Here are five things you must know for Friday, Jan. 3:
1. -- Stock Futures Sink After U.S. Forces Kill Key Iranian General
U.S. stock futures sank Friday and oil prices surged after a U.S. military strike killed Gen. Qassem Soleimani, the head of Iran’s Quds Force, at the Baghdad airport.
"At the direction of the president, the U.S. military has taken decisive defensive action to protect U.S. personnel abroad by killing Qassem Soleimani," the Pentagon said in a statement, adding the general was "actively developing plans to attack American diplomats and service members in Iraq and throughout the region."
Contracts linked to the Dow Jones Industrial Average declined 341 points, futures for the S&P 500 tumbled 43 points and Nasdaq futures dropped 130.25 points.
News that Soleimani was killed could draw Iranian retaliation against Israeli and American interests, according to experts.
“A big fat dollop of geopolitical uncertainty has landed on investors' desks,” said Jeffrey Halley of Oanda.
Stocks closed at record highs Thursday, the first trading day of 2020, as investors kicked off the new trading year in a buoyant mood driven by the prospect of a formal trade agreement between Washington and Beijing and moves by China to boost its economy.
The Dow Jones Industrial Average on Monday closed up 330.36 points, or 1.16%, to 28,868.80, the S&P 500 rose 0.84% to 3,257.85, and the Nasdaq climbed 1.33% to 9,092.19.
2. -- Oil Prices Surge on Killing of Iranian Commander
Global oil prices surged on news that U.S. forces killed the Iranian general in Iraq, and as Iran's supreme leader, Ayatollah Ali Khamenei, vowed to seek revenge on American targets with the help of allies around the Muslim world.
The ayatollah warned Friday that a “harsh retaliation is waiting” for the United States.
Brent crude futures contracts for February delivery, the global benchmark, were rising 4.47% on Friday to $69.21 a barrel, while West Texas Intermediate crude contracts for the same month jumped 4.32% to $63.82.
3. -- Manufacturing Data, Oil Inventories, FOMC Minutes Highlight Friday's Calendar
The economic calendar in the U.S. Friday includes the ISM Manufacturing Index for December at 10 a.m. ET, Construction Spending for November at 10 a.m., Oil Inventories for the week ended Dec. 27 at 11 a.m. and minutes from the Federal Reserve’s Dec. 10-11 meeting at 2 p.m.
4. -- Illumina Abandons $1.2 Billion Acquisition of Pacific Biosciences
Illumina ILMN, the gene sequencing company, abandoned its $1.2 billion agreement to acquire rival Pacific Biosciences (PACB) after the Federal Trade Commission last month raised concerns about the deal.
"Considering the lengthy regulatory approval process the transaction has already been subject to and continued uncertainty of the ultimate outcome, the parties decided that terminating the agreement is in the best interest of their respective shareholders and employees," the companies said in a statement.
The FTC said it would block Illumina’s acquisition of Pacific Biosciences, alleging that Illumina was unlawfully seeking to maintain its monopoly in the U.S. market for next-generation DNA sequencing systems by eliminating potential competition from Pacific Biosciences.
Illumina will pay Pacific Biosciences a termination fee of $98 million.
Illumina shares were inactive in premarket trading. Pacific Biosciences rose 4.46% to $5.39.
5. -- Incyte Sinks as Phase 3 Trial for Promising Treatment Fails
Shares of Incyte (INCY) fell 11.38% to $76.19 in premarket trading Friday after a Phase 3 trial of the biotech company's treatment for graft vs. host disease didn't meet its primary endpoint.
Incyte's study evaluated itacitinib in combination with corticosteroids to treat acute graft vs. host disease. In GvHD, donated bone marrow or peripheral blood stem cells view the recipient's body as foreign, and the donated cells/bone marrow attack the body, according to Cleveland Clinic.
The treatment, Incyte said, vs. placebo "was not statistically significant."