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Mid-Day Update: Concerns Over Europe Weigh on Stocks; Deal News Provides Some Support

By: MT Newswires
Posted: 1/10/2011 12:30:00 PM
Referenced Stocks: AA;DUK;GENZ;JNJ;PGN

Here's where markets stand at mid-day:

-NYSE down 28.73 (-0.36%) to 7,951.72

-DJIA down 37.12 (-0.32%) to 11,637.64

-S&P 500 down 2.92 (-0.23%) to 1,268.58

-Nasdaq down 3.44 (-0.14%) to 2,699.48


Hang Seng down 0.67%

Nikkei up 0.11%

FTSE down 0.47%


NYSE Energy down 0.53% at 12,449.62

NYSE Financial down 0.6% at 4,964.25

NYSE Health Care down 0.38% at 6,538.06

NYSE Arca Tech 100 up 0.01% at 1,110.72


(+) GENZ (+1.6%) gains as execs in buyout talks with Sanofi-Aventis.

(+) SKH (+4.5%) upgraded.

(+) CPST (+1.7%) inks new order.

(+) AMD (+1.9%) upgraded.

(+) SNN (+8.8%) gets reported offer from J&J ( JNJ ).

(+) EBAY (+0.1%) upgraded.

(+) HILL (+20.1%) expects to beat with Q4.

(+) AA (+0.6%) gains ahead of earnings.

(+) PLA (+17.1%) going private.

(+) UNP (+2.4%) gets favorable Barron's coverage.

(+) VZ (+0.01%) continues to gain on potential iPhone deal.

(+) BCS (+0.3%) upgraded.

(+) LDK (+16.5%) hikes outlook.

(+) SLE (+3.3%) reportedly gets consortium bid.


(-) GERN (-0.4%) reports on positive pre-clinincal data.

(-) INHX (-10%) reports study data.

(-) T (-1.4%) downgraded.

(-) TOT (-1.3%) downgraded.

(-) NDN (-0.2%) downgraded.

(-) WMT (-0.6%) downgraded.

(-) PDLI (-11.7%) falls after court ruling.

(-) STRA (-22.9%) says winter enrollments down. APOL, COCO shares also down.

(-) DD (-2.2%) buying Danish firm.

(-) DUK (-2.1%) in deal with Progressive. PGN down 2.2%.


Stocks are lower in mid-day trading as renewed concerns over the debt situation in Europe quelled bulls ahead of earnings season, which gets underway after the market closes this afternoon with earnings from aluminum producer Alcoa ( AA ). With no economic data out today, investors eyed deal news as well.

In Europe, sovereign-debt concerns are brewing again following weekend reports that Portugal is being pressured to ask for a bailout. Last year, Greece and Ireland requested financial aid from international lenders.

In deal news, Duke Energy ( DUK ) and Progress Energy ( PGN ) are down after the companies said they will merge. The combined company, to be called Duke Energy, will be the country's largest utility, with approximately $65 billion in enterprise value and $37 billion in market capitalization.

Meanwhile, Genzyme ( GENZ ) shares are higher after Sanofi-Aventis (SNY) said takeover talks with the Genzyme now involving executives from both companies. Both sides are reportedly discussing extra payments tied to Lemtrada, an experimental multiple sclerosis drug. There is not guarantee that a deal will be reached, Genzyme reportedly said. Sanofi has already made a hostile bid for the company of $69 a share, which totals $18.5 billion.

Also, Conexant (CNXT) shares have backed off session highs but are still in positive territory after Standard Microsystems (SMSC) said it will buy the chipmaker in a cash and stock deal valued at $284 million, including the assumption of Conexant's debt. Under the terms of the deal, Conexant shareholders will receive the equivalent of $2.25 a share, with half the payment in cash and half in Standard Microsystems stock.

Elsewhere in corporate headlines:

Shares of American International Group (AIG) are down after The Wall Street Journal reported over the weekend that the U.S. government is reviewing bankers this week to manage a public offering of a piece of its majority stake in the insurance giant. Citing people familiar with the matter, the report said the government sent out a request for proposals to banks and securities firms last Thursday.

Shares of MGM Resorts (MGM) are down after the company said CityCenter Holdings, LLC, a joint venture which is 50% owned by a wholly-owned subsidiary of the company and 50% owned by Infinity World Development, proposes to offer $1.1 billion in aggregate principal amount of first and second lien notes in a private placement.

Meanwhile, shares of Eli Lilly (LLY) are down after new data for the company's experiment pancreas drug liprotamase raised doubts about its efficacy, Reuters reports. The drug is not derived from pigs as similar medicines are, reviewers from the U.S. Food & Drug Administration said. Medicines such as liprotamase, which is designed to work for patients who have trouble digesting food because of pancreatic insufficiency, make $1 billion a year, analysts have estimated.

Shares of Apple (AAPL) and Verizon (VZ) are higher in morning trade, with the two expected to announce that Verizon will carry Apple's iPhone on its network. The arrangement has pressured shares of At&T (T), which has been the sole carrier for the iPhone. The move is seen as beneficial to Apple, which is locked in a smartphone battle with Google (GOOG) and its Android mobile operating system.

Epoch Investment Partners Inc (EPHC) shares are down even as the firm said it is increasing its quarterly dividend 20% from $0.05 to $0.06 a share. The dividend is payable Feb. 11 to shareholders of record as of Jan. 28. The firm last week reported a 12% increase in assets under management to $14.3 billion at the end of the December quarter compared to the $12.8 billion managed on Sept. 30.

Ford Motor Co. (F) shares are higher after the automaker said in a statement it will add 7,000 U.S. workers over the next two years. As part of this job growth, Ford will begin recruiting engineers specializing in electrification at the 2011 North American International Auto Show on Wednesday and Thursday.

Commodities are higher. February gold contracts are up $3, or 0.22%, to $1,372 an ounce while February crude oil contacts are up 1.57%, or $1.36, at $89.39 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 1.22% to $38.13 and the United States Natural Gas fund (UNG) is down 1.82% to $5.92.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.22% to $133.87. Market Vectors Gold Miners (GDX) is down 0.07% to $56.71. iShares Silver Trust (SLV) is up 1.07% to $28.40.