The major market indexes appear ready to take another shot at
today, after finishing last week on the wrong side of key levels.
Fueling the pre-market optimism has been a round of buyout
announcements from both Endo Pharmaceuticals Holding (
) and Level 3 Communications (
), which unveiled plans to acquire American Medical Systems (
) and Global Crossing Ltd. (
), respectively. In fact, the merger mania has helped to take the
spotlight off NYSE Euronext (
), which rejected a trumped-up buyout bid from Nasdaq OMX Group
(NDAQ) and IntercontinentalExchange (ICE). Furthermore, the Street
is on pins and needles ahead of Alcoa Inc.'s (AA) unofficial
earnings-season kick-off after the closing bell, which could set
the tone for the looming onslaught of quarterly confessions.
Against this optimistic backdrop, the Dow Jones Industrial Average
(DJIA ) is trading nearly 30 points above fair value, while the
S&P 500 Index (SPX ) is flirting with a 2-point lead.
In equities news, NYSE Euronext (NYX - 38.70) last night said
its board rejected the unsolicited, $11.3 billion buyout bid from
Nasdaq OMX Group (NYX - 38.70) and IntercontinentalExchange (ICE -
120.55), which the firm said was "highly conditional" on a breakup
of the exchange, and would "require shareholders to shoulder
unacceptable execution risk." Instead, NYX reiterated its
commitment to Deutsche Boerse, despite the German exchange
operator's lower bid. In response, ICE Chairman and CEO Jeffrey
Sprecher said that "by declining to meet with us, the NYSE Euronext
Board is ignoring its obligations to its stockholders," prompting
speculation that NDAQ and ICE could take their offer straight to
investors. At last check, the shares of NYX are down 0.7%, NDAQ is
trading about 2% lower, and ICE has surrendered 1.4%.
Meanwhile, Endo Pharmaceuticals Holding (ENDP - 40.85) said it
will acquire medical device manufacturer American Medical Systems
Holdings (AMMD - 22.33) for about $2.6 billion in cash, or $30 per
share, representing a notable premium to AMMD's closing price of
$22.33 on Friday. "Through the acquisition of AMS, we will gain
scale in devices and services, and will be positioned as a leading
provider of healthcare solutions in the field of pelvic health,
with a full spectrum of product offerings ranging from
pharmaceuticals to medical devices," President and CEO Dave Holveck
said, adding that he expects the deal to close late in the third
quarter. In pre-market action, the shares of ENDP have advanced
more than 7.5%, while AMMD has skyrocketed roughly 32.5%.
Elsewhere on the M&A front, Level 3 Communications (LVLT -
1.44) said it will buy Global Crossing Ltd. (GLBC - 14.80) for
about $3 billion, or roughly $23.04 per share, representing a hefty
premium to GLBC's settlement price of $14.80 on Friday. Level 3
said the merger -- which the firm expects to close before the end
of the year -- will better position the company to address
expansion in key global markets, and to be accretive to free cash
flow in 2013. At last check, LVLT has added 26.3%, while GLBC is up
more than 71%.
Alcoa (AA) will unofficially get the earnings ball rolling after
the closing bell today. Keep your browser at
for more news as it breaks.
There are no major economic reports slated for release today,
but Chicago Fed President Charles Evans is scheduled to speak at
the Annual Risk Conference. Tuesday brings us the February trade
balance, as well as import/export prices and the Treasury budget
for March, while Wednesday will feature the Fed's Beige Book report
for April, along with February's business inventories and the
regularly scheduled update on crude inventories. As usual, weekly
jobless claims are scheduled to hit the Street on Thursday.
Inflation data also starts to roll in, with the release of the
producer price index (PPI) and core PPI for March. The week wraps
up with a flurry of economic data, including industrial production,
capacity utilization, the consumer price index (CPI) and core CPI
for March, the preliminary April Reuters/University of Michigan
sentiment survey, and the Empire State manufacturing index for
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,219,691 call contracts traded on Friday, compared to
717,289 put contracts. The resultant single-session put/call ratio
docked at 0.59, while the 21-day moving average fell to 0.60.
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Asian markets ended lower today, with auto stocks pacing the
decliners in Japan after Citigroup slashed its rating on the sector
to "sell." Meanwhile, airline issues dragged Korean stocks lower,
as traders considered the ill effects of rising oil prices on the
group. By the close, Japan's Nikkei index gave back 0.5%, the
Shanghai Composite fell 0.2%, and Hong Kong's Hang Seng retreated
Over in Europe, stocks are bouncing around the breakeven line at
midday. Echoing the action in Asia, regional automakers slipped
after Credit Suisse downgraded the sector to "benchmark." However,
strength in commodity stocks, such as mining giant BHP Billiton
(BHP), helped to offset some of the weakness. At last check,
London's FTSE 100 is up about 0.1%, while France's CAC 40 has
surrendered 0.5%, and Germany's DAX is hovering just a hair's
breadth south of breakeven.
Currencies and Commodities
The greenback has gained some ground this morning, with the U.S.
dollar index up 0.1%. Elsewhere, crude futures have backpedaled
from multi-year high territory, thanks to speculation of a
cease-fire in Libya. In electronic trading, the May crude futures
contract has given up almost 0.7%, but remains above the
$112-per-barrel marker. Finally, gold futures are also retreating
from record highs. At last check, the front-month contract has
fallen 0.2% to trade at $1,470.70 an ounce.
Unusual Put and Call Activity:
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