Stock Market Wrap Mar. 19
Stocks started the week on a positive note with all three major indexes posting gains of close to 1%. The move follows a down week last week as economic data indicated that, despite signs pointing to a slowing economy, inflation was not being held in check. Tomorrow, the Federal Reserve Open Market Committee begins its next policy meeting. While a rate change isn't expected when the meeting wraps up on Wednesday, investors are hoping the FOMC's policy statement will shed some light on which way it is leaning when it comes to adjusting interest rates later this year.
While economic data and policy statements are on the radar, both were absent today, leaving investors to find direction from a wave of M&A activity. U.S. investors also took a cue from a strong move higher in overseas markets, where recent weakness had helped contribute to uneasiness in the U.S. market. Concerns about the subprime mortgage crisis, meanwhile, remained on the sidelines for today at least, even as the National Association of Home Builders said its index of sales activity for new single-family housing fell to 36 from a reading of 39 in February, which itself was revised down from 40.
Leading the merger headlines were Barclays (NYSE: BCS - News) and ABN AMRO (NYSE: ABN - News) on reports that the two European banks could combine in a deal worth as much as $80 billion. ABN AMRO later confirmed that it is in exclusive talks with Barclays. Community Health Systems (NYSE: CYH - News), meanwhile, topped a private equity bid with a $5.1 billion offer for Triad Hospitals (NYSE: TRI - News) in a deal that would create the country's largest publicly traded hospital operator.
The mergers extended to the oil patch as well, where shallow-water driller Hercules Offshore (Nasdaq: HERO - News) announced its plans to buy oil and natural gas driller TODCO (NYSE: THE - News) for about $2.4 billion. The deal would create the world's fourth-largest fleet of shallow-water rigs. Based on Friday's closing prices, Hercules' offer represents a 28% premium. Elsewhere, utility and telecom infrastructure contractor Quanta Services (NYSE: PWR - News) made a $1.3 billion offer for InfraSource Services (NYSE: IFS - News), a 17% premium. The deal expands Quanta's reach both in terms of geography and services offered.
Today's M&A activity also included a pair of firms announcing plans to be taken private. ServiceMaster (NYSE: SVM - News), parent of Terminix pest control and a provider of housecleaning and landscaping services, was the target of a $4.5 billion bid led by private equity firm Clayton, Dubilier & Rice. Finally, shipping firm EGL (Nasdaq: EAGL - News) announced it has agreed to a management-led buyout worth $1.7 billion. The $38 per share bid eclipsed a prior offer by $2 per share. The stock ended up 6%.
The day's big loser was biotech AtheroGenics (Nasdaq: AGIX - News), which plunged -61% on news that its experimental pill to treat atherosclerosis -- a buildup of fat, cholesterol, and other substances in the inner lining of arteries -- failed to meet its target in a late-stage trial. AtheroGenics had partnered with AstraZeneca (NYSE: AZN - News) on the trial, but Zeneca will now have the opportunity to break off the partnership.
By the BullMarket.com Staff
While economic data and policy statements are on the radar, both were absent today, leaving investors to find direction from a wave of M&A activity. U.S. investors also took a cue from a strong move higher in overseas markets, where recent weakness had helped contribute to uneasiness in the U.S. market. Concerns about the subprime mortgage crisis, meanwhile, remained on the sidelines for today at least, even as the National Association of Home Builders said its index of sales activity for new single-family housing fell to 36 from a reading of 39 in February, which itself was revised down from 40.
Leading the merger headlines were Barclays (NYSE: BCS - News) and ABN AMRO (NYSE: ABN - News) on reports that the two European banks could combine in a deal worth as much as $80 billion. ABN AMRO later confirmed that it is in exclusive talks with Barclays. Community Health Systems (NYSE: CYH - News), meanwhile, topped a private equity bid with a $5.1 billion offer for Triad Hospitals (NYSE: TRI - News) in a deal that would create the country's largest publicly traded hospital operator.
The mergers extended to the oil patch as well, where shallow-water driller Hercules Offshore (Nasdaq: HERO - News) announced its plans to buy oil and natural gas driller TODCO (NYSE: THE - News) for about $2.4 billion. The deal would create the world's fourth-largest fleet of shallow-water rigs. Based on Friday's closing prices, Hercules' offer represents a 28% premium. Elsewhere, utility and telecom infrastructure contractor Quanta Services (NYSE: PWR - News) made a $1.3 billion offer for InfraSource Services (NYSE: IFS - News), a 17% premium. The deal expands Quanta's reach both in terms of geography and services offered.
Today's M&A activity also included a pair of firms announcing plans to be taken private. ServiceMaster (NYSE: SVM - News), parent of Terminix pest control and a provider of housecleaning and landscaping services, was the target of a $4.5 billion bid led by private equity firm Clayton, Dubilier & Rice. Finally, shipping firm EGL (Nasdaq: EAGL - News) announced it has agreed to a management-led buyout worth $1.7 billion. The $38 per share bid eclipsed a prior offer by $2 per share. The stock ended up 6%.
The day's big loser was biotech AtheroGenics (Nasdaq: AGIX - News), which plunged -61% on news that its experimental pill to treat atherosclerosis -- a buildup of fat, cholesterol, and other substances in the inner lining of arteries -- failed to meet its target in a late-stage trial. AtheroGenics had partnered with AstraZeneca (NYSE: AZN - News) on the trial, but Zeneca will now have the opportunity to break off the partnership.
By the BullMarket.com Staff
Labels: ABN, AGIX, AZN, BCS, CYH, EAGL, HERO, IFS, PWR, SVM, THE, TRI
posted by Stock Administrator @ 8:05 PM
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