British Airways Takes Europe Lower

Elena
02 Jul, 2007
New York City

European stock markets lost ground Monday, weighed down by weakness among oil-sensitive airlines and autos and Britain''s terror-alert level raised to

[R]1:00PM NY, 5:00 PM Frankfurt European markets lost ground amid weakness in the travel and auto sector.[/R]

European stock markets lost ground at the start of the third quarter, weighed down by weakness among oil-sensitive airlines and autos and Britain''s terror-alert level raised to ‘critical’. Of airlines, shares of British Airways lost 1.4%, easyJet declined 1.9%, while Air France-KLM shares fell 0.7%. In the automotive sector, Renault and BMW each lost more than 0.5% as oil prices neared $70 a barrel. Daimler shares slipped 0.3%.

Ahead of interest-rate decision by the ECB and the BoE later this week, the U.K.''s biggest property developers, British Land dropped 1.9% while shares in German insurance giant Allianz fell 2.1%.

On the positive side, French food group Danone rose 1.6% amid speculation that it is planning to sell its biscuit and cereal lines. The U.K. FTSE 100 lost 0.3% at 6,590.60, while the German DAX declined 0.6% at 7,958.24 and the French CAC-40 fell 0.5% at 6,026.95.


[R]11:30AM Market averages rallied, supported by strong manufacturing growth in June and deal news.[/R]

U.S. stocks rallied in a light trading session, as data showing faster growth in the manufacturing sector as well as fresh merger news generated positive sentiment at the start of Q3. Following the upbeat report, shares of large industrial companies Caterpillar and Honeywell rose 2% each.

A number of sectors advanced, with the steel sector posting notable gains. Rio Tinto ((RTP)), Steel Dynamics ((STLD)), and Worthington ((WOR)) moved to the upside after the ISM said the manufacturing sector unexpectedly expanded in June. Rate-sensitive real estate investment trusts and utilities stocks also moved higher amid a decrease by treasury yields. Among utilities, Exelon ((EXC)) and PSEG ((PEG)) advanced 2.6% each.

Shares of Research In Motion ((RIMM)) jumped 5.7% to lead gainers on the Nasdaq. Bank of New York Mellon ((BK)) boosted the S&P 500 with an advance of 8.5%. Och-Ziff Capital Management Group LLC filed an IPO with the SEC to sell up to $2 billion in Class A shares on the NYSE under the symbol OZM.

Among other stocks in focus, Dobson Communications ((DCEL)) jumped 12% after the wireless communications services provider agreed to be acquired by AT&T ((T)) for $2.8 billion. The Dow Jones industrial average was up 97.31 points, or 0.73%, at 13,505.93. The Standard & Poor''s 500 Index was up 12.22 points, or 0.81%, at 1,515.57. The Nasdaq Composite Index was up 22.96 points, or 0.88%, at 2,626.19.


[R]9:45AM Market opened higher, boosted by multibillion-dollar takeover deals.[/R]

Wall Street opened higher on the first day of the third quarter, boosted by enthusiasm over new merger deals, including a multibillion-dollar takeover of Canadian telecom carrier BCE. Economic data that showed faster manufacturing growth in June also helped generate positive sentiment. The ISM''s index advanced 56% last month, which was above 55.0% in May and economists'' forecast for a 55.1% reading.

A group led by the Ontario Teachers Pension Plan, including two U.S. private-equity houses, agreed to buy BCE ((BCE)) for $48.5 billion, sending its shares up 3.5%. Further in M&A action, AT&T Inc. ((T)) on Friday agreed to buy Dobson Communications ((DCEL)) for $2.8 billion. Carlyle Group offered $11.1 billion to acquire telecommunications company Virgin Media ((VMED)).

The Dow Jones industrial average was up 91.78 points, or 0.68%, at 13,500.40. The blue-chip average was supported by Caterpillar ((CAT)) and Honeywell International ((HON)), each rising 2%. The Standard & Poor''s 500 Index was up 12.32 points, or 0.82%, at 1,515.67. The Nasdaq Composite Index was up 22.82 points, or 0.88%, at 2,626.05.


[R]9:00AM Wall Street to open higher on takeover deals.[/R]

U.S. stock futures moved to the upside on Monday on the first day of the third quarter. Pre-market sentiment was lifted by several takeover deals, which managed to offset rising oil prices and overseas terrorism worries. A group led by the Ontario Teachers Pension Plan, including two U.S. private-equity houses, agreed to buy BCE ((BCE)) for $48.5 billion, sending BCE shares up 3%.

In other deal news, Carlyle Group reportedly offered between $33 and $35 a share for British cable operator Virgin Media. The offer values all of Virgin Media''s equity at up to $11.7 billion. Virgin Media stock jumped 17% in pre-market trading. AT&T ((T)) agreed to buy mobile operator Dobson Communications ((DCEL)) in a deal worth $2.8 billion.

On the economic news front, the Institute of Supply Management is due to release its manufacturing sentiment for June, which is largely expected to be unchanged from May. On Monday before the bell, Dow futures expiring in September were up 22.00, or 0.12%, at 13,539 while S&P 500 futures rose 5.00, or 0.33%, to 1,524.40. Nasdaq 100 index futures rose 6.50, or 0.33%, to 1,962.50.