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State Street Corp. said Monday it will buy Investors Financial Services Corp. for $4.18 billion in stock to expand into providing institutional asset services for the fast-growing hedge fund industry and funds managed overseas.
State Street said it eclipsed other bidders in reaching a deal between two Boston-based firms that would pay IFS investors a 38 percent premium on the value of their shares. Shares of Investors Financial Services soared nearly 28 percent in midday trading, while State Street's stock tumbled 6 percent.

Labels: IFIN, Investors Financial Services Corp., State Street Corp., STT

Stocks drifted throughout a generally quiet trading day and finally closed mixed. The Dow Jones Industrial Average posted a slim gain, but the broader market averages closed lower. The 10-year Treasury note started off the week by moving higher, while crude oil and natural gas prices continued to climb as cold weather gripped a large portion of the nation.
Private equity investments were once again behind some of the day's sharpest gains. Triad Hospitals (NYSE: TRI - News) surged 15% after announcing that it had agreed to be acquired by CCMP Capital Advisors and GS Capital Partners for approximately $4.7 billion, excluding debt. Investor Carl Icahn, meanwhile, offered $2.8 billion for auto parts maker Lear (NYSE: LEA - News). Investors bid up the stock 11% on news of the $36 a share offer, but one current shareholder told The Wall Street Journal that the offer was "ridiculously low." Fellow auto parts makers like Tenneco (NYSE: TEN - News) and ArvinMeritor (NYSE: ARM - News) also closed higher.
In other merger news, State Street (NYSE: STT - News) announced that it would acquire Investors Financial Services (Nasdaq: IFIN - News) for $4.5 billion in an all-stock deal. Investors Financial shot up 27% on the announcement, but investors frowned on State Street, knocking its shares down -6% in the belief that it was overpaying. The companies each provide a variety of advisory and back-office services to institutional investors.
Health insurer Humana (NYSE: HUM - News) reported that Q4 earnings more than doubled, driven by strength in its Medicare business. The company reported profits of $155 million, or 92 cents per share, compared to $62 million, or 37 cents a share, in the year-ago period. Humana also raised its 2007 outlook. It now expects to earn $4.00-4.20 a share, up from its previous estimate of $3.90-4.10 per share. The nation's largest health insurer, in contrast, slipped today after UnitedHealth Group (NYSE: UNH - News) cut its 2007 revenue forecast, citing slippage in its Medicare-related health plans.
Wal-Mart (NYSE: WMT - News) rose after the company announced on Saturday that expected January same-store sales exceeded its earlier conservative forecast. Wal-Mart said same-store sales rose 2.2% last month, topping its estimate for an increase of 1-2%. Wal-Mart also said that starting with February's results, it will release same-store sales figures on the first Thursday of the following months, putting it on the same schedule as the majority of U.S. retailers.
Nursing home operator Kindred Healthcare (NYSE: KND - News) rose 5% after it was upgraded to a "buy" from "hold" by Stifel Nicolaus. Argonaut Group (Nasdaq: AGII - News), which underwrites specialty insurance products, gained 5% after releasing earnings and being upgraded to a "outperform" by Friedman Billings Ramsey. Argonaut reported a profit of $31 million, or 92 cents per share, in Q4, up from $25 million, or 76 cents per share, in the year-earlier quarter.
By Bullmarket.com Staff

Labels: AGII, ARM, HUM, IFIN, KND, LEA, STT, TEN, TRI, UNH, WMT

Wave of mergers has been unable to push stocks higher to start the trading week. A number of multi-billion dollar deals have benefited some individual stocks, but the broader market has stayed close to the flat line Monday. Same-store sales news from Wal-Mart (WMT) and a major order for Boeing (BA) have kept the Dow ($INDU) in the black, but not by much. WMT announced that same-store sales rose 2.2 percent in January, above its prior forecast. The retailing giant didnt go into details, preferring to wait until the official report on Thursday. Nonetheless, WMT shares are up more than one percent on the session. Retailers will be in focus this week as they provide January sales data. The S&P Retail Index ($RLX) is trading slightly in the red in midday action.Boeing shares are up almost one percent Monday as well following a major order from UPS (UPS). BA received an order for 27 Boeing 767-300ER freighters at a list price of $3.9 billion. BA shares have done quite well this past year, up 27 percent. The stock has advanced 12 percent in the past three months alone. In merger news, State Street Corp (STT) has agreed to buy Investors Financial Services (IFIN) for $4.5 billion in stock. IFIN shareholders will receive 0.906 shares of STT for each share of IFIN they own. This values IFIN shares at $65, which is $18 above its closing price on Friday. IFIN shares are up nearly 30 percent on the news. STT shares, as is usually the case, are down more than 5 percent. Other deals include Triad Hospitals (TRI) decision to go private in a deal valued at $6.4 billion. This news has pushed TRI shares up 15 percent on the session. Hanover Compressor (HC) and Universal Compressor (UCO) agreed to merge in a deal valued at $3.8 billion. Both stocks are up sharply on the news at 16 percent and 13 percent respectively.The chip sector has been a story Monday on a downgrade of Micron (MU) and earnings news from KLA-Tencor (KLAC). MU was downgraded to Hold from Buy at Jefferies & Company with the broker not liking the state of deteriorating memory prices. MU shares are down about one percent. KLAC shares are up three percent Monday despite announcing earnings that fell short of expectations. The company has restated past financial dealing with stock option grants and now believes it is not at risk of delisting on the Nasdaq. Overall, the Philly Semiconductor Index ($SOX) is up only slightly on the session.
By Jody Osborne

Labels: BA, HC, IFIN, KLAC, MU, RLX, STT, TRI, UCO, UPS, WMT

Wall Street was narrowly mixed Monday as lingering concerns about the economy offset better-than-expected sales from Wal-Mart Stores Inc. and a flurry of acquisition activity.
Dow Jones industrial Wal-Mart rose after the world's largest retailer said it expected January same-store sales to rise 2.2 percent. Tempering the gain was its projection that sales performance is on track to deliver the lowest growth rate in more than 25 years.
Meanwhile, Wall Street absorbed news of a spate of acquisition and private equity deals -- the largest amount since the start of the year. Triad Hospitals Inc. and Herbalife Ltd. received offers from private equity funds, while State Street Corp. agreed to buy Investors Financial Services Corp.
Investors had little reaction to new data that suggests continued economic growth, which could disrupt the Federal Reserve's plans to ease the economy this year. The Institute of Supply Management's non-manufacturing index, which covers the service sector, increased more than analysts were forecasting.
The market ended mixed Friday after a weaker-than-expected employment report curbed investors' bullish sentiment following three days of straight gains. Also squeezing stocks was continued strength in oil prices, which flirted with $60 per gallon as a cold snap hit the Northeast.
"We're just going to have a topsy-turvy market until investors figure out which direction to take," said Todd Leone, managing director of equity trading for Cowen & Co. "We're seeing some buying come back into the market because there still is a lot of money on the sidelines. And, all these deals announced are really helping the market out."
In late morning trading, the Dow rose 6.65, or 0.05 percent, to 12,646.84.
Broader stock indicators fell. The Standard & Poor's 500 index was down 1.44, or 0.10 percent, at 1,446.95, and the Nasdaq composite index fell 3.09, or 0.12 percent, to 2,472.79.
Treasuries largely shrugged off the ISM numbers. Bonds rose, with the yield on the benchmark 10-year Treasury note down to 4.80 percent from 4.82 percent late Friday.
A barrel of light sweet crude rose 63 cents to 59.62 on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices up.
Wal-Mart rose 58 cents to $48.66 after it announced same-store sales topped its prior forecast for a 1 percent to 2 percent gain. The retailer said colder temperatures in January drove sales of seasonal items.
Triad Hospitals agreed to go private in a $4.7 billion deal from affiliates of CCMP Capital Advisors and Goldman Sachs affiliate GS Capital Partners. Shares surged $6.61, or 15.3 percent, to $49.88.
Nutritional supplement maker Herbalife said it received an acquisition proposal from private investment fund Whitney V LP that values the company at about $2.7 billion. The company said it is reviewing the offer, and its shares spiked $7.04, or 21.3 percent, to $40.14.
Billionaire financier Carl Icahn made a $2.43 billion offer for auto parts supplier Lear Corp. Shares jumped $4.34, or 12.5 percent, to $39.01.
State Street shares fell $3.53, or 4.9 percent, to $68.22 after the custody bank said it would buy Investors Financial Services for about $4.5 billion in stock. The deal, which comes as rivals Mellon Financial Corp. and Bank of New York Corp. plan to combine, sent shares of IFS up $13.95, or 29.7 percent, to $60.90.
Advancing issues led decliners by 4 to 3 on the New York Stock Exchange, where volume came to 398 million shares.
The Russell 2000 index of smaller companies was down 1.53, or 0.19 percent, at 807.89. The index surpassed the 800 mark for the first time last week.
Overseas, Japan's Nikkei stock average closed down 1.15 percent. In afternoon trading, Britain's FTSE 100 was up 0.04 percent, Germany's DAX index fell 0.19 percent, and France's CAC-40 was up 0.10 percent.
Published by Joe Bel Bruno, AP Business Writer

Labels: HLF, Hot Stocks, IFIN, LEA, MEL, STT, TRI, WMT

Wall Street was narrowly mixed in early trading Monday as lingering concerns about the economy offset better-than-expected sales from Wal-Mart Stores Inc. and a flurry of acquisition activity.
Dow Jones industrial Wal-Mart rose after the world's largest retailer said it expected January same-store sales to rise 2.2 percent. Tempering the gain was its projection that sales performance is on track to deliver the lowest growth rate in more than 25 years.
Meanwhile, Wall Street absorbed news of a spate of acquisition and private equity deals -- the largest amount since the start of the year. Triad Hospitals Inc. and Herbalife Ltd. received offers from private equity funds, while State Street Corp. agreed to buy Investors Financial Services Corp.
Investors also looked for more hints about the economy. The Institute for Supply Management's January non-manufacturing index, which covers the service sector, will be released at 10 a.m. EST. The market was narrowly mixed Friday after a weaker-than-expected employment report curbed investors' bullish sentiment following three days of straight gains.
Oil prices flirted with $60 per gallon as a cold snap hit the Northeast. A barrel of light sweet crude rose 81 cents to 59.83 in premarket trading on the New York Mercantile Exchange.
In the first hour of trading, the Dow fell 1.60, or 0.01 percent, to 12,651.89.
Broader stock indicators also fell. The Standard & Poor's 500 index was down 0.86, or 0.06 percent, to 1,447.53, and the Nasdaq composite index rose 3.76, or 0.15 percent, to 2,479.64.
Bonds rose, with the yield on the benchmark 10-year Treasury note down to 4.81 percent from 4.82 percent late Friday. The dollar was mixed against other major currencies, while gold prices up.
Wal-Mart shares rose 30 cents to $48.08 after it announced same-store sales topped its prior forecast for a 1 percent to 2 percent gain. The retailer said colder temperatures in January drove sales of seasonal items.
Triad Hospitals agreed to go private in a $4.7 billion deal from affiliates of CCMP Capital Advisors and Goldman Sachs affiliate GS Capital Partners. Shares surged $6.58, or 15.2 percent, to $43.27.
Nutritional supplement maker Herbalife said it received an acquisition proposal from private investment fund Whitney V LP that values the company at about $2.7 billion. The company said it is reviewing the offer, and its shares spiked $6.40, or 19.3 percent, to $39.50.
State Street shares fell $3.60, or 5 percent, to $68.15 after the custody bank said it would buy Investors Financial Services for about $4.5 billion in stock. The deal, which comes as rivals Mellon Financial Corp. and Bank of New York Corp. plan to combine, sent shares of IFS up $14.05, or 29.9 percent, to $61.
The Russell 2000 index of smaller companies was up 0.80, or 0.10 percent, to 810.22.
Overseas, Japan's Nikkei stock average fell 1.15 percent. In afternoon trading, Britain's FTSE 100 was up 0.10 percent, Germany's DAX index fell 0.12 percent, and France's CAC-40 was up 0.13 percent.
Published by Joe Bel Bruno, AP Business Writer

Labels: HLF, Hot Stocks, IFIN, MEL, STT, TRI, WMT

Allegiant Travel Co. (NasdaqGM:ALGT - News) was initiated with a buy rating at Merrill Lynch. The firm set a 12-month price target on the stock of $36. Bear Stearns also began coverage of the company, starting with a peer perform rating.
Amphenol Corp. (NYSE:APH - News) reported fourth-quarter earnings of $78.4 million, or 85 cents a share, up from a year-ago profit of $55.8 million, or 61 cents a share. The latest results reflect a benefit of 2 cents a share related to a reduction in the company's effective tax rate as well as stock option expense of 2 cents a share. Sales rose in the three months ended Dec. 31 to $659.4 million from $508.1 million in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of 81 cents a share in the December period on revenue of $649.3 million. Looking ahead, the Wallingford, Conn., maker of electrical and optical connector products forecast earnings of 80 to 82 cents a share for the first quarter on revenue of between $635 million and $645 million. It sees a profit of $3.45 to $3.55 a share for the full year on revenue of between $2.65 billion and $2.71 billion. The company also said it's planning a two-for-one stock split, payable on March 30 to shareholders of record on March 16.
ASML Holdings (NasdaqGS:ASML - News) was upgraded to buy from sell at ABN-Amro following a strong fourth-quarter financial report. The company was also upgraded to hold from reduce at Fortis Bank. The microchip equipment maker posted a profit of 205.5 million euros for the quarter, up from 51.6 million euros a year earlier.
Bill Barrett Corp. (NYSE:BBG - News) was initiated with a buy rating at A.G. Edwards. The firm set a price target of $35.
Bridgford Foods (NasdaqGM:BRID - News) shares jumped after the Anaheim, Calif.-based company reported fourth-quarter net earnings of $1.08 million, or 11 cents a share. In the comparable period last year, the company posted a net loss of $340,000, or 3 cents a share. Revenue in the 17 weeks ended Nov. 3 rose to $43.2 million from $41.9 million. The comparable period last year had 16 weeks, the company said.
CVS Corp. (NYSE:CVS - News) and Caremark Rx Inc. (NYSE:CMX - News) said qualified Caremark Rx Inc. shareholders will receive a one-time cash dividend of $2 per share after the proposed merger between the companies closes. The companies will also retire 150 million shares of the new company after the deal closes.
Flow International (NasdaqGM:FLOW - News) closed its previously disclosed audit committee probe of allegations that certain members of Flow Asia intentionally and inappropriately recognized certain revenues in fiscal 2007 that should have been recorded in fiscal 2006. As a result, the company said it expects its restated fiscal 2006 results to show an increase to revenue of about $2 million, with a net after tax increase to net income of about $2 million.
HealthSpring (NYSE:HS - News) said it expects earnings of $1.55 to $1.65 a share for fiscal 2007 on revenue of between $1.5 billion and $1.6 billion. The current average estimate of analysts polled by Thomson First Call is for a profit of 34 cents a share in the December period. The Nashville, Tenn., managed care company anticipates its Medicare Advantage membership to be in the range of 130,000 to 135,000 by the end of 2007, up from 115,000 at the close of 2006.
Investors Financial Services (NasdaqGS:IFIN - News) was upgraded to market perform from underperform at Ryan Beck & Co.
Lennar Corp. (NYSE:LEN - News), the Miami homebuilder, swung to a fourth-quarter loss from a year-earlier profit on 15% lower revenue. For the quarter ended Nov. 30, Lennar posted a loss of $195.6 million, or $1.24 a share, compared with net income of $581.2 million, or $3.54, in the year-earlier period. Revenue fell to $4.27 billion from $5.03 billion. A survey of analysts by Thomson First Call produced consensus estimates of a loss of $1.11 on revenue of $4.17 billion.
National Financial Partners Corp. (NYSE:NFP - News) said it expects its fourth-quarter per-share earnings "will be broadly consistent" with the consensus analyst estimate. "This view is consistent with the growth of NFP's firms, acquisition activity, and the challenging life insurance underwriting environment," the company said in a statement.
Neurocrine Biosciences Inc. (NasdaqGS:NBIX - News) was upgraded to overweight from equal weight at Lehman Bros. The firm also boosted its price target on the stock to $18 from $8.
Parker-Hannifin Corp. (NYSE:PH - News) reported fiscal second-quarter earnings of $193 million, or $1.64 a share, up from a year-ago profit of $129 million, or $1.07 a share. The latest results reflect a benefit of 9 cents a share from renewal of a federal tax credit for increasing research activities. Sales rose in the three months ended Dec. 31 to $2.51 billion from $2.16 billion in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of $1.40 a share on sales of $2.45 billion in the December period. The Cleveland-based maker of motion and control technology products attributed its profit increase in the second quarter to the strong performance of its Industrial International and Aerospace business segments. Looking ahead, Parker-Hannifin lifted its outlook for the full year to earnings from continuing operations of $6.35 to $6.75 per share from its prior projection of $6.05 to $6.45 a share. Wall Street's current consensus estimate for the year is for a profit of $6.38 a share.
Progressive Corp. (NYSE:PGR - News) reported net income of $138.9 million, or 18 cents a share, for the month of December, up from a year-ago equivalent profit of $122.9 million, or 15 cents a share. For the quarter ended Dec. 31, the Mayfield Village, Ohio-based insurance provider said it earned $400.9 million, or 53 cents a share, up from last year's earnings of $281.6 million, or 35 cents a share. The average estimate of analysts polled by Thomson First Call was for a profit of 50 cents a share in the December quarter.
SPX Corp. (NYSE:SPW - News) said it expects earnings from continuing operations of $3.80 to $3.95 a share for fiscal 2007 on revenue of about $4.7 billion. The Charlotte, N.C., maker of flow technology, test and measurement products said it expects the primary drivers for its profit growth in 2007, estimated at between 26% and 31% from 2006's target, to be continued strength across all of its business segments and a reduced tax rate. The current average estimate of analysts polled by Thomson First Call is for a profit of $3.59 a share in fiscal 2007 on revenue of $4.59 billion. SPX sees free cash flow from continuing operations of between $240 million and $280 million for fiscal 2007.
Shares of Star Scientific (NasdaqGM:STSI - News) soared after the company said decisions on three pending summary-judgment motions in its patent-infringement lawsuit against R.J. Reynolds Tobacco Co., a unit of Reynolds American (NYSE:RAI - News), will be available on the court's Web site on Friday. The Chester, Va., developer of technologies designed to reduce tobacco toxins said in a filing with the Securities and Exchange Commission that Judge Marvin J. Garbis of the U.S. District Court for the District of Maryland provided notice of his rulings on the motions last week. Star Scientific filed a patent-infringement suit in 2001 alleging that Reynolds had violated the company's process to reduce the level of nitrosamines - a carcinogenic toxin - in tobacco.
State Street Corp. (NYSE:STT - News) said fourth-quarter net income for the three months ended Dec. 31 rose 17% to $291 million, or 86 cents a share, from $249 million, or 74 cents a share in the year-ago period. The Boston-based lender said revenue increased 15% to $1.62 billion. Analysts surveyed by Thomson First Call forecast earnings of 84 cents a share and revenue of $1.56 billion, on average. Expenses rose 13% to $1.18 billion from $1.04 billion. Return on shareholders' equity was flat at 15.9%. For 2007, State Street said it plans to target the upper end of its long-term financial goals of revenue growth of 8% to 12%, earnings per share growth of 10% to 15%, and return on equity of 14% to 17%.
Sterling Construction Co. (NasdaqGS:STRL - News) was upgraded to buy from hold at Morgan Joseph & Co.
Stewart Enterprises (NasdaqGS:STEI - News) reported fourth-quarter earnings from continuing operations of $10.7 million, or 10 cents a share, up from a year-ago loss of $2 million, or 2 cents a share. Excluding items, the New Orleans funeral and cemetery services provider posted a profit from continuing operations of $9.2 million, or 9 cents a share in the latest quarter. Revenue rose in the three-month period to $131.2 million from $114.1 million last year. The average estimate of analysts polled by Thomson First Call was for a profit of 6 cents a share in the October period.
TSYS (NYSE:TSS - News) said fourth-quarter net earnings rose to $87.1 million, or 44 cents a share, from $49.7 million, or 25 cents a share, in the same period last year, on the back of higher revenue. The company now sees 2007 net income growth falling between 3% and 5% vs. 2006, down from its prior outlook of a 9% to 7%.
Xoma Ltd. (NasdaqGM:XOMA - News) and Schering-Plough (NYSE:SGP - News) expanded their collaboration agreement, with Schering-Plough exercising its right to initiate additional development programs. Xoma said it would receive upfront payments for each additional program, as well as research funding and royalties on any sales of the products.
Published By Michael Baron

Labels: ALGT, APH, ASML, BBG, BRID, CMX, CVS, FLOW, IFIN, LEN, NBIX, NFP, PGR, PH, RAI, SGP, SPW, STSI, XOMA