A late rally erased a down day for U.S. stocks, with a slate of fresh deal-making overcoming worries over global growth. Energy stocks helped lead the rebound, with crude oil also resuming its slow climb higher after pausing yesterday. Financial stocks also firmed just enough near the close to lift most of the major indices into the black.
Stocks drifted lower throughout most of the morning after new data showed gross domestic product in the the euro-zone fell 0.6% during the final three months of 2012, exceeding expectations for a 0.4% decline. In Japan, GDP shrank an annualized 0.4%, as exports fell and business-investment extended its slump.
Closer to home, the news was more positive with the Labor Department reporting first-time unemployment claims fell by 27,000 to 341,000 applicants during the week ended Feb. 9, besting the consensus call for 365,000 claims. The four-week average also continues to trend lower, coming in at 352,500 in the latest week, or about 10,000 below the month-ago.
A surge in mergers and acquisition activity also appears to bolster trader attitudes, with Berkshire Hathaway (BRK-A) and 3G Capital this morning announcing a $28 billion buyout of ketchup and baby food-maker Heinz (HNZ).
U.S. Airway (LCC) and American Airlines parent company AMR Corp. finalized their long-discussed merger, forming the world's largest airline. Once the $11 billion deal is completed, AMR debtholders will own about 72% of the combined company with LCC shareholders having the remaining 28%. The companies also intend to keep the American Airline name with US Airways CEO Doug Parker being named chief executive.
Meanwhile, Anheuser Busch InBev (BUD) today also moved to salvage its $20.1 bln takeover bid of Mexican brewer Grupo Modelo S.A.B. de C.V., offering to sell Modelo's Piedras Negras brewery to Constellation Brands (STZ) in addition to the company's previously announced deal for BUD's 50% stake in Crown Imports.
U.S. regulators sued last week to block BUD's proposed acquisition of Modelo, saying the deal would stifle competition and likely lead to rising prices in many American markets. The $2.9 transaction with STZ also includes perpetual rights to Corona and other Modelo brands in the U.S.
Commodities were mostly lower. Crude oil for March delivery rose 30 cents to settle at $97.31 per barrel. March natural gas tumbled 14 cents to $3.16 per 1 million BTU. In metals, April gold fell $9.60 to $1,635.50 per ounce while March silver slid 51 cents to $30.35 per ounce. March copper declined 0.5 cents to $3.74 per pound.
Here's Where The Markets Stood At Day's End
- Dow Jones Industrial Average down 9.52 (-0.07%) to 13,973.39
- S&P 500 up 1.05 (+0.07%) to 1,521.38
- Nasdaq Composite Index up 1.78 (+0.06%) to 3,198.66
- Hang Seng Index up 0.85%
- Shanghai China Composite Index up 0.57%
- FTSE 100 Index down 0.51%
- (+) STZ, Buying Modelo's Piedras Negras brewery from Anheuser-Busch InBev (BUD) in addition to prior bid to buy BUD's 50% stake in Crown Imports. The $2.9 bln deal, intended to salvage BUD's $20.1 bln akeover of Grupo Modelo, also includes perpetual rights to Corona and other Modelo brands in the U.S.
- (+) ART, Q4 per-share profit of $0.02 beats by $0.03; revenue falls 59.9% year over year to $20.8 mln, trailing analyst estimates by $2.12 million.
- (+) ANGI, Reports $0.04 per share Q4 profit, reversing $0.14 net loss last year and beating analyst estimates by $0.06. Revenue rises 68.6% to $46.2 million, also topping estimates by $200,000. Raymond James upgrades the stock to Strong Buy from Outperform, citing improving operating leverage.
- (+) HNZ, Agrees to $28-bln going-private transaction with Berkshire Hathaway (BRK-A) and 3G Capital. After the deal is announced, Deutsche Bank cuts rating to Hold from Buy but raises price target by $9.50 to $72.50 - the same buyout price shareholders will receive.
- (+) VCLK, Non-GAAP earnings of $0.56 per share beats by $0.04. Revenue climbs 14% to $199.6 mln, or $1.4 mln better than analysts were expecting. Projects Q1 adjusted EPS of $0.39 to $0.41 and between $165 mln to $168 mln in revenue. Street is at $0.39 on $165.3 million in sales.
- (+) ANR, Narrows adjusted Q4 net loss to $0.19, beating the Thomson Reuters consensus by $0.36.
- (-) NSPH, Sees FY13 sales of $13 million to $15 million, well under analyst expectations looking for $20.09 million in sales this year. Also said it is evaluating debt facilities to better manage Working capital needs.
- (-) END, Suspends drilling at a North Sea well damaged by a severe storm. Company says it is exploring a potential sale, citing "dislocation" between its share price and the underlying value of its assets. Also, SunTrust Robinson Humphrey drops stocks to Neutral from Buy.
- (-) CTL, Cuts dividend by 26% to $0.54 per share, prompting at least five analysts to downgrade the stock today.
- (-) WTW, Forecasts FY13 EPS below Wall Street expectations, saying its marketing strategy has not been effective in an increasingly competitive environment. Sees per-share earnings of $3.50 to $4.00, trailing the Street view by at least $0.76.
- (-) STMP, Guides FY13 EPS, sales below the Street view. Sees sales this year of $120 million to $130 million with non-GAAP earnings of $1.75 to $1.95 a share, down from its prior view of a $1.96 a share gain and sales of $132.5 million. The Street is at $1.96 a share and $132.51 million in sales.
- (-) WFM, Grocery chain narrows its same-store sales outlook and guided FY13 EPS below the Street view.
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