Mergers Bring Buyers Back

123jump.com Staff
25 Apr, 2005
New York City

It was a day when deals, oil, housing and casino stocks ruled. And Google continued its climb adding 3.57% to the marathon win on Friday. Investors believe that more merger news will only drive the markets higher and the meeting between Saudi prince and President will bring more oil supply to the market.

It was the day when deals and bulls ruled the day.

Over the weekend, MCI embraced higher bid from Qwest forcing Verizon to respond in the next five days. Verizon is hoping that shaky finances of Qwest will convince shareholders to keep the deal under wraps.

Valero, independent petroleum refiner, announced that it has merged with Premcor and formed the largest independent petroleum refinery in the U.S. The $6.9 billion deal driven by the consolidation in the otherwise low margin refining business.

The oil price jump in last three years has given financial strength to these businesses and a rare opportunity to clean up the balance sheet.

According to National Petroleum Refiners association there are only 146 refineries in the country and in more than 20 years not a single refinery has been built.

Valero hopes through this merger it will save $100 million in costs and generate $70 billion in sales.

Hellman Friedman announced that it has purchased Double Click, once Internet high flyer for $8.50 per share valuing the company at $1.1 billion. Double Click stock during Jan 2000 traded at $145 on split adjusted basis.

National Association of Realtors reported that annualized March sales jumped to 6.89 million from 6.7 million in February, enough for traders to spark rally in housing stocks.

Neiman Marcus continue to trade on rumours that the LBO deal is expected at higher than $100 per share.

S&P - 0.87%
Nasdaq - 0.93%
Dow - 0.83%


In Other News

Arthur Andersen has agreed to settle $11 billion investor lawsuit, details were not announced.
Asian markets close moderately up.
Chinese oil import jumped 21% in March, Korea and Japan are scheduled to release their data next week.
Oil traded higher during the day but closed down 82 cents at $54.57 and gasoline futures closed at $1.651 down 13 cents as President Bush and Saudi Prince meet.
Mexican stocks jump 2% on better earnings expectations and strength in the U.S. averages
Brazilian currency Real reach three year high in mid-day trading
Foreign exchange markets put U.S. dollar, Yen and Euro in wild gyration facing rumors of imminent Chinese Yuan revaluation.
In NY metal markets closed close to unchanged after early morning weakness.
Italian Prime Minister forms a new government hoping that the current coalition will survive till the next general election scheduled in 2006.
Air Canada announced to purchase 96 Boeing 777 and 787 Dreamliner planes.

Earnings News

SBC reported 1Q of 27 cents vs. 58 cents a year ago on merger charges related to AT&T.
Kimberly-Clark reported 1Q earnings of 93 cents vs. 91 cents a year ago.
Reebok International reported 1Q of 70 cents vs. 63 cents a year ago.
Instinet reported 1Q of 6 cents vs. 4 cents a year ago on Nasdaq merger charges.