Merger Sentiment Rules Stocks; Oil Drops

123jump.com Staff
18 Aug, 2010
New York City

U.S. stocks and indexes closed higher after merger deals and talks of hostile offer for Potash Corp lifted sentiment. European indexes declined despite the rise in construction output in July and employment rose in second quarter in Germany. Crude oil fell to one-month low and gold inches to record.

[R]4:00 PM New York – U.S. stocks and indexes closed higher after merger deals and talks of hostile offer for Potash Corp lifted sentiment. European indexes declined despite the rise in construction output in July and employment rose in second quarter in Germany. U.S. Treasury yields for 2-year notes hover near 2.63% and crude oil fell to one month low.[/R]

U.S. stocks traded higher after BHP Billiton makes a hostile offer of $40 billion for Potash Corp. Smaller deals also contributed to the positive sentiment.

Windstream agreed to buy Q-Comm for $782 million. The U.S. government enforces stricter guidelines for deepwater drilling. Nielsen IPO revised to raise $2 billion. Nidec agreed to buy Emerson Electric''s EMC business. Endocyte filed for $86.25 million IPO.

Chico’s quarterly net soared 104% on 10.8% increase in sales. Deere & Co. net sales increased 16% and income gained 47%. Jamba Inc second quarter net sales declined 11%. BJ’s Wholesale Club Inc quarterly sales increased 8.3% and net gained 2%. Rick’s Cabaret net revenues declined 5% in the quarter.

The European indexes fell after euro area construction output rose 2.7% in June. The Basel Committee noted capital and liquidity rules will have modest impact on economic growth. The OECD said GDP flat in the second quarter. German employment rose in the second quarter and retail sales fell in June.

The UK indexes declined after an unsuccessful bid for Potash Corp by BHP Billiton. The Bank of England minutes noted policy makers voted 8-1 to retain key interest rate. Elephant Capital acquired a 28.6% stake in ClinTec for £8 million. Semtek and RBS WorldPay entered into a multi-year deal for security services.

Stocks in Japan rise tracking gains in New York trading. Mitsubishi led consortium sign a contract to supply metro cars to Cairo. Fire at Osaka refinery forces shut down of two units. Unemployed in Japan averaged 3.49 million a month in the quarter to June, with 1.18 million without work for more than a year.

Stocks in China fell after real estate companies declined. China more than doubled its Korean debt holdings. Credit card delinquency drops despite the number of card holders on the rise in China. Li Ka-shing controlled company paid for two HK plots at the top end of market price.

Stocks in Mumbai rose sharply higher as international funds flows increase. Regulators are looking to increase investment limit for retail investors in a public offering. Gujarat Pipavav will launch its public offering on August 23 and Bajaj Corp IPO surges 18% on the first day.

Stocks in Australia closed nearly flat after private survey showed weakening economic conditions and housing affordability index declined to near low. Economic growth slows in June. Potash Corp rejects BHP’s unsolicited $39 billion offer.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.286 and fell against the Japanese yen to 85.44.

Crude oil decreased $0.50 to $75.27 a barrel for a front month contract, natural gas edged lower 4 cents to $4.27 per mBtu and gasoline increased 0.25 cent to 195.57 cents.

Gold increased $3.50 in New York trading to close at $1,231.80 per ounce, silver decreased $0.20 to $18.45 per ounce and copper for the front month delivery increased 0.60 cents to $3.364 per pound.

Yields on 10-year U.S. bonds increased to 2.64% and on 30-year U.S. bonds yields decreased 3.74%.