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Emirati Shares Start US Fed Week Upbeat; Dubai Residential REIT Gains

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-- Stocks in the United Arab Emirates kicked off a new trading week in the green as investors shifted their focus to the US Federal Reserve's closely watched interest rate decision due later in the week.

At the close of Monday trading, the FTSE ADX General Index added 0.397%, while the DFM General Index gained 0.281%.

On the economic calendar this week is the release of the US Fed interest rate decision on Wednesday, with analysts expecting the federal funds rate to remain unchanged within the 3.50% to 3.75% range. Other major central banks in Japan, Canada, and England will also announce their interest rate policies this week.

"Faced with rising energy prices and higher inflation, and both consumption and employment holding up, the Fed will have to tread carefully to avoid making the mistakes of 2022. There is no way the Fed is in a position to signal the 'all-clear' on inflation, and with equity markets at their highs, the Fed may be inclined to warn of the need for rates to stay unchanged for longer," ING said.

On the geopolitical front, US President Donald Trump canceled the visit of his officials to Pakistan scheduled for the weekend, stating that Iran would need to call if they want to continue negotiations. Reuters reported, citing US news outlet Axios, that Iran offered a new proposal to the US to open the Strait of Hormuz and to postpone talks related to the former's nuclear program to a later stage.

Back home and on the corporate front, Emirates Driving Co. (ADX:DRIVE) reported a higher attributable profit and a 13% increase in revenue due to high student enrollments. The Abu Dhabi-listed driver training school operator's stocks closed the session 0.67% higher.

Dubai Residential REIT (DFM:DUBAIRESI) added 2.61% after its first-quarter revenue jumped 8.4% year-on-year, backed by strong leasing activity and growth in the real estate investment trust's core residential segments.

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United Airlines CEO Confirms Approach to American Regarding Potential Merger

United Airlines (UAL) Chief Executive Scott Kirby confirmed Monday that he approached fellow carrier American Airlines (AAL) about a possible merger, but the latter declined to engage and closed the door on a deal.A potential combination between the two companies could have expanded service to "smaller communities," increased the total number of economy seats in the marketplace, offered affordable prices to customers and built a more globally competitive US airline, Kirby said in a statement. The merger could have boosted the US economy and created "millions of jobs," among other benefits, Kirby added."I was hoping to pitch that story to American, but they declined to engage and instead responded by publicly closing the door," Kirby said. "Without a willing partner, something this big simply can't get done."American Airlines didn't immediately respond to' request for comment.American Airlines shares were down 2.7% in Monday afternoon trade, while United Airlines fell 1.4%.Earlier this month, American Airlines said it wasn't interested in any talks regarding a merger with United Airlines, adding that it would be "negative for competition and for consumers." Any deal would also have been "inconsistent" with the Trump administration's philosophy towards the industry and antitrust law, the company said at the time.During an earnings conference call with analysts last week, American Airlines CEO Robert Isom said a potential combination with United Airlines would have been "anticompetitive.""Everybody that has weighed in suggests the same thing," Isom told analysts, according to a FactSet transcript. "Bad for customers, bad for the industry, and then ultimately -- that'd be bad for American Airlines."American Airlines' public comments "make it clear that a merger like this is off the table for the foreseeable future," Kirby said Monday.US President Donald Trump reportedly voiced his opposition to the combination in a recent interview with CNBC, saying he didn't "like" having the two airlines merge.Last week, American Airlines reported that its first-quarter adjusted per-share loss narrowed year over year, while operating revenue increased. The carrier cut its 2026 earnings outlook at the time. Separately, United Airlines reported better-than-expected first-quarter results, but lowered its full-year earnings outlook amid rising fuel costs.Price: $91.69, Change: $-1.31, Percent Change: -1.41%

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Sector Update: Health Care Stocks Softer in Afternoon Trading

Health care stocks were lower Monday afternoon with the NYSE Health Care Index easing 0.1% and the State Street Health Care Select Sector SPDR ETF (XLV) decreasing 0.2%.The iShares Biotechnology ETF (IBB) shed 0.2%.In corporate news, Eli Lilly (LLY) said Monday it has agreed to acquire Ajax Therapeutics for up to $2.3 billion in cash. The deal includes an upfront payment and subsequent payouts based on the achievement of clinical and regulatory milestones, the company said. Lilly shares were down 0.5%.Organon (OGN) shares jumped 17% after the company agreed to be acquired by India's Sun Pharmaceutical Industries $14 a share in cash, valuing the company at $11.75 billion.Moderna (MRNA) is facing a patent infringement lawsuit from CureVac, which alleged that Moderna's COVID-19 vaccine Spikevax used its proprietary mRNA technology without authorization, Reuters reported Saturday. Moderna shares were falling 3.3%.Catalyst Pharmaceuticals (CPRX) is being considered as a potential acquisition by Italy's Angelini Pharma, Bloomberg reported. Catalyst shares rose past 6%.

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Sector Update: Consumer Stocks Decline Monday Afternoon

Consumer stocks were lower Monday afternoon, with the State Street Consumer Staples Select Sector SPDR ETF (XLP) decreasing 0.8% and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) shedding 0.3%.In corporate news, Domino's Pizza (DPZ) reported weaker-than-expected Q1 results on Monday, with the company's CEO saying consumer uncertainty and inflation weighed on demand late in the quarter. Its shares slumped past 9%.Verizon Communications (VZ) lifted its full-year earnings outlook on Monday and reported a Q1 bottom line above market estimates, while it unexpectedly added postpaid phone subscribers in the three-month period. Its shares rose 2.5%.Toyota Motor (TM) reported Monday total worldwide sales of 897,871 vehicles in March, down 7.3% from a year earlier. Toyota shares were fractionally higher.

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