Deals Drives S&P 500 and Dow Jones to New Record Highs

Nichole Harper
18 May, 2015
New York City

Stocks on Wall Street overcame morning weakness and traded higher on merger deals. Confidence index measuring home builders declined in May. U.S. Treasury bonds edged lower and the S&P 500 and the Dow Jones index traded at record highs. Luxury goods makers sue China based Alibaba.

[R]12:40 PM – Stocks on Wall Street overcame morning weakness and traded higher on merger deals. Confidence index measuring home builders declined in May. U.S. Treasury bonds edged lower and the S&P 500 and the Dow Jones index traded at record highs. Luxury goods makers sue China based Alibaba.[/R]

Stocks on Wall Street traded higher after morning weakness and several stocks jumped after the merger announcements.

Stocks struggled in morning after a private measure of confidence among home builders declined.

The National Association of Home Builders Housing Market Index declined to 54 in May from 56 in the previous month.

The latest private read on home builders added to a string of weak economic data from the government, industrial output slipped and consumer index declined.

On Wall Street, Tollbooth Strategy Index slipped 0.3% or 28.83 to 10,749.50.

S&P 500 index edged up 0.66 to 2,123.37 and the Nasdaq Composite Index rose 1.56 to 5,049.94.

Crude oil in New York edged down 0.06 cents to $59.63 a barrel and gold rose 90 cents to $1,226.20 an ounce.

U.S. Movers

Ascena Retail Group Inc ((ASNA)) jumped 2.9% or 42 cents to $14.63 after the specialty retailer agreed to acquire women''''s apparel retailer Ann, Inc for about $2 billion in cash and stock, a 21.4% premium over the closing price of Ann on May 15.

Under terms, Shareholder of Ann will receive $37.34 in cash and 0.68 of Ascena shares.

The transaction is expected to close in the second-half.

Shares of Ann, Inc surged 20% to $46.45.

Par Pharmaceutical Companies, Inc, the generics drugs-maker agreed to be acquire by the U.K.-based privately held and specialty healthcare solution provider Endo International Plc for $8.05 billion in cash and shares from private investment firm TPG Capital, L.P.

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

European Markets

In London trading, FTSE 100 index fell 7.86 to 6,952.63 and in Frankfurt the DAX index rose 0.2% or 26.01 to 11,473.04.

In Paris, CAC 40 index slipped 0.6% or 27.94 to 4,965.88.

Endo International Plc, the Ireland-based specialty healthcare company agreed to acquire the U.S.-based privately held Par Pharmaceutical Companies, Inc for $8.05 billion in cash and shares from private investment firm TPG Capital, L.P.

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

Kabel Deutschland Holding AG fell 0.5% to €123.15 after the Germany-based cable network operator reported revenues in the year ending in March climbed 6.3% to €2.02 billion from €1.90 billion in a year ago period.

Net in the year swung to profit from a year ago to €239 million compared to a loss of €68 million and diluted earnings per share swung to €2.70 from a diluted loss of €0.77.

The company said revenues in TV segment increased 0.7% to €1.17 billion and revenues in internet and phone business surged 15.3% to €848 million.

Asian Markets

Stocks in Tokyo closed higher after machinery orders rose more than expected and also insurance company stocks gained after Dai-ichi Life lifted dividend share of the income.

The seasonally adjusted total value of machinery orders received in March climbed 2.9% following the downwardly revised 1.4% drop in February.

On a yearly basis, core machine orders added 2.6% compared to 5.9% increase in the previous month, the Cabinet Office said today.

In fiscal 2014, total machinery orders increased 8.4% and private-sector orders rose 0.8%.

In the April-June period the total amount of machinery orders are expected to decrease 1.4%.

The seasonally adjusted industrial production in March slipped 0.8% revised from the initial estimate of 1.2% decline, the Ministry of Economy, Trade and Industry reported today.

Shipments in the month decreased 0.6% but inventory ratio jumped to 0.9% and capacity utilization rate dropped 1.2% compared to decline of 2.7% in the month a year ago.

The Nikkei 225 Stock Average jumped 157.35 or 0.8% to 19,890.27 and the broader Topix index increased 19.55 to 1,626.66.

The yen closed at 119.64 against a dollar.

Dai-ichi Life Insurance Co Ltd surged 10.6% to 2,197.50 pence after the life insurance company reported revenues in the year ending in March soared 20% to 7.25 trillion yen from 6.04 trillion yen in a year ago period.

Net income in the year surged 82.8% to 142.47 billion yen compared to 77.93 billion yen and diluted earnings per share climbed to 124.87 yen from 78.54 yen in the same period a year ago.

The insurer forecasted net revenues for the year ending in March 2016 to decline 6.6% to 6.77 trillion yen and net income to advance 13% to 161 billion yen.

Market indexes in Mumbai surged on the expectations of normal arrival of monsoon and investors raised the prospect of another rate cut at the next meeting of the Reserve Bank.

Rupee weakened 21 paisa to 63.72 against one U.S. dollar.

The Sensex Index jumped 363.30 or 1.3% to close at 27,687.30. The CNX Nifty gained 111.30 or 1.4% to 8,373.65.

Bharti Airtel Limited increased 1.1% to ₹396.80 after the largest wireless services provider signed an agreement to raise up to $2.5 billion from China Development Bank and Industrial and Commercial Bank of China.