Genentech Bid, Financials Rally

123jump.com Staff
21 Jul, 2008
New York City

U.S. stocks trended lower after rallying at the opening. Swiss pharmaceutical company Roche offered $89 per share to Genentech stock holders for 44% of the company that it does not own. The stock rallied in the hope that Roche may raise its offer above $100 per share. Separately, financials rallied in the morning after Bank of America reported 41% drop in earnings and estimated Countrywide merger will add earnings faster than earlier expected.

[R]1:30 PM New York – U.S. stocks gained as the Bank of America results beat expectations. Roche offers $89 per share of for Genentech stock it does not own.[/R]

Dow Jones Industrial Average lost 17.58 or 0.34% to 11,478.98 and S&P 500 gained 1.02 or 0.47% to 1,261.70.

Dow Gainers and Losers

Of the 30 stocks in Dow Jones Industrial Average 21 stocks gained and 9 declined.

Merck & Co led the decliners in the Dow Jones Industrial Average with a loss of 2.97% or $1.12, to $36.56 followed by losses in JP Morgan Chase of 0.62% or $0.25, to $39.77, in IBM of 0.54% or $0.70, to $129.19, in Verizon Communication of 0.45% or $0.16, to $35.29, and in Coca Cola Co of 0.27% or $0.14, to $49.89.

America International Group led the gainers in the Dow Jones Industrial Average index with a rise of 9.697% or $2.43, to $43 followed by increases in Bank of America of 9.53% or $2.62, to $30.11, in General Motors Inc of 2.81% or $0.37, to $13.55, in Citigroup of 2.79% or $0.54 to $19.89 and in Home Depot Inc of 0.77% or $0.18 to $23.62.

Stock Movers

Genentech Inc. the biotechnology company rose 16% to $92.25 after Switzerland based Roche offered $44 billion or $89 per share for the 44% of Genentech shares it does not own. Roche owns 56% Genentech and offered only 9% premium to the closing price on Friday. Drugs developed at Genentech contribute nearly 31% of Roche sales of Sfr 46.1 billion or $45.5 billion. Drug analysts expect Roche to increase its offer above $100.

Genentech Inc ((DNA)) in the last one year traded as high as $82.50 in March 2008 and as low as $65.35 in January 2008. Based on the yesterday’s closing price the company has a market cap of $85.98 billion.

Yahoo Inc fell 3.12% to $21.76 after the company agreed to add three board member seats including Carl Ichan on its board and expand it to 11 members. Ichan agreed to drop his fight to replace the entire Yahoo! board.

Yahoo Inc ((YHOO)) in the last one year traded as high as $34.08 in October 2007 and as low as $18.58 in January 2008. Based on the yesterday’s closing price the company has a market cap of $29.86 billion.

Fannie Mae the company that is engaged in providing funds to mortgage lenders rose 9% to $14.60 after news came that Henry Paulson the Treasury Secretary said that he was optimistic that the senate will pass his rescue plan for the biggest mortgage firms.

Fannie Mae ((FNM)) in the last one year traded as high as $70.57 in August 2007 and as low as $6.68 in July 2008. Based on the yesterday’s closing price the company has a market cap of $16.56 billion.

S&P Movers

Of the stocks in S&P 500 index, 308 increased 188 declined and 4 remained unchanged.

Schering-Plough led decliners in the S&P 500 index with a loss of 6.44% or $1.38, to $20.06 followed by in losses in Fidelity National of 3.98% or $0.83, to $20.01, in Public Storage of 3.83% or $3.23, to $81.16, in Sherwin-Wiliams of 3.83% or $2.02, to $52.10 and in Stanley-Works of 3.40% or $1.54, to $43.71.

Fannie Mae led gainers in the S&P 500 index with a rise of 24.25% or $3.25, to $16.65 followed by increases in Freddie Mac of 10.78% or $0.99, to $10.17, in Wamu Inc of 10.30% or $0.61, to $6.53, in America International Group of 10.25% or $2.57 to $27.64. Bank of America of 9.53% or $2.62 to $30.11.