U.S. Stocks Gain on Active Deal Calendar

Arthi Gupta
04 Jan, 2011
New York City

U.S. indexes advanced tracking gains in world markets. Dover agreed to acquire Harbison-Fischer for $402.5 million. Constellation Energy completed acquisition of Boston Generating gas fleet for $1.1 billion. Stryker purchased Neurovascular business of Boston Scientific in $1.5 billion deal.

[R]9:00 AM New York – U.S. indexes advanced tracking gains in world markets. Dover agreed to acquire Harbison-Fischer for $402.5 million. Constellation Energy completed acquisition of Boston Generating gas fleet for $1.1 billion. Stryker purchased Neurovascular business of Boston Scientific in $1.5 billion deal.[/R]

World markets gained on optimism of global economic recovery. Markets in Asia closed higher and in Europe traded up as commodities retained momentum. Active deal making across the globe lifted trading sentiment as well.

U.S. Manufacturing Activity Expands, Construction Spending Rises

Activity in the U.S. manufacturing sector expanded for the seventeenth consecutive month in December, according to a report released by the Institute for Supply Management on Monday.

The ISM index of activity in the manufacturing sector rose to 57.0 in December from 56.6 in November.

The U.S. Commerce Department reported that total construction spending increased 0.4% in November following a 0.7% increase in October.

Bank of America Settles Freddie, Fannie Claims

Bank of America Corp. reached agreements with Freddie Mac and Fannie Mae to resolve repurchase claims involving certain residential mortgage loans sold to them by entities related to Countrywide Financial Corporation. The bank will pay a total of $2.64 billion to Freddie and Fannie.

Bank of America said it will record a goodwill impairment charge of about $2 billion in the fourth quarter on the settlement reached with Freddie Mac and Fannie Mae related to its home loans and insurance business.

Borders Group Falls on Resignations

Borders Group, Inc., the bookstore chain announced the resignation of two senior executives in a regulatory filing on Monday. Executive Vice President, General Counsel and Secretary Thomas Carney resigned on Sunday, while Senior Vice President and Chief Information Officer Scott Laverty resigned earlier in the day.

Borders dropped more than 8% in after-hours trading.

PG&E Receives Safety Recommendations from NTSB

Pacific Gas and Electric Co., owner of the natural gas pipeline that exploded in San Bruno, California in September 2010, said that the National Transportation Safety Board issued seven gas pipeline safety recommendations to the company and other natural gas utilities as part of the agency''s probe into the explosion.

Dover Acquires Harbison-Fischer

Dover Corporation, the industrial products and components maker acquired Harbison-Fischer, Inc., a designer and manufacturer of down-hole rod pumps and related products, for $402.5 million, subject to normal closing adjustments.

With the new buy-out expected to generate revenue of $160 million in fiscal year 2011, Dover anticipates the acquisition to be accretive to its earnings for the year.

Motorola Splits into Two Companies

Motorola Inc., the technology firm is set to split into two companies - Motorola Mobility Inc. and Motorola Solutions Inc. - as part of a previously announced plan.

Motorola''s handset and cable set-top box businesses will come under Motorola Mobility, while Motorola Solutions will sell services to enterprises and governments.

Constellation Energy Acquires Boston Generating Gas Fleet

Constellation Energy completed the acquisition of a 2,950-megawatt power generation asset of Boston Generating LLC in New England for $1.1 billion.

As per the terms, Constellation Energy acquired BostonGen''s five power plants located in the Boston area, and the asset is the third largest power generating portfolio in the New England region.

Constellation Energy Chief Executive Officer Mayo Shattuck said the acquisition expands the company''s generation portfolio and increases the capacity to sell electricity to retail and wholesale customers in New England and nationwide.

Stryker Completes Acquisition of Neurovascular Business of Boston Scientific

Stryker Corporation, the medical technology company said it closed the $1.5 billion acquisition of Boston Scientific Corp.''s Neurovascular business, which is expected to broaden its base and boost sales of minimally invasive treatment products.

ON Semiconductor Purchases Sanyo Semiconductor

ON Semiconductor Corp. completed the acquisition of Sanyo Semiconductor Co. Ltd. and other assets related to Sanyo Electric Co.''s semiconductor business.

Under the terms of the deal, ON Semiconductor paid about 11.8 billion yen or $144 million in cash to Sanyo Electric, and drew down about 31.7 billion yen or $378 million under a loan agreement with that company.

CommScope Offers Senior Notes

CommScope, Inc. said that, in connection with its proposed merger with an affiliate of The Carlyle Group, it intends to offer in a private placement $1.5 billion in aggregate principal amount of senior notes due 2018.

The net proceeds from the senior notes offering are intended to be used to finance in part the cash consideration to be paid in the proposed merger, and to pay for certain fees, expenses and other purposes related to the proposed merger, said CommScope in a statement.

Earnings Review

Calavo Growers, Inc. ((CVGW)), the avocado and commodity produce marketer reported fourth quarter revenues surged 32% to $107.2 million, from $80.9 million a year ago. Net income for the quarter soared 106% to $4.8 million, or 32 cents per diluted share, compared to net income of $2.3 million, or 16 cents per share last year.

Home BancShares, Inc. ((HOMB)), the bank holding company said it would record a decrease of $1.27 to $1.38 per share on loan impairment for the fourth quarter and a decrease of $0.08 per share as a result of an apparent fraud.

The Clorox Company ((CLX)), the consumer products maker estimated after-tax, non-cash goodwill impairment charge in the second quarter of $250 million to $255 million, or about $1.78 to $1.82 per share.