On Merger Monday Market Indexes on Wall Street Surge 1%

Nichole Harper
30 Mar, 2015
New York City

Merger Monday lifted market indexes on Wall Street and the talks of additional stimulus in China also bolstered indexes in Asia. However, in Europe indexes struggled after Greek bailout plan was deemed inadequate by international lenders.

[R]1:20 PM New York – Merger Monday lifted market indexes on Wall Street and the talks of additional stimulus in China also bolstered indexes in Asia. However, in Europe indexes struggled after Greek bailout plan was deemed inadequate by international lenders.[/R]

Stocks charged ahead on Wall Street after deal several deals worth billions of dollars dominated Monday morning headlines.

UnitedHealth agreed to acquire Catamaran Corp for $12.8 billion, Horizon Pharma said it plans to buy Hyperion Therapeutics Plc for $1.1 billion and Teva Pharmaceuticals agreed to buy Auspex Pharmaceuticals for $3.2 billion.

In Switzerland Dufry AG agreed to acquire a majority stake in the Italy-based rival World Duty Free SpA for $3.9 billion and the U.K. based, outsourcing company, Quindell agreed to sell its division to Australian based Slater and Gordon for nearly $1 billion.

In addition, smaller deals were announced in Europe and in Japan.

On the domestic economic front, personal income in February rose 0.4% and disposable personal income increased 0.4%. Personal consumption expenditure rose 0.1% in the month, the Department of Commerce said.

On Wall Street trading, Tollbooth Strategy Index jumped 0.8% or 78.92 to 10,505.52.

S&P 500 index climbed 22.98 or 1.1% to 2,084.02 and the Nasdaq Composite Index gained 45.51 or 0.9% to 4,936.42.

Crude oil in New York trading slid 37 cents to $48.50 a barrel and gold tumbled $15.40 to $1,184.40 an ounce.

U.S. Movers

Horizon Pharma Plc ((HZNP)) surged 15.1% or $3.29 to $25.10 after the Ireland-based biopharmaceutical company agreed to acquire Hyperion Therapeutics, Inc for $46 per share in cash or $1.1 billion, to expand drug portfolio by adding two treatments for rare metabolic condition.

The transaction is expected to close in the second-quarter of this year.

Teva Pharmaceutical Industries Ltd jumped 3.1% or $1.91 to $63.89 after the generic drug maker offered $3.2 billion to acquire Auspex Pharmaceuticals, Inc.

UnitedHealth Group Inc ((UNH)) jumped 2.2% or $2.56 to $120.58 after the diversified healthcare company agreed to acquire Catamaran Corp for $12.8 billion in cash to increase its pharmacy benefit business.

UnitedHealth''s offer of $61.50 a share represents a premium of 27% to the closing price of Catamaran''s stock.

The transaction is expected to close in the fourth quarter of 2015.

European Markets

In London trading, FTSE 100 index gained 0.6% or 39.59 to 6,894.61 and in Frankfurt the DAX index climbed 1.6% or 186.85 to 12,055.18.

In Paris, CAC 40 index jumped 0.9% or 43.56 to 5,077.62.

Dufry AG surged 7.7% to 145.90 Swiss francs after the Switzerland-based travel retailer agreed to acquire a majority stake in Italy-based rival World Duty Free SpA for about €3.6 billion from the Benetton family.

Shares of World Duty Free SpA tumbled 8.4% to €10.04.

Holcim Ltd fell 0.3% to 73.10 Swiss francs after the Switzerland-based cement producer divested its entire remaining stake of about 27.5% in Thailand-based rival Siam City Cement PCL in deals worth 655 million francs or $679 million.

Quindell Plc climbed 6.1% to 146.43 pence after the consulting and outsourcing services provider signed a conditional agreement to dispose the Professional Services Division to Australia-based law-firm Slater and Gordon Limited for £637 million in cash or $923.4 million.

Asian Markets

Stocks in Japan rebounded after commodities prices eased and Bank of China hinted more economic support.

Iron ore price declined to a six-year low to Friday’s close for a delivery to a port in China as Chinese construction sector face falling home prices and a decline in new home sale.

However, later the Bank of China suggested that it may offer additional support to prop up housing market.

On the domestic economic front, industrial production in February declined 3.4% from the previous month, a decrease for the first time in three months. Production declined 2.6% from the month in a year ago, the Ministry of Economy, Trade and Industry said.

The seasonally adjusted index in February was 98.9.

Shipments in February plunged 3.4% from the previous month and decreased 3.1% from a year ago month.

The department forecasted based on the survey of manufacturing companies, production to drop 2% in March but climb 3.6% in April.

The Nikkei 225 Stock Average jumped 125.77 or 0.6% to 19,411.40 and the broader Topix index rose 4.99 to 1,557.78.

The yen closed at 119.79 against a dollar.

Stocks in Mumbai soared following higher closing in New York and a rally across Asia.

The sharp rally on Dalal Street was powered by exporters, wireless telecoms and banks. Banks led the upward charge on a widespread speculation that the Reserve Bank of India may lower rate again as early as the next meeting.

Rupee eased 26 paisa 62.67 against one dollar.

The Sensex Index climbed 517.22 or 1.9% to close at 27,975.86. The CNX Nifty jumped 150.90 or 1.8% to 8,492.30.

Bharat Heavy Electricals Limited rose 2.6% to ₹238.60 after the power generation equipment maker received contract worth ₹5,000 crore for 1,080 megawatts Manuguru thermal power project in Telangana.

Tata Teleservices Maharashtra Limited gained 2.5% to ₹7.87 after the communications services provider won telecom spectrum 2.5 megahertz each in 800 megahertz band in Mumbai and Maharashtra to bid values of ₹1,819 crore and ₹1,999 crore respectively.