U.S. equities are poised to follow their overseas counterparts
into the red this morning, with radiation woes, rate hikes, and
sovereign debt concerns overshadowing optimism about Texas
Instruments' (TXN - 34.11) purchase of National Semiconductor (NSM
- 14.07). In Asia, stocks fell on news of radioactive dumping in
the Pacific Ocean, while European markets are retreating in the
wake of a debt downgrade for Portugal. Meanwhile, central banks
have also taken the spotlight today, with both China and Australia
making decisions on their key lending rates, and the Federal Open
Market Committee's (FOMC) latest meeting minutes slated for release
later this afternoon. Against this backdrop, the Dow Jones
Industrial Average (DJIA ) has surrendered about 27 points, at last
check, while the S&P 500 Index (SPX ) is flirting with a loss
of about 3.4 points.
In equities news, Texas Instruments (
) last night said it will buy National Semiconductor (
) for about $6.5 billion in cash, or $25 a share, representing a
premium of nearly 80% to NSM's closing price of $14.07 on Monday.
The deal -- which has already received a unanimous thumbs-up by
both boards -- is expected to close within the next six to nine
months, the companies said. At last check, the shares of TXN are
down 2.5%, while the shares of NSM have skyrocketed more than 70%
ahead of the bell.
Meanwhile, exchange operator Nasdaq OMX Group (NDAQ - 27.44)
said it will rebalance its benchmark Nasdaq 100 Index on May 2. As
a result, tech titan Apple Inc. (AAPL - 341.19) will remain the
largest component of the index, but its projected weight will be
reduced to 12.33%, compared to its current weight of 20.49%.
"Nasdaq decided to enact a special rebalance in order to bring the
weights of the index securities closer in line with their actual
market capitalizations," the exchange said. The news has evidently
overshadowed Consumer Reports naming Apple's iPad 2 its top tablet
pick, with the shares of AAPL down 1.6% ahead of the bell.
On the earnings front, Schnitzer Steel (SCHN - 66.01) reported a
fiscal second-quarter profit of $30.8 million, or $1.10 per share
-- up 77% from its year-ago results. Revenue for the quarter rose
28% to $721.8 million, while gross margin expanded to 12.3% from
12.2%. Analysts, on average, were looking for a profit of just 85
cents per share, but consensus estimates called for healthier
revenue of $747 million. In pre-market action, the shares of SCHN
have added about 1.5%.
Today we'll hear earnings reports from International Speedway (
), KB Home (
), Layne Christensen (
), AngioDynamics (ANGO), and Mitcham Industries (MIND). Keep your
for more news as it breaks.
The economic calendar heats up today with the Institute for
Supply Management's (ISM) non-manufacturing index for March, as
well as the Federal Open Market Committee's (FOMC) most recent
meeting minutes. On Wednesday, we'll see the weekly crude
inventories report, plus the Mortgage Bankers Association's (MBA)
mortgage applications index. Thursday will bring us the weekly
jobless data and February's consumer credit report, while the
economic agenda winds down on Friday with the release of the
government's wholesale inventories report.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,041,914 call contracts traded on Monday, compared to
626,230 put contracts. The resultant single-session put/call ratio
jumped to 0.60, while the 21-day moving average was flat at
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Japanese stocks blazed a path lower today, with automakers
pacing the retreat. Leading the laggards was Toyota Motor (TM),
after the Associated Press reported that the company will
temporarily shutter its North American plants due to a supply
shortage. Meanwhile, Tokyo Electric Power began dumping toxic water
into the Pacific Ocean -- a move Japan's Chief Cabinet Secretary
Yukio Edano said was "unavoidable." By the close, the Nikkei gave
up 1.06%. Meanwhile, despite the market being closed for holiday,
China's central bank unexpectedly hiked its key lending rate.
European markets were also lower, after Moody's cut Portugal's
sovereign debt rating by one notch. The ratings firm said the
country's new government needs to seek urgent financing from the
European Union, and said further downgrades are dependent upon
Lisbon's ability to secure funding for the intermediate term. At
last check, France's CAC 40 was down 0.5%, London's FTSE 100 has
given up 0.3%, and Germany's DAX has surrendered almost 0.4%.
Currencies and Commodities
The U.S. dollar is trending higher this morning, as the U.S.
Dollar Index was seen hovering around 76.05. Elsewhere, crude
futures have backpedaled from 30-month highs; in electronic
trading, the May crude futures contract has given back almost 0.6%
to linger back beneath $108 per barrel. Finally, gold futures are
also fractionally lower, surrendering 0.03% to flirt with $1,432.60
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