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:
Lubrizol ( LZ ) 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.
Hasbro ( HAS ) 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 ( LLY ) made an "irrevocable, unconditional" offer to acquire the animal health business of Johnson & Johnson ( JNJ ). 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.
Apple ( AAPL ) 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 price.
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 retailer.
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.
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