Datasite.
The deals are being driven by large producers looking to strengthen their market positions amid maturing business models, Williams adds, "especially to secure lower-cost reserves." He anticipates this trend will continue into the second half of this year.
Chewy has its best day ever after earnings
Outside of the oil patch, Chewy (CHWY) surged 27.1% – its biggest one-day gain on record – after earnings. For its fiscal Q1, the online pet supplies retailer disclosed higher-than-expected earnings of 31 cents per share, up 55% year-over-year. Revenue increased 3.1% to $2.9 billion.
Chewy also unveiled a $500 million stock buyback plan, representing more than 5% of its market cap.
American Airlines dives after cutting Q2 forecast
American Airlines (AAL) was another notable mover, diving 13.5% after the air carrier cut its second-quarter guidance and said its chief commercial officer, Vasu Raja, is leaving the company in June.
"Guidance held out as long as it could, but it's clear AAL's long-term strategy will take some time to execute," said Jefferies analyst Sheila Kahyaoglu, who downgraded the stock to Hold from Buy and lowered her price target to $12 from $17.
Related content
- When Is the Next CPI Report?
- All 30 Dow Jones Stocks Ranked: The Pros Weigh In
- Robinhood Unveils Big Stock Buyback Program: What To Know
-
Is the EV Tax Credit Going Away? What You Need to KnowTax Credits There's a lot of chatter about the President-elect's plans to eliminate the electric vehicle tax credit. Here's what's happening.
-
Being Nimble Is Key to This Fidelity Bond Fund's OutperformanceThe Fidelity Total Bond ETF has done well over the long term as managers adjust to changing tides.
-
Why This Fidelity Bond ETF Has Outperformed Over the Long Term
The Fidelity Total Bond ETF has done well over the long term as managers adjust to changing tides.
-
10 Inefficiencies I Look for on Rich Retirees' Tax ReturnsYour tax return could hold clues to several missed opportunities and important gaps in your retirement planning.
-
Estate Planning: How Does the Basis Step-Up Rule Work?The step-up in basis, one of the most powerful tools in estate and tax planning, can make a huge difference in capital gains taxes owed.
-
Stock Market Today: Stocks Drop as Post-Election Party EndsIt was a red finish on Wall Street Friday with tech stocks selling off ahead of Nvidia's upcoming earnings event.
-
Will You Pay Taxes on Your Social Security Benefits?You might, depending on your income, but smart financial planning now can help lower or even eliminate your taxes in the future.
-
A Simple Trick for Better Investing: Stop Timing the MarketInvestors who stay the course are rewarded for their patience and discipline, enjoying the benefits of compounding returns over time.
-
Does a Farm Need a Different Homeowners Insurance Policy?Homeowners insurance is all about providing the right tool for the right exposure, and life on the farm comes with different risks than life in the city.
-
Stock Market Today: Stocks Slip After Powell Talks Rate CutsThe main indexes closed lower Thursday after Fed Chair Powell said there's no rush to cut rates.
