U.S. Markets Slide; Texas Instruments Offers $6.5 Billion for National Semi

Bikram Pandey
05 Apr, 2011
New York City

U.S. stocks edge lower after China hiked bank reserve rate and investors in Europe sold bank stocks. National Semiconductor agreed to be acquired by Texas Instruments for $6.5 billion. Service industry expansion slows in March. Procter & Gamble agreed to sell its Pringles unit for $2.35 billion.

[R]11:50 AM New York – U.S. stocks edge lower after China hiked bank reserve rate and investors in Europe sold bank stocks. National Semiconductor agreed to be acquired by Texas Instruments for $6.5 billion. Service industry expansion slows in March.[/R]

U.S. markets edge lower after investors digest the latest bank reserve rate increase in China and Australia left its key rate on hold.

National Semiconductor soared more than 70% after it agreed to be acquired by Texas Instruments for $6.5 billion in cash or $25 a share.

However, market participants focused on the service index due later and the latest minutes of Federal Open Market Committee meeting.

Service Industry Expansion Slows

The service industry index declined to 57.3 in March from 59.7 in February according to a private survey from the Institute for Supply Management.

The index above 50 shows expansion but at a slower pace and the measure that tracks the new orders in the month declined to 64.1 from 64.4 in February.

The business activity index declined to 59.7 from 66.9 and the index of prices paid declined to 72.1 from 73.3.

European markets declined after stocks in Asia closed mixed and Portugal debt rating was downgraded and retail sales eased in the euro-zone. Poland increased its benchmark rate to 4%.

China lifted its benchmark rate higher 25 basis points to stem the rise in loan growth and cut down the speculation in property prices.

Stock Movers

Drug store chain Walgreen increased 1.5% after it reported same store sales increased 3% in March.

Expedia ((EXPE)) increased more than 5% after the online travel agency and American Airlines ((AMR)) reached an agreement that will restore the display of fares and flights on the site.

Diamond Foods soared more than 7% after it agreed to acquire Pringles unit of Procter & Gamble for $2.35 billion. The company will assume $850 million in debt and pay $1.5 billion in Diamond stock.

Apple Inc ((AAPL)) declined 1% after Nasdaq OMX, the operator of Nasdaq 100 index said it plans to rebalance the index and cut its weighting of the tech leader from the current 20%.

Microsoft increased 1.5% on the index rebalancing news.

KB Home dropped 7% after the home builder said its fiscal first quarter loss widened on the fall in revenues and higher than expected charges.

Texas Instruments ((TXN)) declined 1.5% to $33.59 after it agreed to acquire National Semiconductor Corp ((NSM)) for $25 a share. National Semi soared 71% to $24.06.