Wall Street on Track for Records as Energy Overshadows Telecom Pressure

Wall Street was on track to close with records on Monday, Nov. 6, even with just small gains as a rally in crude oil boosted energy names and overshadowed a failed deal that hit major telecoms.

Benchmark indexes managed to hold slight to modest gains through to mid-afternoon. The Dow Jones Industrial Average was up 0.1%, the S&P 500 gained 0.15%, and the Nasdaq added 0.3%. Any gains for the three indexes through to the close of trading would mark new closing records -- the three ended Friday's session at all-time highs.

Sprint Corp. (S)  dragged on the telecom sector, falling 10%, after merger talks with T-Mobile US Inc. (TMUS) were called off and even as its majority owner, Softbank Group Corp. (SFTBY) , said it would increase its stake in the U.S. carrier. Sprint and T-Mobile officially called off merger talks on Saturday, Nov. 4, saying they were "were unable to find mutually agreeable terms."

Softbank said on Sunday, Nov. 5, that it intends to increase its stake in Sprint. Softbank already owns 82.87% of Sprint, according to FactSet, and said that it doesn't intend to increase its stake to more than 85%.

Oil prices hit two-year highs following a weekend purge by Saudi Arabia's crown prince of his political rivals and the arrest of what was essentially the country's best-known international investor -- Prince Alwaleed bin Talal. The crackdown will consolidate Crown Prince Mohammed bin Salman's grip on power, a notably pro-OPEC force in Saudi politics, making it even more likely that the oil cartel's production caps will be extended, according to analysts.

OPEC and Russia have withheld about 1.8 million barrels per day of production since the start of the year in a bid to drain bloated oil reserves. That deal is due to run until March 2018, though comments from signatories to the cuts including Saudi Arabia, Iraq and Russia, have all strongly backed an extension.

West Texas Intermediate crude was up 3.4% to $57.52 a barrel on Monday.

Energy stocks were the best performers on Monday. Royal Dutch Shell PLC (RDS.A) , Chevron Corp. (CVX) , PetroChina Co. Ltd. (PTR) , BP PLC (BP) , Schlumberger Ltd. (SLB) , and Petrobras (PBR) were all higher. The Energy Select Sector SPDR ETF (XLE) increased 1.8%. 

Schlumberger is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells SLB? Learn more now.

Broadcom Ltd. (AVGO) made a $103 billion offer to acquire Qualcomm Inc. (QCOM) in what would be the largest tech deal ever. Broadcom, which was purchased by Avago Technologies in 2015, offered $70 a share in a cash-and-stock deal on Monday. The offer was unsolicited.

Broadcom's offer consists of $60 in cash and $10 in stock for each of Qualcomm's nearly 1.5 billion shares, a deal that values Qualcomm at a 13% premium to its Friday close and at a total market cap of $103.2 billion. Broadcom has reportedly been working on a deal for months.

The Broadcom proposal still stands whether Qualcomm's pending acquisition of NXP Seminconductors NV (NXPI) comes to fruition.

Broadcom and NXPI are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells AVGO? Learn more now.

Advanced Micro Devices Inc. (AMD) rallied on reports the semiconductor developer planned to partner with Intel Corp. (INTC) to freeze out Nvidia Corp. (NVDA) , according to The Wall Street Journal. The collaboration on a chip will likely see AMD's graphic unit paired with Intel's processor and used in laptop devices.

Other tech stocks such as NXP Semiconductors, Microchip Technology Inc. (MCHP) , Maxim Integrated Products Inc. (MXIM) , Qorvo Inc. (QRVO) , ON Semiconductor Corp. (CY) , and MACOM Technology Solutions Holdings Inc. (MTSI) were higher on Monday. The S&P Semiconductor SPDR ETF (XSD) added more than 2%.

In other deal news Monday, 21st Century Fox (FOXA) has held talks to sell most of its company to Walt Disney Co. (DIS) , according to CNBC. It is not certain that a deal could come from discussions held in recent weeks. 21st Century Fox and Disney shares were sharply higher. 

President Donald Trump had an uneasy start to his five-country tour of Asia. Trump complained Monday that Japan had been "winning" for decades and rebuked the current relationship, saying the trade deals were "not fair and not open." The Associated Press reported that the president told a group of American and Japanese business leaders that he wanted to reshape the trade relationship between the two countries. 

Trump also implored the country to build more Japanese vehicles in the U.S. rather than shipping them. However, as of 2016, three out of every four Japanese cars sold in the U.S. were built in North America. 

New York Federal Reserve President William Dudley will retire in mid-2018, before his term ends in January 2019, the New York Fed confirmed Monday. Dudley, 64 years old, has been president of the bank since 2009 and helped oversee one of the largest interventions by the government into the financial market during the recession crisis.

In earnings, Mylan NV (MYL)  rose despite falling short of earnings estimates. The drugmaker swung to a profit of 16 cents a share from 23 cents in the year-ago quarter. Adjusted earnings of $1.10 a share came in below estimates of $1.20. Revenue of $2.987 billion missed an analysts' target of $3.077 billion. The company said sales of its EpiPen continued to slow this quarter, partly the result of a new generic version. 

CVS Health Corp. (CVS)   fell even after better-than-expected profit and sales over its third quarter. The pharmacy chain earned $1.26 a share, down from $1.43 a share a year earlier. However, adjusted earnings of $1.50 a share came in 2 cents above expectations. Revenue of $46.18 billion was in-line with estimates. Pharmacy same-store sales declined 3.4%, a shallower drop than an anticipated 3.9% decline. Front-end same-store sales fell 2.8%, better than a targeted 3.4% decrease. 

Sysco Corp. (SYY) topped profit and sales estimates over its recent quarter as strength in its international food service unit drove overall growth. Adjusted earnings of 74 cents a share exceeded forecasts by two cents. Sales increased nearly 5% to $14.65 billion and beat expectations by $230 million.   

Michael Kors Holdings Ltd. (KORS) also reported a better-than-expected quarter. Earnings increased to $1.32 a share from 95 cents a year earlier. Adjusted earnings of $1.33 a share roared past an anticipated 83 cents. Revenue of $1.15 billion exceeded consensus of $1.05 billion. For fiscal 2018, Michael Kors anticipates revenue of $4.59 billion, higher than its previous target of $4.28 billion, and for earnings of $3.85 to $3.95 a share, above a previous range of $3.62 to $3.72. 

Helios and Matheson Analytics Inc. (HMNY) roared 20% higher to begin the week after agreeing to issue $100 million in convertible notes to institutional investors. Capital raised by the notes will largely be funneled toward its purchase of a majority stake in MoviePass. Helios shares have surged 245% since the beginning of the year.

Updated from 1:41 p.m. ET, Nov. 6. 

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