Image source: Navistar International.
The stock market inched closer to new all-time record highs on
Tuesday, but major market benchmarks pulled back from their best
levels of the day and finished mixed. Many investors pointed to
the latest sign of a rebound in the energy markets as crude
climbed back above the $50 per barrel level and spurred strength
in stocks tied to oil and natural gas. Yet weakness in
biotechnology held back the Nasdaq, pulling that market down
despite modest gains for the S&P 500 and the Dow.
Some stocks managed to climb quite strongly, and
(NYSE: NAV) ,
(NASDAQ: LDRH) , and
(NASDAQ: Z) were among the best performers on the day.
Navistar soared almost 20% after the truck manufacturer posted
its first quarterly profit in almost four years. The tough
conditions that have plagued the industry haven't let up much,
and Navistar's revenue fell 18% because of falling engine volumes
in the Brazilian market and overall global weakness.
Surprisingly, investors overlooked Navistar's decision to reduce
its guidance for the full year, setting new expectations for
sales of $8.2 billion to $8.6 billion, and for EBITDA of $550
million to $600 million. Still, earning a profit makes it easier
for Navistar to figure out how to handle its debt, and
cost-cutting measures have already paid off with nine-figure
savings that could help make debt restructuring easier as
outstanding bonds and other securities come due.
LDR Holding jumped 64% as the red-hot mergers and acquisitions
market snared another company. The specialist in medical devices
aimed at spine disorder treatment received a buyout bid from
, with LDR shareholders to receive $37 per share in cash and
putting a roughly $1 billion price tag on the company as a whole.
Zimmer Biomet sees the purchase as helping it accelerate the
growth of its spine-based business segment. LDR CEO Christophe
Lavigne said, "We are delighted with this combination, which will
further our commitment to improving spine care by providing
greater access to our innovative product offerings for patients
around the world." The fact that the stock closed almost exactly
at $37 suggests that LDR shareholders might be hoping for a rival
bid, but Zimmer believes the deal should close during the third
quarter of 2016, pending necessary approvals.
Finally, Zillow Group rose 6%. Investors reacted favorably to
news that the real-estate information provider is settling a
lawsuit from competitor
, which operates rival site Realtor.com. The settlement involves
Zillow paying $130 million to end a dispute that could have led
to damages awards of up to $1.8 billion. The allegations Move had
made included the idea that Zillow obtained trade secrets by
hiring former Move executives, and those trade secrets played a
role in helping Zillow buy out industry peer Trulia two years
ago. The settlement doesn't require Zillow to admit wrongdoing,
and it will help Zillow focus on its future rather than having to
deal with the threat of a large damages award.
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