Stocks are down sharply in mid-session trading, with the Dow
trading below 12,000, as investor attention remains fixed on Japan,
which is reeling from the effects of the massive earthquake last
week. Deal news, including a big acquisition for Warren Buffett's
Berkshire Hathaway (BRK.B), added to the mix.
The worst earthquake in some 150 years hit Japan Friday,
triggering a 10-meter high tsunami and setting off a domino-like
series of tsunami alerts in nearly 20 countries across four
continents, including Hawaii and the U.S. West Coast. The 8.9
magnitude earthquake hit transportation networks across Japan.
There is no economic news scheduled for release today.
In company news:
) soared to a 52-week high of $134.13, after it said Berkshire
Hathaway will acquire the company for $135 per share in an all-cash
transaction. The deal is valued at approximately $9.7 billion,
including approximately $0.7 billion in net debt. The companies
expect the transaction to be completed during Q3.
) announced Monday that it has entered into a strategic development
agreement with Jagex Limited, the UK-based developer of the popular
free-to-play MMOG Runescape, to jointly create a new online game
based on the globally iconic TRANSFORMERS brand. Under the
agreement, the two companies are slated to launch the Transformers
online game in 2012 in North America, Latin America, Europe, New
Zealand and Australia.
Eli Lilly (
) made an "irrevocable, unconditional" offer to acquire the animal
health business of Johnson & Johnson (
). According to a statement, upon deal closing, Elanco--the animal
health division of Eli Lilly-- would obtain a portfolio of about 50
marketed animal health products. As part of the proposed agreement,
Janssen animal health employees solely dedicated to the animal
health business will transfer to Elanco. No manufacturing
facilities would be included in the transaction.
) is higher as investors react to strong early sales of the new
iPad 2 tablet computer, which went on sale Friday. The newest
version of the iPad sold out at Apple's major U.S. stores "within
hours," according to The Wall Street Journal. Analysts estimate
that Apple sold as many as 500,000 tablets over the weekend.
Analysts also said the sales trend bodes well for Apple's sale
Bank of America (BAC) shares are down as The New York Times
reports that a hacker organization released a series of e-mails
from a former employee at the bank that showed how a division of
the bank tried to hide information on foreclosures. BofA shares are
down 0.6% in pre-market trading.
Wal-Mart Stores (WMT) shares are down as Bloomberg reports that
the retailer will reportedly ask Mark Lamberti to remain as
chairman of Massmart Holdings if South Africa's antitrust
regulators approve its purchase of a controlling stake in that
Xilinx (XLNX) says its Board increased the quarterly cash
dividend from $0.16 to $0.19 per outstanding share of common stock,
payable on June 8 to stockholders of record at the close of
business on May 18. It also reiterated it expects March quarter
sales to be flat to up 5% sequentially, assuming no effects from
Japan. It is still evaluating the situation in Japan, it says.
Cigna Corp. (CI) is down despite upbeat comments from a Wedbush
analyst who sees international business bolstering earnings growth
by 2015. Analyst Sarah James said the insurer's global business is
generating higher margins and growing faster than its domestic
business. James lifted her target to $47 from $45. Cigna sees
earnings growth of 10% to 13% over the next three to five years,
ahead of competitors; WellPoint Inc. and Aetna Inc., which are
guiding for 10% growth, according to the AP.
Chevron (CVX) shares are down as Reuters reports that the oil
major is targeting a 1% output increase this year as it looks to
invest in two large Australian natural gas projects in a move to
restart growth. Chevron is targeting average production of
oil-equivalent products of 2.79 million bpd this year. That would
equal 1 percent growth.
Commodities are mixed. April gold contracts are up $4, or 0.27%,
to $1,426 an ounce while April crude oil contacts are down 1.1%, or
$1.11, at $100.05 a barrel.
In energy ETFs, the United States Oil Fund (USO) is down 0.25%
to $40.59 and the United States Natural Gas fund (UNG) is up $0.36,
or 3.46%, to $10.76.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.69% to
$139.24. Market Vectors Gold Miners (GDX) is down 0.29% to $57.65.
iShares Silver Trust (SLV) is up 0.66% to $35.26.