U.S. Stocks Edge Higher, IBM Buys Cognos

123jump.com Staff
12 Nov, 2007
New York City

U.S. stocks in the morning traded mildly higher. IBM agreed to buy Cognos for $58 per share of $5 billion. Third transaction in the business intelligence software segment in less than a year. Oracle bought Hyperion and SAP purchased Business Objects earlier in the year. European markets eged lower. Asian markets closed sharply lower led my more than 3% losses in Hong Kong, Thailand, and Korea. Yen reaches 11-year high.

[R]11:00AM New York – The U.S. market averages edge higher after a week of losses in world markets.

The U.S. market averages traded sideways after ninety minutes of opening in New York. Dow Jones Industrial Average gained 58 to 13,100, Nasdaq added 1 to 2,629, and S&P 500 increased 4 to 1,458.

IBM agreed to acquire Cognos Inc. for $58 per share or $4.9 billion. Cognos ((COGN)) with world-wide staff of 4,000 serves 25,000 customers and it will contribute to the rising profitability at software division at IBM. Cognos jumped $4.17 to $57.15 and IBM added $1.87 to $102.12.

Business intelligence software developers have been in demand as more customers dig for trends in their customer behavior. SAP AG purchased Business Objects for $7 billion a month ago and Oracle acquired Hyperion Solutions for $3.3 billion seven months ago.

Blackstone Group ((BX)) reported third quarter net loss of $113.2 million compared to profit of $372 million a year ago on revenue rise of 14% to $526 million. The recently listed unit in the company jumped as high as $38 in an offering that raised $4.13 billion.

In the earnings news this morning, EchoStar Communications reported earnings per share of 44 cents, Hewitt Associates lost $2.55 per share, Osiris Therapeutics lost 36 cents, and Tyson Foods earned 9 cents.

European markets traded lower after the U.S. markets opened. Norway led the decliners in the region with a loss of 2.4% followed by losses in the Netherlands of 1.4%, in Germany of 0.5%, in France of 0.3%, and in Switzerland of 0.14%.

European banks regained the momentum after a week of losses swirling around the Barclays. Deutsche Bank, UBS, and RBS gained more than 4%. HSBC fell 0.6% ahead of earnings report.

Asian markets closed sharply lower on the first day of trading this week. Hong Kong led the decliners in the region with a loss of 3.9% followed by losses in Taiwan and South Korea of 3.35%, in Japan and Singapore of 2.5%, in Thailand of 1.5%, in Australia and Indonesia of 1.3%, and in India of 0.9%.

Nikkei 225 fell for the sevenths session in a row as worries of slower exports growth and rising yen hobbled investors. Financials, automotive, and electronics companies fell sharply.

The Bank of China raised reserve requirements for commercial banks for the ninth time this year. The latest hike of 0.5% in capital requirement is now raised to 13.5% to reduce liquidity flowing in the market. The recent trade surplus has increased liquidity in renminbi which has struggled to find higher yielding assets. The real estate prices are at a record high, bank deposits still yield below inflation rate, and individual investors have poured excess cash into stock market driving the major indexes above 140% for the year so far. The indexes have corrected in the last five weeks and lost 15%, but stocks are still trading at earnings multiple above 45.