Stocks largely lost ground on Tuesday, although the tech sector showed resilience amid the announcement of a major merger.
As virus cases continue to rise in the U.S. and Europe — and the flu season is only just beginning — markets are once again looking to case numbers with some degree of concern.
The Dow Jones Industrial Average lost 222 points, or 0.8%, to finish at 27,463.
AMD, Xilinx agree to $35 billion tie-up. The semiconductor space continues to consolidate; chipmaker Advanced Micro Devices (ticker: AMD) agreed to buy rival Xilinx ( XLNX) for $35 billion in an all-stock deal. Using shares as currency for such transactions is one major benefit of going public, and given the fact that AMD stock is up about more than 70% in 2020, now’s not a bad time to make a deal.
The merger is seen as a further blow to Intel ( INTC) and its dominance in the data center, an area of growing demand and high opportunity. AMD has begun to visibly leapfrog Intel in important technical areas this year, including the ability to make 7-nanometer chips, which AMD currently makes but Intel is pushing back to 2022.
XLNX stock jumped nearly 8.6% on the news.
Shopify x TikTok. One of the hottest topics — and most sought-after partnerships — in corporate America this year has been the increasingly popular social media video app TikTok. Not one to waste an opportunity, e-commerce company Shopify ( SHOP) is teaming with the app in a deal that will let its merchants post videos that can convert to direct sales in their Shopify stores.
SHOP stock rose 4.3% on the news.
Musk’s move to connect the world. One of Tesla ( TSLA) CEO Elon Musk’s other companies, SpaceX, is launching a beta test of its satellite internet service, Starlink, for $99 a month plus a $499 upfront cost to order the Starlink Kit. Although it’s unlikely to be a major moneymaker right out of the gate, its goal is to bring strong internet connections to the entire world, regardless of how remote the area.
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