Stock Market Wrapup Mar. 15
Stocks traded in a fairly narrow range today following Tuesday's plunge and Wednesday's late-day recovery. The day began with data showing a bigger-than-expected jump in producer prices, but some big-name M&A activity helped take the edge off inflation-related investor nervousness. The major indices all closed slightly higher.
Looking at the day's economic data, the Producer Price Index (PPI) jumped by 1.3% in February, well above economist expectations, and the closely watched core rate, which excludes volatile food and energy costs, jumped 0.4% compared to the 0.2% rise that had been expected. The concern here is that further data confirming this outlook for inflation will make the Fed less likely to lower interest rates later this year, as many investors are hoping. The more influential Consumer Price Index (CPI) number will be released tomorrow, and investors will be watching to see if it tracks closely with today's PPI numbers.
In merger news, electronic commodities trading platform Intercontinental Exchange (NYSE: ICE - News) made public an unsolicited bid worth $9.9 billion for Chicago Board of Trade parent CBOT Holdings (NYSE: BOT - News). CBOT rose 17% on the news, while Intercontinental dropped -3%. The announcement also pushed Nymex Holdings (NYSE: NMX - News), parent of the rival New York Mercantile Exchange, 5% higher.
In tech news, Cisco Systems (Nasdaq: CSCO - News) announced it will pay $3.1 billion in cash, or $57 a share, for online videoconferencing firm WebEx Communications (Nasdaq: WEBX - News). Excluding WebEx's cash, the deal is worth $2.9 billion. The deal continues Cisco's trend of moving beyond the router and equipment business to providing a wider array of networking services. WebEx gained 22% on the news, while Cisco finished little changed.
Subprime lenders remained highly volatile, and several beaten-down stocks in the sector recorded eye-popping gains as acquirers appeared to be massing on the sidelines, readying bids for these now cheap companies. Leading the pack was Accredited Home Lenders (Nasdaq: LEND - News), which climbed 56% on the day, but Novastar Financial (NYSE: NFI - News) and Fremont General (NYSE: FMT - News) also registered big gains.
One of those potential buyers is Bear Stearns (NYSE: BSC - News), which reported FQ1 earnings today and said it would consider buying subprime lenders or pieces of their portfolios at the depressed prices offered by the recent market turmoil. Bear Stearns, the top underwriter of mortgage-backed securities in the country, said that problems with the subprime market had not spread to the broader mortgage market. For FQ1 ended February 28th, Bear Stearns beat EPS estimates and reported essentially in-line revenue for the quarter. Investors responded by pushing the stock 2% higher.
By the BullMarket.com Staff
Looking at the day's economic data, the Producer Price Index (PPI) jumped by 1.3% in February, well above economist expectations, and the closely watched core rate, which excludes volatile food and energy costs, jumped 0.4% compared to the 0.2% rise that had been expected. The concern here is that further data confirming this outlook for inflation will make the Fed less likely to lower interest rates later this year, as many investors are hoping. The more influential Consumer Price Index (CPI) number will be released tomorrow, and investors will be watching to see if it tracks closely with today's PPI numbers.
In merger news, electronic commodities trading platform Intercontinental Exchange (NYSE: ICE - News) made public an unsolicited bid worth $9.9 billion for Chicago Board of Trade parent CBOT Holdings (NYSE: BOT - News). CBOT rose 17% on the news, while Intercontinental dropped -3%. The announcement also pushed Nymex Holdings (NYSE: NMX - News), parent of the rival New York Mercantile Exchange, 5% higher.
In tech news, Cisco Systems (Nasdaq: CSCO - News) announced it will pay $3.1 billion in cash, or $57 a share, for online videoconferencing firm WebEx Communications (Nasdaq: WEBX - News). Excluding WebEx's cash, the deal is worth $2.9 billion. The deal continues Cisco's trend of moving beyond the router and equipment business to providing a wider array of networking services. WebEx gained 22% on the news, while Cisco finished little changed.
Subprime lenders remained highly volatile, and several beaten-down stocks in the sector recorded eye-popping gains as acquirers appeared to be massing on the sidelines, readying bids for these now cheap companies. Leading the pack was Accredited Home Lenders (Nasdaq: LEND - News), which climbed 56% on the day, but Novastar Financial (NYSE: NFI - News) and Fremont General (NYSE: FMT - News) also registered big gains.
One of those potential buyers is Bear Stearns (NYSE: BSC - News), which reported FQ1 earnings today and said it would consider buying subprime lenders or pieces of their portfolios at the depressed prices offered by the recent market turmoil. Bear Stearns, the top underwriter of mortgage-backed securities in the country, said that problems with the subprime market had not spread to the broader mortgage market. For FQ1 ended February 28th, Bear Stearns beat EPS estimates and reported essentially in-line revenue for the quarter. Investors responded by pushing the stock 2% higher.
By the BullMarket.com Staff
posted by Stock Administrator @ 6:18 PM
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