IBM Offers $1.3 B for Internet Security Co

123jump.com Staff
23 Aug, 2006
New York City

Market averages decline at mid-day after the housing and weekly petroleum report. The market averages are down 0.4%. July housing sales declined 11% from a year ago and 4.1% from June. Weekly petroleum reported a decline in crude oil inventory decline of 0.6 million less than expected decline of 1 million barrels. Oil prices declined. IBM agreed to buy for $1.3 billion Internet Security Systems.

[R]12:15PM IBM to buy Internet Security Systems for $1.3 billion.[/R]
Market averages traded lower after existing home report. Dow at mid-day is trading down 44.01 points, Nasdaq down 14.02 points and S&P 500 dropped 5.3 points. Home builders stocks declined between 1% and 3%. Toll Bros ((TOL)) lost 74 cents to $24.47, D.R. Horton ((DHI)) declined 46 cents to $21.05 and Bezer Homes ((BZH)) lost $1.07 to $39.47.

IBM ((IBM)) said that it plans to spend $1.3 billion in cash to purchase Internet Security Systems ((ISSX)). The network monitoring and analysis company is known for network management and security seystems services for large companies. The Company stock closed at $26 in yesterday’s closing. IBM is offering only 8% proemium to acquire the company.

IBM has been actively purchasing companies in the Internet services and online document management area. ISS has app. 1.300 employees and 17,000 customers.

[R]10:30AM The Sensex falls for a second day in a row in a volatile trading.[/R]
The Sensex on BSE lost 95.97 points, or 0.83%, to end on 11,406.65. The turnover on BSE was Rs 2,982 crore, down from Tuesday’s Rs 3,079 crore. The index traded in the range of 205 points. The market-breadth was weak, as only 887 shares advanced on BSE compared to 1,610 that declined while 64 shares were unchanged. Of the 30-member Sensex stocks, 21 declined while only 9 advanced.

HDFC led the decliners, plunging 3.15% to Rs 1,276.10 followed by Bajaj Auto losing 2.16% to Rs 2691.40 and Cipla shedding 2% to Rs 246.40. Satyam Computers led the advancers, adding 1.24% to Rs 804.

Metal shares were the worst hit. Tata Steel plunged 1.80% to Rs 506.10, SAIL was down 2.32% to Rs 75.70, Uttam Galva lost 1.55% to Rs 32, Kalyani Steel sank 4.53% to Rs 277 and Jindal Saw moved back 4.66% to Rs 291.50. Auto stocks were also hit. Maruti Udyog shed 1.46% to Rs 826, LML was off 4.42% to Rs 18.40, Hindustan Motors declined 4.53% to Rs 36.85, Ashok Leyland dipped 2% to Rs 38.85 and Mahindra & Mahindra moved down 3.70% to Rs 635.

Consumer stocks also declined, pressed down by selling pressure. Nestle India lost 0.82% to Rs 1,011, Dabur India declined 1.66% to Rs 136.25, ITC shed 2% to Rs 178.10, Colgate-Palmolive slipped 2.30% to Rs 357 and Hindustan Lever edged down 1% to Rs 230.

Index large-cap Reliance Industries slid 0.06% to Rs 1,064.25. It traded between Rs 1,073.85 and Rs 1,056.05 for the day. Shares of SBI were unstable throughout. It traded between Rs 1,053.45 and Rs 859.50. The stock closed at 1.91% lower, at Rs 861.10 on a volume of 7.15 lakh shares. The most active stock on BSE was Educomp Solutions with a turnover of Rs 154.14 crore. Educomp closed 6.90% lower, at Rs 532.20 on a high volume of 27.63 lakh shares.

Other companies that declined were Bombay Dyeing plunging 10.90% to Rs 635 on high volumes of 19.41 lakh shares, Mahindra Gesco Developers' falling 10% to Rs 756.50 on 16.08 lakh shares.

Apart from Satyam Computers, other stocks that advanced were Sundram Fasteners soaring 6.91%, to Rs 128.50 following the company surprising statement of declaring a liberal 1:1 bonus issue. Suzlon Energy gained 1.15%, to Rs 1,209, Gayatri Sugar advanced 1% to Rs 12.40 and R Systems International rose 1.80%, to Rs 165.50.

[R]10:10AM Existing home sales declined 4.1% in July.[/R]
Total existing home sales including single-family, townhomes, condominiums and co-ops – dropped 4.1 percent to a seasonally adjusted annual rate1 of 6.33 million units in July from a downwardly revised pace of 6.60 million June, and were 11.2 percent below the 7.13 million-unit level in July 2005. The national median existing-home prices for all housing types was $230,000 in July, up 0.9 percent from July 2005 when the median was $228,000.

[R]9:45AM Market show steady rise from the opening.[/R]
Market averages opened on a weak note only to rise steadily in the first fifteen minutes of trading. Traders are waiting for a reprot on existing home sales and weekly petroleum invenotory report. Industrial stocks are taking the leads in the early opening. Caterpillar is up 40 cents, Deere & Co is 30 cents and Ingersoll Rand is 5 cents at the opening. BHP Billiton is down 25 cents on earnings.

Oil is trading 30 cents lower in the early trading but gold is up $4.40 at the opening in New York.

[R]9:20AM Pre-Market trading averages expect market to open lower.[/R]
Market averages are expected to open lower despite a fall in oil prices in the pre-market trading. Iran has requested for negotiations to respond to the demands of the U.N. to stop the uranium enrichment process. Traders are also awaiting two economic reports this morning. Weekly petroleum report due in the morning at 10:30 AM and existing home sales report at 10:AM.

Weekly Petroleum Report is expected to show a decline in crude oil and gasoline invenotries of at least 1 million barrels. Housing report for the month of July is expected to show that existing home sales have declined in July. Housing market has been steadily declining for the last six months and has become a subject of intense debate. Increasigly the ‘soft landing’ view is revised by analysts to somewhat approaching ‘hard landig’ in the housing market.

Asian markets closed lower with 0.11% decline in Tokyo. Thailand lost 1.12% and India declined 0.83% in a volatile session. At mid-day European markets are trading lower with 0.3% decline in Frankfurt.

BHP Billiton ((BHP)), Anglo-Australian mining giant, lost 3% in the UK trading on the earnings news. The company reported a profit of $10.45 billion compared to $6.43 billion a year ago on revenue of $39.10 compared to $31.15 billion a year ago. The company also stated that it plans to spend $3 billion to buy back stocks in the next eighteen months.

[R]7:30AM Asian markets fell Wednesday, ahead of earnings releases.[/R]
Asian markets ended lower on Wednesday. The Nikkei 225 Average finished down 0.1% to 16,163.03. Shares of Canon gained 1% as traders factored in what are expected to be strong earnings for the July to September period. KDDI, cellular services provider, edged up 0.3% after the company announced it would provide a service allowing its cell phones to be used as credit cards. Shares of NTT DoCoMo, which already offers a credit facility on its cellular phones, shed 1.1%.

Australia's S&P/ASX 200 ended up 0.1% to 5,082.32, after trading flat for most of the day, on rising optimism ahead of half-year results from BHP Billiton. The Hang Seng index of Hong Kong closed lower 0.3% at 17,088.39. The H share index, which tracks mainland incorporated companies listed in Hong Kong, was down 0.7% at 6,960.10. South Korea's Kospi shed 0.8%, while Singapore's Straits Times index fell 0.4%. In Shanghai, the benchmark Composite index finished basically flat, down less than 0.1%.

[R]6:30AM European stocks traded slightly lower, holding to a tight range.[/R]
European markets traded lower by mid-morning on Wednesday. London’s FTSE 100 edged down 0.1% to 5,896.2, while Frankfurt’s Xetra Dax lost 0.2% to 5,810.12. The CAC 40 in Paris shed 0.1% to 5,124.91. Nestle advanced 1.9% following its statement that its first-half net income grew a better-than-forecast 11.4%. Unilever and Cadbury Schweppes were marginally higher.

Mining stocks, however, declined. BHP Billiton plunged 2.4% after gaining in recent weeks and after the company said over the longer term it expects the introduction of new capacity to return prices to more sustainable levels. Away from mining, European defense company EADS was another decliner, shedding 1.4% in the wake of a report stating that it''s planning to invest 2 billion euros ($2.58 billion) in India over the next 15 years.

Crude oil fell on expectations that gasoline demand will slow with the end of the travel season in the U.S., the world''s biggest energy consumer. Crude oil for October delivery declined as much as 59 cents, or 0.8%, to $72.51 a barrel in after-hours trading on the NYME. It traded at $72.54 at 10:59 a.m. in London, where, also, Brent crude oil for October settlement declined 52 cents to $72.70 a barrel on the ICE Futures Exchange.

The U.S. dollar was lower against other major currencies in European trading Wednesday morning. The euro purchased $1.2817, up from $1.2796 late Tuesday in New York. The British pound traded at $1.8920, up from $1.8866. The greenback bought 116.25 Japanese yen, down from 116.57. Gold dealers in London fixed a recommended price of $623.50 per troy ounce at midmorning, up from $622.30 late Tuesday.

[R]5:00AM Gold futures fell Tuesday on stronger dollar and technical trading.[/R]
December gold ended $1.20 lower at $634 a troy ounce, as the contract got as low as $629.60 during the session. The most-active September silver contract finished at $12.265 an ounce, down 8 cents on the day. October platinum was off $4.30 at $1,237.80 an ounce while September palladium lost $4.20 at $341 an ounce. The September copper contract shed 2.65 cents to settle at $3.4930 per pound. December moved back 1.15 cents to $3.4780.

The front-month September light, sweet crude-oil contract, which expires Tuesday, finished 18 cents higher at $72.63 a barrel. October futures, which will become the front-month contract, sank 20 cents to $73.10. September gasoline rose 0.27 cent to $1.9393 a gallon. September heating oil was up 0.39 cent to $2.0366 a gallon, while September natural gas ended up 38.4 cents at $7.008 a million British thermal units. On the New York Board of Trade, September Arabica coffee futures settled up 1.20 cents at $1.0820 a pound while December gained 1.65 cents to $1.1260. Futures on raw sugar in foreign ports for October moved 0.08 cent lower to 12.06 cents a pound.