Stocks Higher as M&A News, Manufacturing Buoy Stocks Ahead of Elections, Fed Meeting
Stocks are higher in mid-day trading as investors shrug off new data that showed a decline in September consumer income in the face of upbeat manufacturing activity. Also, a spate of merger and acquisition news served to feed trading activity through the morning as investors eye tomorrow's mid-term elections and Wednesday's Federal Reserve meeting.
In new economic data released this morning, September income fell 0.1% compared with expectations for a 0.2% gain. Inflation-adjusted spending was up 0.1%. Key core PCE inflation was flat that month. Countering that, the October ISM manufacturing index rose to 56.9 from 54.4 in September. Economists had expected a decline to 54.6.
In M&A news, McKesson Corp. ( MCK ) shares are higher following news that it will buy privately held US Oncology for about $2.16 billion to bolster its services in cancer care. The cash deal give McKesson a unit that provides clinical tools, guidelines and supplies to doctors as the physicians seek to improve their practices under the health- care overhaul, Bloomberg reports.
Also, M&T Bank Corp. ( MTB ) is higher following an announcement that it is buying Wilmington Trust Corp. ( WL ) for $351 million in stock. The news sent Wilmington Trust down more than 40%. M&T said Wilmington Trust shareholders will receive 0.051372 shares of its stock for each share of Wilmington Trust stock. Wilmington Trust posted a $369.9 million Q3 loss because of bad real estate construction loans and has been struggling. Wilmington Trust Chairman and Chief Executive Donald Foley says the board thought the deal with M&T was the best available option for stockholders.
Meanwhile, Fortinet Inc. ( FTNT ) is higher amid speculation that the network security provider has been approach by International Business Machines Corp ( IBM ) about a possible buyout. According to Bloomberg, IBM approached Fortinet about two months ago and the company is already working with Morgan Stanley to weigh its financial options.
Finally, MetLife ( MET ) said it has completed its acquisition of American Life Insurance Company from American International Group, according to a statement from the firm. "We are well positioned to deliver earnings and return on equity accretion as a result of this acquisition," said Robert Henrikson, chief executive officer of MetLife. Consideration paid by MetLife to AIG for the acquisition of Alico consisted of $7.2 billion in cash consideration after adjustments and $9.0 billion in MetLife equity and other securities.
Elsewhere, Apple ( AAPL ) shares are higher after the company filed suit against Motorola ( MOT ) claiming that its Droid smartphone patent infringes on three patents for Apple's iPhone, Reuters reported. Apple says that Motorola is using its touchscreen software along with other display technologies, the report says. The suit comes after Motorola already sued Apple last month, asking a judge to rule that Motorola is not infringing on certain Apple software patens, the report said.
Coca-Cola ( KO ) will likely increase spending in China as it looks to invest $2 billion faster than originally anticipated, said Chief Executive Muhtar Kent. "We're ahead of our projections in investments," Kent said, according to a Bloomberg report.
GlaxoSmithKline plc ( GSK ) is on the rise after it voluntarily recalled a skin lotion due to mold contamination. Emo-Cort is used to treat eczema and other skin conditions. The British drug maker recalled its "lot 5R6" sold in Canada, according to the country's health agency.
Exxon Mobil ( XOM ), Royal Dutch Shell (RDSA) and Occidental Petroleum ( OXY ) have been shortlisted as potential partners to develop the $10 billion Shah natural gas project in the United Arab Emirates, Bloomberg reported.
Ivanhoe Energy ( IVAN ) says it had better-than-expected reservoir characteristics at Sunwing Zitong-1 gas well in Southwest China based on an analysis of logs from the Xu5 and Xu4 shallower target formations.
The results of this evaluation significantly increase the upside natural gas potential in the 70-square-kilometre Guan structure to approximately 0.8 to 1.0 trillion cubic feet, double its previous view of 0.3 to 0.6 trillion cubic feet.
In the latest earnings news:
--Shares of Idenix Pharmaceuticals Inc ( IDIX ) are down after the drug maker reported that its third-quarter loss increased from a year ago. Net loss reached $12.9 million, or 18 cents a share, up from $11.7 million, or 18 cents a share the previous year. Still, the loss was less than expected; analysts polled by Thomson Reuters on average had expected a net loss of 22 cents share.
--Anadigics ( ANAD ) says it earned $.06 per share in Q3, above the Thomson Reuters mean for $0.04. Sales of $61.3 million beat estimates for $57.6 million. In Q4, it sees EPS of $0.06, meeting forecasts. It sees sales of $57 million, below expectations for $61.6 million.
--Corning Inc. ( GLW ) is higher despite missing the Street on Q3 earnings and guiding for weaker retail demand for its important flat-screen television glass.
Commodities are mixed with December gold contracts down $6, or 0.42%, to $1,352 an ounce while December crude contacts are up 2.33%, or $1.91, at $83.34 a barrel.