Merger Deals of $25 Billion Lift World Indexes

Bikram Pandey
21 May, 2012
New York City

U.S. indexes gained after trading at a 4-month low on Friday. Political leaders in Europe ratcheted up rhetoric of supporting Greece in the euro zone and China said it will support more growth measures. Merger deals of $25 billion were announced today.

[R]4:00 PM New York – U.S. indexes gained after trading at a 4-month low on Friday. Political leaders in Europe ratcheted up rhetoric of supporting Greece in the euro zone and China said it will support more growth measures. Merger deals of $25 billion were announced today.[/R]

U.S. indexes rebounded from a 4-month low after French and German leaders expressed commitment to work together to keep Greece in the euro zone and Chinese leader Wen Jiabao pledged to stimulate economic growth measures. Stocks were also higher after merger deals of $25 billion.

In New York trading, S&P 500 index gained 1.4% and the Nasdaq gained 2.3%.

In merger news, Alibaba agreed to repurchase partial Yahoo! stake for $7.1 billion. DaVita agreed to acquire HealthCare Partners for $4.42 billion. China-based Wanda agreed to buy AMC Entertainment for $2.6 billion. Eaton acquired Cooper Industries for $11.8 billion.

The European indexes gained after G-8 leaders reiterated their support for Greece. Euro area construction output rebounded in March and home prices in the UK rose in April. Ryanair slumped 4% on weak fiscal year outlook. Kabel Deutschland agreed to buyTele Columbus for €603 million.

Stocks in Tokyo rebounded after a steep loss on Friday and seven consecutive weeks of losses in the benchmark Nikkei index. Robots and automated machinery maker Fanuc gained after the company plans to expand production capacity of robotics machinery.

Rupee in India traded at a new all-time low of 55.05 against one dollar as imports race ahead of exports and Reserve Bank of India stayed on the sidelines after a sharp plunge in the currency in the last five months.

Australian stocks rebounded and closed higher after G8 leaders urged Greece to stay in the currency union and honor its financial commitment. Buildings products maker, James Hardie returned to profitability on one-time tax gain. Resource stocks closed higher.

The Australian dollar gained a fraction from its 4-month low and closed at 98.95 U.S. cents.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond increased to 1.73% and 30-year U.S. bond edged lower to 2.79%.

The U.S. dollar edged up to $1.279 to one euro and gained against the Japanese yen to 79.35 in New York trading.

Immediate delivery futures of Texas crude oil increased $1.06 to $92.57 a barrel and Brent crude futures added $1.69 to $108.83. Futures of natural gas decreased 0.12 cents to $2.63 per mbtu and gasoline price added 5.10 cents to 288.62 cents a gallon.

In metals trading, copper added 3.05 cents to $3.49 per pound, gold decreased $2.10 to $1,589.80 per ounce and silver decreased 40 cents to $28.31.