Stocks reversed earlier losses and staged a late afternoon rally on Monday as big tech names climbed higher in late-session trading. The Nasdaq inched into the green by the end of the trading day, snapping a four-day losing streak. However, both the Dow Jones Industrial Average and S&P 500 ended the day in negative territory.
Here's how the market settled to start the week:
S&P 500 Index (NYSE: SPY): -0.14% or -6.74 points to 4,670.29
Dow Jones Industrial Average (NYSE: DIA): -0.45% or -162.79 points to 36,068.87
Nasdaq Composite Index (NASDAQ: QQQ): +0.05% or +6.93 points to 14,942.83
Take-Two Interactive to acquire Zynga in $12.7 billion deal:
Take-Two Interactive (NASDAQ: TTWO) announced Monday it is buying mobile gaming company Zynga (NASDAQ: ZNGA) for $12.7 billion in a cash and stock deal. The deal is expected to close by June 30, 2022, subject to regulatory and shareholder approvals.
The company will acquire all outstanding shares of Zynga at $9.86, a 64% premium of Zynga's closing price Friday. Take-Two said Zynga shareholders will receive $3.50 in cash and $6.36 in Take-Two stock for each shares of Zynga outstanding at the closing of the transaction.
"This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity," said Take-Two CEO Strauss Zelnick in a press statement. "Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months."
Lululemon says Omicron has impacted Q4:
Shares of Lululemon Athletica (NASDAQ: LULU) fell on Monday after the athletic apparel brand said it expects its fourth-quarter revenue and profits will be impacted by surging Omicron variant cases.
"We started the holiday season in a strong position but have since experienced several consequences of the Omicron variant, including increased capacity constraints, more limited staff availability, and reduced operating hours in certain locations," CEO Calvin McDonald said in a press statement.
The company now expects fourth-quarter net revenue "to be toward the low end of its range of $2.125 billion to $2.165 billion, and that it expects diluted earnings per share and adjusted diluted earnings per share to be toward the low end of its range of $3.24 to $3.31 and $3.25 to $3.31, respectively."
Shares fell nearly 2% by the end of the session.
Goldman sees four interest rate hikes in 2022:
Goldman Sachs (NYSE: GS) chief economist Jan Hatzius said in a note Sunday that he expects the Federal Reserve to raise interest rates more than expected this year due to the combination of high inflation and a near fully employed labor market.
Hatzius anticipates that the central bank will enact four quarter-percentage point rate hikes in 2022, representing an even more hawkish policy than even the Fed's indications announced just a month ago. The Fed's benchmark rate is currently in a range between 0%-0.25%.
"Declining labor market slack has made Fed officials more sensitive to upside inflation risks and less sensitive to downside growth risks," Hatzius wrote. "We continue to see hikes in March, June, and September, and have now added a hike in December for a total of four in 2022."
Goldman had previously forecasted three hikes, in line with the level Fed officials currently anticipate.
Here's how market benchmarks started trading soon after opening bell:
S&P 500 Index: -0.70% or -32.62 points to 4,644.41
Dow Jones Industrial Average: -0.32% or -114.81 points to 36,116.85
Nasdaq Composite Index: -1.20% or -189.40 points to 14,765.79