Major benchmarks were largely flat on Wednesday after Reuters reported that a meeting between U.S. President Trump and China's Xi Jinping may be delayed until December, stemming recent optimism that the two countries are close to signing a trade deal.
The Dow Jones Industrial Average (^DJI -1.63%) and the S&P 500 (^GSPC -1.54%) finished on either side of unchanged.
Today's stock market
| Index | Percentage Change | Point Change |
|---|---|---|
| Dow | (0.00%) | (0.07) |
| S&P 500 | 0.07% | 2.16 |
Data source: Yahoo! Finance.
But some individual stocks had robust gains. Shares of HP (HPQ -0.75%) jumped on news of a potential takeover, while investors cheered positive earnings from CVS (CVS 4.35%).
Image source: Getty Images.
Xerox sets its sights on HP
Shares of HP jumped 6.4% after The Wall Street Journal reported that Xerox (XRX) is considering making a cash-and-stock offer to acquire the PC and printer specialist.
WSJ's sources didn't specify exact financial terms for the offer, but did suggest it would represent a premium to HP's market value (prior to the news) of roughly $27 billion. That's an enormous sum by any measure, but one that's particularly notable considering Xerox's market value stands at a significantly smaller $8.25 billion as of this writing.
The timing is no coincidence, however; HP shares were still reeling from a steep drop in October after the company announced a massive restructuring initiative that should result in cost savings of as much as $1 billion annually, including plans to lay off between 7,000 and 9,000 employees. As a combined business, Xerox and HP would likely be able to identify additional cost synergies to further streamline their operations.
While WSJ cautioned there's no guarantee a deal will be made, its sources also said Xerox has secured an "informal funding commitment from a major bank" backing the proposal.
CVS delivers a quarterly beat
Shares of CVS jumped 5.4% after the retail pharmacy chain announced better-than-expected third-quarter 2019 results.
Revenue climbed 36.5% year over year to $64.8 billion. That heady top-line growth was driven primarily by CVS' recent acquisition of Aetna, but also propped up by higher volumes and brand-name drug price inflation at both its pharmacy services and retail segments. On the bottom line, that translated into adjusted net income of $2.4 billion, or $1.84 per share, up from $1.73 per share in the year-ago period.
Analysts, on average, were modeling adjusted earnings of $1.77 per share on revenue closer to $63 billion.
"Our third quarter results build on the positive momentum we have seen across the company since the beginning of the year," CEO Larry Merlo said in a statement. "All of our core businesses performed in line with or above expectations, reflecting strong operational execution."
As such, CVS now expects full-year adjusted earnings per share to be in the range of $6.97 to $7.05, marking an increase from its previous forecast for 2019 earnings per share of $6.89 to $7.00.
