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Stock Markets Stay Flat as Oracle Makes a TikTok Play, Carnival Gets Cyberattacked

By Dan Caplinger – Aug 18, 2020 at 12:17PM

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Market participants seem to be more uncertain than ever.

Tuesday morning once again showed the ambivalence among stock market investors that's plagued Wall Street for weeks now. Even though investors are enthusiastic about the long-term prospects for some of the best growth stocks in the market, they seem less convinced about the direction of the overall economy and its impact on the average company. That's why there are continuing disparities across major benchmarks. Just after 11 a.m. EDT, the Dow Jones Industrial Average (^DJI 0.45%) was down 92 points to 27,753. However, the S&P 500 (^GSPC -0.03%) kept its losses to a single point at 3,381, and the Nasdaq Composite (^IXIC -0.52%) rose 36 points to 11,166 and pushed further into record territory.

Among individual stocks, several crosscurrents affected different industries. In the tech sector, Oracle (ORCL 0.19%) is apparently stepping up to go after a highly prized social media asset. Meanwhile Carnival (CCL) has had to deal with the full brunt of the COVID-19 pandemic throughout most of 2020, but its latest challenge came from a completely different quarter.

Oracle looks for new direction

Shares of Oracle climbed almost 3% Tuesday morning. Investors tried to integrate new information on the merger and acquisition front into their views of the software company, but the particular deal under consideration makes it tough to do.

Reports have come out that Oracle is talking with Chinese social media company ByteDance, which owns the popular TikTok video service. The news gives front-runner Microsoft (MSFT -0.04%) some added competition, potentially throwing a wrench into the process of TikTok trying to find a buyer.

Oracle would take a different approach toward TikTok than Microsoft. Unlike other companies looking at the video service, Oracle would get almost no operational benefit from the acquisition, because its existing business doesn't really overlap with TikTok's. Instead, Oracle would look at TikTok purely as an investment, with a set exit strategy rather than the goal of integrating the division into the rest of its offerings.

With the clock running on an executive order that would prevent U.S. companies from doing business with a ByteDance-controlled TikTok, the pressure to get a deal done is mounting. Adding Oracle to the mix makes for an interesting new twist on the tech stock deal.

Cruise ship just off the coast of an island, with a beach and small island nearby.

Image source: Getty Images.

Cybercriminals target the cruise ship business

Shares of Carnival were down more than 1% Tuesday morning. As if the cruise ship operator hadn't already gone through enough given coronavirus-forced suspensions of its fleet, Carnival got the bad news that it had become the victim of a cyberattack.

Carnival revealed in a filing with the U.S. Securities and Exchange Commission that it had detected a ransomware attack. According to the company, hackers got access to the IT systems of one of its brands. They then encrypted a portion of vital data and downloaded some of Carnival's data files. Although it sees no material financial impact, Carnival admitted that unauthorized access to personal data of guests and employees could lead to tort claims and regulatory penalties.

Some cruise lines under the Carnival corporate umbrella have already come close to giving up on 2020 entirely. Several countries maintain no-sail orders, while even those that don't could still require burdensome measures to protect passengers.

A cyberattack was the last thing Carnival needed. Even as it takes steps to secure its data, Carnival desperately wants to start operating cruises again in order to bring in some much-needed revenue.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Microsoft. The Motley Fool recommends Carnival and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool has a disclosure policy.

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