U.S. stocks gave up earlier gains in afternoon trading. When the dust settled on Monday, the Dow Jones Industrial Average and S&P 500 each lost 0.45%, while the Nasdaq Composite fell 0.15%. Industrials and utilities led the way lower, while financial stocks rallied.
Despite the selloff, Builders FirstSource (BLDR) was the big winner of the session, gaining 67%. It was merger Monday for the building materials distributor, which bought privately held ProBuild for $1.63 billion in cash.
With the deal, Builders FirstSource will nearly quadruple its annual sales in this fragmented industry and expand beyond the southeastern U.S. The purchase is expected to close in the second half of the year and be immediately accretive to earnings.
The company is a core holding in the Stocks Under $10 model portfolio. Even though we sold nearly half of the position on today's rally, we believe that shares can move into the low teens by the end of the year.
Looking ahead to Tuesday, Bank of America (BAC), Johnson & Johnson (JNJ) and Wells Fargo (WFC) headline the earnings calendar. In the early stages of earnings season, 83% of the companies in the S&P 500 so far have exceeded consensus expectations. According to S&P Capital IQ, this is slightly below the 86% beat rate at the same time last year.
On the economic front, we'll get a look at advance retail sales and producer prices before the opening bell on Tuesday.