Closing Update: Morning Rally For U.S. Yields Again to Valuation Concerns; Dow Jumps Nearly 100 Points Before Retreating

Stocks finished slightly lower Tuesday, giving back larger gains supported by a fresh spate of mergers and acquisition activity only to again yield to broader worries over equity valuations. Health care and energy stocks enjoyed the biggest gains, while shares of financial and consumer companies surrendered their morning advances as traders gradually moved away from the market after the Dow Jones Industrial Average stopped just short of a 100-point rise. Crude oil extended its recent rally, settling today near $54 a barrel.

A pair of multi-billion-dollar deals had most stocks rising after the opening bell. In one transaction, Informatica Corp ( INFA ) rose to a three-year high Tuesday after agreeing to a $5.3 billion leveraged buyout of the enterprise software company led by private equity firm Permira Funds and the Canada Pension Plan Investment Board.

Under terms of the transaction, the largest leveraged buyout so far this year in the United States, INFA shareholders will receive $48.75 for each of their shares in cash, a 6.4% premium over Monday's closing price for the stock.

Logistics and shipping company FedEx ( FDX ) shares also rose today after announcing a $4.8 billion bid for Netherlands-based TNT Express for $4.8 billion, seeking to accomplish what rival United Parcel Service ( UPS ) failed to do several years ago after running into anti-trust concerns.

Also today, New Residential Investment climbed almost 3% today after scraps an earlier buyout proposal for Home Loan Servicing Solutions ( HLSS ), instead structuring a $1.2 bln purchase of substantially all HLSS assets. It also launched a public offering of 40 mln shares of its stock, with HLSS selling 28.3 mln shares and NRZ selling the remaining 11.7 mln shares.

Among commodities, crude oil for May delivery settled $1.84 higher at $53.98 per barrel while May natural gas futures added 3 cents to finish at at $2.68 per 1 million BTU. June gold slipped $8.50 to $1,214.70 per ounce.

Here's where the U.S. markets stood at the end-of-day:

Dow Jones Industrial Average down 5.43 (-0.03%) to 17,875.42

S&P 500 down 4.29 (-0.21%) to 2,076.33

Nasdaq Composite Index down 7.08 (-0.14%) to 4,910.23


Hang Seng Index up 0.77%

Shanghai China Composite Index up 2.52%

FTSE 100 Index up 1.88%


(+) WBAI, Clarifies Monday statement by Chinese authorities cracking down on illegal online wagering, reminding investors the company is one of two firms licensed by the government to conduct lottery sales.

(+) HOFT, Q4 net income rises almost 90% over the same quarter last year to $4.3 million, or $0.40 per share, beating the Capital IQ consensus by $0.12 per share. Net sales climb 12.7% over year-ago levels to $64.9 million, also exceeding estimates by around $3.3 million.

(+) AXTA, Advances to a fresh all-time high after saying Berkshire Hathaway (BRK-A) strikes deal with majority owner Carlyle Group ( CG ) to acquire 20 million AXTA shares at $28 apiece, a 1.1% discount to Monday's closing price for the stock.


(-) OCUL, OTX-DP experimental hydrogel plug fails to reduce inflammation in patients following cataract surgery but met other primary goal of reducing pain during Phase III testing. It plans to meet with the FDA to determine its next steps.

(-) OVAS, Shares fall for a second day after an independent research firm Ovascience questioned the effectiveness of the company's Augment infertility treatment that was cited in study results released last week.

(-) GEL, Prices public offering of 4.0 mln units at $44.42 each, a 5.4% discount to Monday's closing price for the stock.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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