Dow tumbles 300 points, S&P 500 declines as little outside of Nvidia is working: Live

ConocoPhillips has agreed to buy Marathon Oil in an all-stock transaction worth $17 billion, bolstering the company’s shale assets as the broader oil and gas industry undergoes a major wave of consolidation.

The deal will add 2 billion barrels of resources to ConocoPhillips’ inventory in the U.S., extending the company’s reach across shale fields in Texas, New Mexico and North Dakota.

ConocoPhillips’ stock was down more than 3% in morning trading following the announcement as Marathon Oil shares surged more than 8%.

ConocoPhillips’ purchase of Marathon Oil follows blockbuster deals announced last fall by its two bigger rivals, Exxon Mobil and Chevron, as the industry undergoes a transformational wave of consolidation.

Marathon Oil transaction, which is expected to close in the fourth quarter, would grow ConocoPhillips’ earnings, cash flow and shareholder returns after the deal closes in the fourth quarter, CEO Ryan Lance said. ConocoPhillips expects share buybacks worth $7 billion in the first year after the deal is completed and $20 billion in the first three years.

— Spencer Kimball

Stocks kicked off Wednesday’s session down.

The Dow slipped 0.9% shortly after 9:30 a.m. ET. The S&P 500 and Nasdaq Composite each slipped 0.7%.

— Alex Harring

It has been good earnings season for apparel retailers. Abercrombie & Fitch is the latest example, with its outstanding report this morning – and it’s a clear sign that the company’s namesake brand is back in favor.

Sales in the latest quarter topped $1 billion, soaring 22% from a year ago – far more than the 15% growth Wall Street expected. The company said it was the highest first quarter sales it has ever reported – and it blew away the previous record from more than a decade ago.

But here’s what’s even more compelling about Abercrombie’s report. While most retailers have given tepid second quarter guidance during the last couple of weeks, Abercrombie is bucking the trend. The teen retailer is expecting sales to grow at a mid-teens rate in the current quarter – far better than the 9% growth Wall Street has forecasted. And don’t forget, all this comes before the critical back-to-school selling season in the third quarter.

— Robert Hum

Dick’s Sporting Goods popped more than 7% in Wednesday premarket trading after first-quarter earnings came in strong, with shoppers shelling out for athletic gear and shoes.

The retailer earned $3.30 per share on $3.02 billion in revenue, while analysts polled by LSEG forecasted $2.95 a share and $2.94 billion. Given the strong quarter, the company raised its full-year outlook.

Shares have climbed more than 32% in 2024.

— Alex Harring, Gabrielle Fonrouge

ConocoPhillips is in talks to take over Marathon Oil in an all-stock deal that values the energy company just north of $15 billion, The Financial Times reported.

The report, which cites people briefed on the matter, said a deal appeared to be imminent late Tuesday, but added there was a chance the talks would apart.

Marathon Oil shares jumped 5.8%, while ConocoPhillips slipped 0.7%.

European stocks opened lower on Wednesday, with the Stoxx 600 index 0.2% lower at 8:22 a.m. in London.

France’s CAC 40 index fell 0.35%, Germany’s DAX dipped 0.2%, and the U.K.’s FTSE 100 was just below the flatline.

Both Adani Group and Paytm’s parent company, One 97 Communications, denied a local media report that Adani is looking to buy a stake in the Indian fintech firm.  

The Times of India reported, citing sources familiar with the matter, that Gautam Adani was looking to buy a stake in Paytm. The report also said Paytm founder and chief executive officer, Vijay Shekar Sharma, also met at Adani’s office in Ahmedabad on Tuesday.

One 97 Communications called the report “speculative” and said it is not engaged in any discussions on the matter.

“We are denying any such discussions,” an Adani spokesperson told CNBC, regarding talks with Paytm.

Shares of One 97 Communications jumped nearly 5% in early trading. Adani Enterprises shares edged 0.2% higher.

— Shreyashi Sanyal, Naman Tandon

A union at Samsung Electronics announced it will take strike action on June 7, which would be the first time in the company’s history that workers have elected to stop work.

The National Samsung Electronics Union, known as Jeonsamno in South Korea, accounts for about 28,000 workers, or more than a fifth of the electronics giant’s workforce.

The strike comes amid stalled wage negotiations between the union and the South Korean tech giant, which have been ongoing since January.

Shares of Samsung fell 1.16% on Wednesday.

— Lim Hui Jie

Official data showed Australia’s consumer prices in April rose 3.6% year on year, more than expectations.

The reading for the weighted consumer price index in April was greater than the 3.4% gain forecast in a Reuters poll. It was also higher than the 3.5% increase in CPI reported for March.

“Inflation has been relatively stable over the past five months, although this is the second month in a row where annual inflation has had a small increase,” said Michelle Marquardt, head of prices statistics at the Australian Bureau of Statistics.

The data showed increases in prices for housing, food and non-alcoholic beverages, alcohol and tobacco and transport as the most significant contributors to the April reading.

— Shreyashi Sanyal

The major benchmarks hitting all-time highs without broad participation have investors concerned about the health of the rally. However, one technician says that poor breadth does not necessarily equate to a weak market.

“If you’re looking at the market, I still think the market appears healthy because the largest names still appear very healthy,” said JC O’Hara, chief technical strategist at Roth MKM. He cited Nvidia’s jump Tuesday, a 6% increase, as an example.

“When that has a big influence on the index, I think the index is fine. It’s just that when you’re a stock picker, your pool of potential candidates for great buying opportunities is shrinking,” he said.

CNBC Pro subscribers can read the full story here.

— Sarah Min

The problem is markets are “priced for perfection.”

That’s the view expressed by Morgan Stanley Wealth Management on Tuesday in a 15-page report by chief investment officer Lisa Shalett.

Even when inflation and interest rates come down, their bottom “will remain well above recent business-cycle lows, but this scenario is barely reflected in current market pricing,” according to the report. “With above-average uncertainties, markets priced for perfection, historically rich valuations and apparent investor complacency, we are focused on risk-adjusted returns and have little interest in taking on duration in either stocks or bonds right now,” the arm of Morgan Stanley that services high net worth clients wrote.

Stocks have powered to all-time highs “despite rising uncertainty about economic outcomes, potential policy responses and the upcoming presidential election,” largely driven by rising price-to-earnings multiples investors are willing to pay.

The market’s expensive, Shalett wrote. “The forward price/earnings multiple is in the 90th percentile for the last 100 years.” An implied p/e of 21 times future earnings on the S&P 500 “is one of the highest forward multiples in the last 35 years, rivals the 2021 high, [and] approaches the all-time high hit in the dotcom bubble,” she wrote.

— Scott Schnipper

Want to get a sense of how big Nvidia has become? Let’s put it this way: The chipmaker’s $2.802 trillion market cap is more than $1 trillion larger than that of the entire S&P 500 energy sector. The added market cap of each stock in the sector comes out to about $1.767 trillion.

Nvidia popped 6.98% on Tuesday, hitting a fresh record and building on its surge from last week. Year to date, the stock has jumped 130%. It is up more than 31% just this month.

Stock futures were mixed Tuesday evening.

Futures tied to the 30-stock Dow slipped 34 points, or nearly 0.1%. S&P 500 futures shed 0.03%, while Nasdaq 100 futures added 0.03%.

— Pia Singh