U.S. Indexes Trim Losses and Dollar Advances on Merger Monday

Nichole Harper
29 Sep, 2014
New York City

U.S. indexes opened sharply lower but by mid-day trimmed losses and the dollar advanced after protests erupted in Hong Kong against China rule. Tibco Software agreed to a $4.3 billion private-equity offer. SoftBank pursuit of DreamWorks Animation that many believe may never lead to deal.

[R]2:20 PM New York – U.S. indexes opened sharply lower but by mid-day trimmed losses and the dollar advanced after protests erupted in Hong Kong against China rule. Tibco Software agreed to a $4.3 billion private-equity offer. SoftBank pursuit of DreamWorks Animation that many believe may never lead to deal.[/R]

U.S. stocks opened lower on merger Monday after violence escalated between Russia backed rebels and Ukraine and the U.S. bombed Islamist State of Iraq targets in Syria.

Also, market indexes took a dive after protests perked up in Hong Kong and the island controlled by China demanded more autonomy in its administration.

Tollbooth Index rose 0.3% or 30.40 to 9,236.95.

S&P 500 index declined 8.83 to 1,973.99 and the Nasdaq Composite fell 16.50 to 4,495.79.

U.S. Movers

Tibco Software Inc. ((TIBX)) soared 22% to $23.68 after the software developer agreed to be acquire by Vista Partners for $4.3 billion, in the largest U.S. tech buyout this year.

Tibco stockholders will receive $24 a share in cash, 23% premium to the closing price of $19.51 on Sept 26.

DreamWorks Animation SKG Inc ((DWA)) surged 20.7% or $4.63 to $26.99 on news that animated films maker may be acquired by Japan-based conglomerate Softbank Corp in a deal worth about $3.4 billion.

SoftBank offered $32 a share, a premium of more than 40% of closing price of Friday.

Encana Corporation ((ECA)) gained 1% or 23 cents to $21.13 after the energy producer signed merger agreement with Athlon Energy Inc. to acquire the Texas-based oil company for $5.93 billion in cash or $58.50 per share.

The transaction is expected to close by the end of this year.

European Markets

In London trading, FTSE 100 index slipped 0.5% or 31.21 to 6,618.18 and in Frankfurt the DAX index declined 1.1% or 101.69 to 9,388.86.

In Paris, CAC 40 index dropped 1.2% or 53.70 to 4,341.05.

Balfour Beatty Plc plunged 18.9% to 182.15 pence after the U.K.-based construction company lowered profit forecast by £75 million or $122 million. The company has lowered profit outlook for the fifth time in two-years and also suffered from rising costs, project delays and skill shortages.

The company also said net debt to increase to £580 million at the end of second-half from £420 million at the end of first-half.

The infrastructure company signed a contract in a joint venture with AMEC and Jacobs to provide a new nuclear waste processing plant at Sellafield in Cumbria, UK with an estimated cost between £240 million and £336 million.

Balfour Beatty also won project worth £34 million to decommission a nuclear power plant.

Asian Markets

Stocks in Tokyo advanced after the yen dropped to a new low in the year and exporters led the gainers.

The Nikkei 225 Stock Average gained 80.78 or 0.5% to 16,310.64 and the broader Topix index rose 5.35 to 1,337.30.

The yen traded near 109.44 against one U.S. dollar.

Prime Minister Narendra Modi stepped up efforts to attract U.S. businesses to invest in India on this five-day visit.

Modi met several lawmakers and conferred with chief executives of MasterCard, Pepsi, BlackRock, Goldman Sachs and General Electric.

In Mumbai trading, the Sensex Index slid 29.21 to close at 26,597.11 The CNX Nifty fell 9.95 to 7,958.90.

IDBI Bank Limited fell 0.2% to Rs 62.55 after the bank received board approval to increased capital raising limit to Rs 15,000 crore or $2.2 billion from the previous Rs 4,000 or $690 million.