Stocks Meandered Amid Debt Ceiling Turmoil, EU Approves Microsoft's Acquisition of Activision Blizzard

Barry Adams
15 May, 2023
New York City

Stocks on Wall Street lacked direction as investors awaited a resolution to debt ceiling negotiations. 

Benchmark indexes traded sideways after two down weeks in a row after the ongoing rate path and inflation worries were replaced by the debt ceiling uncertainties and regional bank fallout. 

President Joe Biden is expected to meet top Congressional leaders on Tuesday. 

The Treasury Secretary Janet Yellen said in an interview with the Wall Street Journal on Saturday offered hope. 

"I'm told they have found some areas of agreement," Yellen said while attending a meeting of G7 finance ministers in Japan.  

Despite the positive tone, two sides remain apart in how to limit federal government spending and the debt limit increase and duration. 

The Treasury Secretary had said earlier that the U.S. government is expected to run out of cash as early as June 1 if the debt ceiling of $31.4 trillion is not lifted. 

 

U.S. Indexes & Yields 

The S&P 500 index increased 0.82 points to 4,124.78 and the Nasdaq Composite increased 46.30 points to 12,330.26.

The yield on 2-year Treasury notes increased to 4.00%, 10-year Treasury notes edged up to 3.50% and 30-year Treasury bonds held at 3.80%. 

Crude oil rose $0.98 to $71.05 a barrel and natural gas prices rose 10 cents to $2.46 a thermal unit. 

 

U.S. Stock Movers 

Newmont Corporation increased 1.4% to $46.60 after the company and Australia-based Newcrest Mining Ltd reached a binding agreement to proceed with the proposal to acquire 100% of Newcrest. 

Newmont agreed to pay 0.4 of Newmont share for each Newcrest share held and shareholders will be entitled to receive a special dividend of up to US$1.0 a share just ahead of the completion of the deal. 

After considering the full amount of the special dividend, the deal value Newcrest Mining at A$29.27 a share an implied equity value of A$26.2 billion and enterprise value for Newcrest of A$28.8 billion

Newcrest shareholders will own 31% of the combined group and value the company at a 30.4% premium to Newcrest’s closing price of A$22.45 per share on February 3, before the first announcement of the deal.  

Microsoft Corp increased 0.1% to $309.40 after the European Union's regulatory arm approved the purchase of Activision Blizzard for $69 billion.  

Activision Blizzard Inc increased 1.1% to $78.27.