Market Updates

AT&T Lifts Premarket Sentiment

Elena
06 Mar, 2006
New York City

    Stock futures indicated a positive start of Monday session, following the lackluster trading at the end of last week. A number of merger deals, led by AT&T acquisition of BellSouth Corp. for $67 billion, lifted sentiment. Other telecommunications stocks are expected to rise on speculations of further consolidation in the sector. Research in Motion is expected to open 10% higher on the settlement of a prolonged patent fight.

9:00 AM ET - U.S. MARKET AVERAGES

U.S stocks futures pointed to a higher opening, supported by a series of merger deals including AT&T Inc.''s announcement of a $67 billion purchase of BellSouth Corp. which helped lift market sentiment after the lackluster trading of late last week.

Over the weekend, AT&T ((T)), long-distance telephone company, agreed to acquire BellSouth ((BLS)), the No. 3 U.S. regional phone company, for $67 billion. Under the agreement, each common share of BellSouth will be exchanged for 1.325 shares of AT&T common stock. Once the acquisition of BellSouth is completed, AT&T will gain total control of Cingular Wireless, the largest mobile phone company in the U.S. Currently, AT&T holds a 60% stake in Cingular, while BellSouth has the remaining 40% stake.

In other corporate news, General Electric's ((GE)) entertainment division, NBC Universal, agreed to acquire iVillage, an online destination aimed at women for $8.50 per share in cash. The purchase price equates to about $600 million. The deal is expected to close in the second quarter, pending shareholder and regulatory approvals.

Research In Motion Ltd ((RIMM)), the maker of the popular BlackBerry portable e-mail devices, is expected to rise 10% after the company announced the settlement of a prolonged patent fight.

Education Management Corp. ((EDMC)) agreed to be acquired for $3.4 billion by Providence Equity Partners and the investment arm of Goldman Sachs.

Standard & Poor 500 stock index futures rose 2.4 points, or above fair value. Futures on the Dow average were up 16 points and Nasdaq futures gained 6 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks closed mostly higher. The Nikkei surged 1.5% to 15901.16, boosted by upbeat data showing 9.5% rise in capital spending. Across the region, South Korea’s Kospi climbed 1.2%, Singapore Straits Times rose 0.8% to reach a new six-year high, while Shanghai Composite lost 0.4%. Hong Kong’s Hang Seng traded flat ahead of global bank HSBC earnings release.

European stocks advanced significantly at mid-day, lifted by telecom-consolidation news. The Linde-BOC Group deal also provided support. The German DAX 30 rose 0.7%, the French CAC 40 climbed 00.9%, and London’s FTSE 100 hit a fresh four-year high rising 0.9% to 5910.

OIL, METALS, CURRENCIES

Crude oil prices retreated ahead of two important meetings in Vienna- one on Iran’s nuclear program and the other one on OPEC output levels. Light sweet crude April delivery declined 25 cents to $63.42 a barrel. London Brent for April delivery lost 36 cents to $63.82 a barrel.

European gold prices lost ground. In London gold declined to $568 bid per troy ounce, down from $568.60. In Zurich the precious metal fell to $567.40 from $568.30. In Hong Kong gold fell $1 to $567.80. Silver opened at $10.10, up from $10.20.

The U.S. dollar traded mixed against other major currencies. The euro traded at $1.2036, down from $1.2037. The dollar bought 117.23 yen, up from 116.34. The British pound was quoted at $1.7553, up from $1.7500.

EARNINGS NEWS

Lexar Media Inc., ((LEXR)), electronic memory card manufacturer, expects to report a Q4 net loss in the range of 25 cents to 28 cents a share. Lexar added that it expects revenue for Q4 to be in the range of $237 million to $240 million. The company announced it has pushed its results back to March 14 to complete its accounting analysis of inventory and other reserves.

Bedford Property Investors Inc, ((BED)), real estate investment trust, reported Q4 net income of $1.23 share, down from $4.31 a share in the year-earlier period. The company added that funds from operations were 40 cents a share, up from 33 cents a share, beating analysts’ forecast of 38 cents a share in funds from operations.

Bayer AG, ((BAY)), drugmaker, reported that its Q4 profit dropped 33% after it set aside 275 million euros ($330.5 million) to settle claims that it colluded on prices of rubber and plastic in the U.S. The company earned 46 million euros ($55.3 million) in Q4 down from 68 million euros a year ago. Revenue advanced 16 % to 7.1 billion euros ($8.5 billion) from 6.11 billion euros.

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