STOCKS RALLY, OIL SURGES: Here's what you need to know (USO, WTI, OIL, VDE, SPY, SPX, DJI, IXIC, USD, TLT, TLY, DXY, AGN, PFE, BHI, HAL, YHOO)

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Stocks rallied to new highs after the afternoon release of the Federal Reserve's March meeting minutes in Washington.

The S&P 500 earned its biggest gain in over three weeks. 

Crude oil surged after government data showed that US inventories fell last week by the second-biggest amount of the year. 

First, the scoreboard: 

• Dow: 17,716.05, +112.73, (0.64%)
• S&P 500: 2,066.66, +21.49, (1.05%)
• Nasdaq: 4,920.71, +76.78, (1.59%)
• WTI crude oil: $37.75, +$1.86, (+5.18%)

Fed split

There must have been a fierce debate at the Fed's March meeting.

Minutes out today showed that the policy-setting committee members were divided over whether to raise interest rates in April — a move that would have blindsided markets completely.

Those who were pressing for a hike argued that it may be possible that the economic data evolve in a manner that calls for the increase.

Members against said that a hike in April would be somewhat premature and send an unnecessarily urgent message, because the factors holding down economic growth are likely to fade slowly. There were also concerns that the Fed would get boxed into calendar-date commitments instead of being nimble based on the data. 

Pantheon Macroeconomics' Ian Shepherdson wrote in a note: "The clear message from the March FOMC minutes is that the Fed is split on two major issues, namely, the extent to which the recent increase in core inflation will be sustained, and the extent to which U.S. economic activity will be constrained by weak global growth."

The minutes reiterated that the Fed is still concerned about negative spillover from the global economy to US inflation and employment. RBC's Tom Porcelli characterized this as a new mandate. And so, you could loosely argue that the Fed has four mandates — full employment and price stability (official), market stability and global-market stability (unofficial). 

And as Business Insider's Bob Bryan pointed out via Bespoke Investment's George Pearkes, the Fed highlighted two labor-market indicators as evidence that the economy is not yet at full employment. (In other words, you should also be watching these two metrics very closely.)

The first is involuntary part-time workers, or people not working full-time for economic reasons. They still outnumber the pre-recession tally, at 6.1 million. And, the employment-to-population ratio, or people ages 25 to 54 who are working. At 77.2% of prime-age workers employed, it's lower than in any pre-recession month since June 1986.

Deal breaker

That's what the US government looked like today.

It started with news ahead of the market open that drugmakers Pfizer and Allergan abandoned their planned merger.

The Treasury Department on Monday unveiled new rules to tackle tax inversion, and their $160 billion transaction would have been the biggest example of a deal motivated by the desire to dodge US tax laws. 

The companies would have benefited tax-wise from being based in Ireland, where Allergan is. 

"This administration and these types of policies hurt America's ability to compete on a global scale," Allergan CEO Brent Saunders told CNBC. He also said, "I personally am an American and am a patriot."

Business Insider's Lydia Ramsey reports that there are now three scenarios for New York-based Pfizer:

• It could try to move its headquarters again under the new rules, but without Allergan's solid portfolio that includes Botox.
• It could split up, like it had been discussing before the Allergan deal. 
• A plan C that no one has wind of yet. 

Goldman Sachs, Centerview Partners, Guggenheim, and Moelis had been advising Pfizer, while JPMorgan and Morgan Stanley were with Allergan. They now stand to lose 90% of $236 million in fees they would have earned, according to consulting firm Freeman & Co. 

And on Halliburton and Baker Hughes, there was bad news: the Department of Justice has filed an antitrust lawsuit to block their merger.

Halliburton is the second-largest oilfield services company in the world. Baker Hughes is the third-largest, and Halliburton wants to buy it. 

The deal would "skew energy markets and harm American consumers," attorney general Loretta Lynch said in a statement.  

The DOJ was particularly upset that even though Halliburton said it would sell some of the new company's assets, it would still keep the most valuable employees, facilities, etc that make it harder for smaller companies to compete. 

But both companies say they would "vigorously contest" the DOJ's suit, and argued that their merger is pro-competitive. 

Bill Ackman

He held a call with investors. 

The last few months have been brutal for his hedge fund Pershing Square Holdings. It's having the worst month in its history. It fell 25.6% in the first quarter.

The big, obvious loser for the firm has been Valeant Pharmaceuticals, whose shares have collapsed 83% over the past year. 

Here are some bullet points, via Business Insider's Julia La Roche:

• On the call, Ackman said the fund's performance has "slightly improved" from last week. 
• Air Products and Chemicals, Restaurant Brands, and Canadian Pacific were the "three contributors" in the first quarter.
• "We are certainly responsible with the mark-to-market losses we've suffered ... but unlike some of the press characterization, we have not been involved in the operating model [of Valeant.]" They "have not been in our normal role as an activist shareholder." Pershing Square's Steve Fraidin joined Valeant's board before Ackman later joined.
• "The narrative that this is a company that simply eliminates R&D and drives prices up is not an accurate narrative."
• Ackman calls Valeant a "classic Pershing Square investment."

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