Capital One to Buy North Fork for $14.6 B

Elena
13 Mar, 2006
New York City

Stock futures pointed to a higher opening, supported by mergers-and-acquisition activity. Capital One Financial, credit card issuer, announced an agreement to acquire North Fork Bancorp in a cash and stock deal for $14.6 billion, with about $5.2 billion of the amount to be paid in cash. McClatchy Co. agreed to acquire its larger rival, newspaper publisher Knight-Ridder Inc. in cash and stock for $4.5 billion before debt.

9:00AM – Stock futures pointed to a higher start, supported by bid activity.
U.S. stock futures were sitting above the flat level, indicating a higher start. Standard & Poor's 500 futures were up 2.4 points, above fair value. Dow Jones industrial average futures were 25 points, and Nasdaq 100 futures were up 6.5 points. The upbeat pre-market sentiment was largely contributed by merger-and-acquisition activity, considered a bullish sign for stocks. As no major economic reports are due out today and only a few earnings releases are expected, bid activity will be in the spotlight. Credit card issuer Capital One Financial Corp. ((COF)) agreed to buy North Fork Bancorp Inc. ((NFB)) for $14.6 billion in cash and stock. North Fork shares rose 21%. McClatchy Co. ((MNI)) agreed to acquire its larger rival, newspaper publisher Knight-Ridder Inc. ((KRI)) in cash and stock for $4.5 billion before debt. In Europe, the Nasdaq bid $4.1 billion for London Stock Exchange.

Crude oil prices eased back on expectations of sufficient oil supplies. Light sweet crude April delivery lost 13 cents to $59.83 a barrel. London Brent for April delivery added 6 cents to $60.89 a barrel. European gold prices gained advanced Monday morning. In London gold rose to $545.25 bid per troy ounce, up from $535 late Friday. In Zurich the precious metal advanced to $544.80 from $539.30. In Hong Kong gold fell $2.60 to $543.50. Silver opened at $10, up from $9.92. The U.S. dollar traded lower against other major currencies. The euro traded at $1.1925, up from $1.1911. The dollar bought 118.88 yen, down from 118.99. The British pound was quoted at $1.7264, up from $1.7263.


8:30 AM A couple of companies reported decline in profit on charges.
Westar Energy Inc., ((WR)), electric utility, reported that Q4 profit totaled 8 cents per share, down 92% from $1.03 per basic share, a year ago, as the company recorded a large charge against year-ago results that benefited from a gain. Q4 incorporated a 49 cent per share charge to reverse gains connected with fuel supply contracts for its generating units. Q4 last year was lifted by a gain of 84 cents per share from discontinued operations. If not for some items, the company earned 3 cents per basic share. Sales rose 15%, helped by cooler weather and higher wholesale power prices.

Computer Horizons Corp, ((CHRZ)), computer services company, reported that Q4 net loss grew to $39.5 million, or $1.24 a share, from $24.3 million due to a 2.7% decline in. Q4 loss incorporated special charges of $36.6 million connected with restructuring and losses on the sale of investments. The company added that it is set to report modest profitability in Q1 of 2006 in the wake of its restructure.


8:00AM Asian markets gained across the region. New Zealand reached a record high.
Asian-Pacific benchmarks ended higher Monday, boosted by a strong Friday rally on Wall Street and stronger dollar with technology and industrial shares in focus. The Nikkei led gainers, rising 1.5% to 16,361.51 on improved confidence in the economic recovery, despite GDP data showing slightly disappointing figures. Nissan Motor, Toyota Motor and Nomura Holdings stood out among advancers. South Korean Kospi surged to 1.4%, supported by strong automobile and bank stocks. Shanghai Composite rose 1.1% on property stocks and gains in cement companies. Australian All Ordinaries soared 1.3%, lifted by corporate data and strength in overseas markets. Hong Kong’s Hang Seng rose 0.6%, although concerns over interest-rate hikes weighed. Stocks in New Zealand hit a record high of 0.8% to 3516.99.

European markets advanced at mid-day dealings as merger-and-acquisition news and speculations sent stocks higher. The German DAX 30 climbed 0.7%, boosted by drug maker Schering which rocketed 23% on a takeover bid by a rival company Merck. The French CAC 40 gained 0.4%, while London’s FTSE 100 rose 0.5%, supported by 22% gain in London Stock Exchange on speculations that U.S. exchanges may start a bidding war for it.