Guidant Offsets Oil Rise

Elena
05 Dec, 2005
New York City

Asian-Pacific benchmarks closed mixed with the Nikkei up 0.8% at 15,551,31, boosted by domestic capital-spending data. European stocks declined at mid-day, dragged by mining and health care shares with the German DAX 30 leading decliners, down 0.2%. In corporate news, Boston Scientific bid $25 billion in cash and stock for Guidant. Liberty Media agreed to acquire Provide Commerce for $477 million in cash, or $33.75 a share.

U.S. MARKET AVERAGES

U.S. stock futures are pointing to a flat or slightly lower market opening as crude oil prices rose back above $60 a barrel, raising investors' concerns about spending before the holidays. Merger and acquisition news is also a significant market factor today.

Boston Scientific bid $25 billion in cash and stock for Guidant. Under the deal, Boston Scientific would buy each Guidant share for $36 in cash and $36 in stock, which is 14% over Johnson & Johnson’s offer of $22 billion. As a result Guidant's shares rose over 10%.

Liberty Media ((L)) agreed to acquire Provide Commerce ((PRVD)) for $477 million in cash. Under the deal, each Provide Commerce share will be exchanged for $33.75 in cash. The transaction is likely to close in the second quarter of 2006.

Sears Holdings ((SHLD)) offered to acquire the public minority stage in Sears Canada for C$16.86 per share, an 8.7% premium over Friday's closing price. The company already owns 53.8% and the total purchase price for the rest of the stake, which is 46.2%, would be about C$835.4 million.

In other corporate news, the world’s largest chip maker, Intel Corp ((INTC)) is planning to invest more than $1 billion in India to strengthen its operations in the country.

Ford Motor Co. ((F)) plans to close more than eight North American plants in order to revive faltering operations on the continent.

S&P 500 futures were down 1.10 points, slightly below their fair value. Dow Jones industrial average futures were down 8 points, and Nasdaq 100 futures were down 0.50 point.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished mixed with the Nikkei ending up 0.8% at 15,551,31, boosted by strong domestic capital-spending data which raised hopes for higher GDP and robust corporate results. Across the region, Taipei’s Weighted Index surged 1.9%, while Hong Kong’s Hang Seng fell 0.3%. The yen dropped 0.6% against the dollar.

European markets traded lower at mid-day, dragged by mining and healthcare shares, although losses were limited by gains in the oil and gas sector, as well as deal news with the U.K. Virgin Mobile in the spotlight. The German DAX 30 lost 0.2%, the French CAC 40 ended down 0.1%, and London’s FTSE 100 also fell 0.1%.

OIL, METALS, CURRENCIES

Crude oil prices jumped back to $60 a barrel on U.S. winter storm forecast. Light sweet crude for January delivery rose 73 cents to $60.05 a barrel in electronic trading on the Nymex. Heating oil gained 3 cents to $1.7990 a gallon, followed by gasoline, rising to $1.6210. Natural gas climbed 24 cents to $14.170 per 1,000 cubic feet. London Brent jumped 72 cents to $57.74.

European gold hovered near a 23-year high on inflation worries and strong interest in commodity investment. In London the precious metal was fixed at $505 per troy ounce, up from $503.50. In Zurich gold traded at $504.90, up from $502.05. In Hong Kong gold fell 30 cents to close at $506.25. Silver traded at $8.61, up from $8.53.

The U.S. dollar advanced against its major counterparts. The euro was quoted at $1.1700, down from $1.1714. The dollar bought 121.14 yen, up from 120.42. The British pound traded at $1.7308, down from $1.7340.