Best Buy Founder Offers $8.8 B, Wall Street Higher on EU Hopes

Arthi Gupta
06 Aug, 2012
New York City

Wall Street traded higher at the opening and the advances in technology and energy sectors led the gainers. Investors are scheduled to review the international trade, wholesale trade inflation and 30-year bond auction and a barrage of earnings from retailers.

[R]10:15 AM New York – Wall Street traded higher at the opening and the advances in technology and energy sectors led the gainers. Investors are scheduled to review the international trade, wholesale trade inflation and 30-year bond auction and a barrage of earnings from retailers.[/R]

Market indexes in New York opened higher on the optimistic note that European leaders are set to approve the next round of bond purchase and coordinate actions with the European Central Bank.

Merger news dominated at the opening after BestBuy ((BBY)) founder Richard Schulze offered to buy the consumer electronics retailer for a price that valued the company at $8.8 billion.

BestBuy soared 20% after the founder offered to buy the remaining shares of the company that he doesn’t already own for $24 to $26 a share, a 36% to 47% premium over Friday’s closing stock price. Best Buy had 339.9 million shares outstanding as of June 6.

Investors are getting ready to digest another week of earnings release and busy public offering schedule.

Cablevision and Disney are scheduled to release earnings on Tuesday and Computer Sciences, Macy’s and Ralp Lauren and News Corp are expected to release quarterly earnings on Wednesday. Retailers Kohl’s and Nordstrom are expected to release better than expected earnings on Thursday.

Manchester United, the U.K. based soccer franchise group is expected to price its public offering and list shares in New York this week.

Asian markets gained tracking the gains in Friday’s trading after better than expected new job additions in the U.S. economy.

Australia-based Fortescue Metals Group Ltd. said that it has secured $1.50 billion in new funding for the expansion of its flagship iron ore operations in Western Australia''s Pilbara region.

Cognizant Technology ((CTSH)) re-affirmed full-year revenue guidance and lifted its full-year adjusted profit outlook.

Earnings Review

Cinemark Holdings, Inc. ((CNK)), the motion picture exhibitors said second quarter revenues rose to $649.6 million compared to $620.6 million in the prior-year quarter. Net income attributable to Cinemark gained to $51.6 million or 45 cents per diluted share compared to $40.4 million or 35 cents per share last year.

Cognizant Technology Solutions Corp. ((CTSH)), the IT services provider reported second quarter revenue rose 20.9% to $1.795 billion. Net income increased to $251.93 million or 82 cents per share from $208.05 million or 67 cents per share last year.

The AES Corporation ((AES)), the power company reported second quarter total revenues declined to $4.192 billion from $4.435 billion in the prior year quarter. Net income attributable to the company dropped to $140 million or 18 cents per diluted share, from $174 million or 22 cents per share in the same quarter last year.

Tyson Foods, Inc. ((TSN)), the food production company said third quarter sales rose to $8.31 billion, from $8.25 billion in the earlier year quarter. Net income attributable to the company plunged to $76 million or 21 cents per diluted share, from $196 million or 51 cents per share a year before.