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S&P 500 Futures
U.S. Stocks Little Changed After Four-Week S&P 500 Rally
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May 20th, 2013
S&P 500 Futures - U.S. stocks were little changed, after the Standard & Poor’s 500 Index climbed for four straight weeks to an all-time high, as investors weighed corporate acquisitions.
Yahoo! Inc. rose 0.5 percent after agreeing to buy blogging network Tumblr Inc. for about $1.1 billion. Actavis Inc. rallied 3.1 percent as it reached a deal to acquire Warner Chilcott Plc. Websense Inc. jumped 29 after agreeing to be bought by private-equity firm Vista Equity Partners. Red Hat Inc. slipped 3.8 percent amid an analyst downgrade.
The S&P 500 (SPX) gained less than 0.1 percent to 1,668.17 at 10:15 a.m. in New York. The Dow Jones Industrial Average declined 10.09 points, or 0.1 percent, to 15,344.31. Trading in S&P 500 stocks was 16 percent below the 30-day average during this time of day.
“There is still some nervousness, particularly as we go into mid-year, when there is typically seasonal signs of weakness,” Margie Patel, a senior portfolio manager at Wells Capital Management in Boston who oversees about $1.5 billion, said in a telephone interview. “So if we have a correction, it’d be more or less some time around now and the summer. But the point is it’s going to be mild. It’s hard to be more than mild because the fundamentals are so good.”
The S&P 500 added 2.1 percent last week, closing at a record, as gauges of leading economic indicators and consumer sentiment beat estimates. The U.S. bull market has entered its fifth year, adding about $11.5 trillion in market value, according to data compiled by Bloomberg. The S&P 500 has surged 147 percent from a 12-year low in 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases from the Federal Reserve.
S&P 500 Futures: Dialing Back
Dallas Fed President Richard Fisher said in an interview on CNBC today that the odds favor dialing back purchases. He said he would have started tapering stimulus at the last Federal Open Market Committee meeting.
The most-indebted U.S. companies are rallying more than any time in almost four years compared with the rest of the stock market. S&P 500 companies with the lowest working capital, smallest earnings and highest debt ratios surged 27 percent this year, almost double the gains for businesses with the most cash and least borrowing, according to data compiled by Bloomberg and Goldman Sachs Group Inc.
Yahoo rose 0.5 percent to $26.65. The biggest U.S. Web portal is buying Tumblr as Chief Executive Officer Marissa Mayer seeks to lure users and advertisers with her priciest acquisition to date. Mayer, CEO since July, is betting that Tumblr will help transform Yahoo into a hip destination in the era of social networking as she challenges Google Inc. and Facebook Inc. in the $17.7 billion display ad market.
S&P 500 Futures: Actavis Deal
Actavis added 3.1 percent to $129.40 after saying it will buy Warner Chilcott for $8.5 billion in a stock transaction that enables the company to expand in women’s health and urology. The combined annual revenue of the companies will be about $11 billion, according to a joint statement. Warner Chilcott, the drugmaker that unsuccessfully pursued a sale last year, increased 2.3 percent to $19.65.
Websense jumped 29 percent to $24.75. The Internet-security company will be acquired by Vista Equity Partners in a deal valued at about $906 million. The company is trying to transition from its roots blocking inappropriate websites in the workplace into a provider of broader online-security services.
Pandora Media Inc. gained 1.2 percent to $16.25 as Barclays raised its recommendation on the biggest Internet radio provider to equal weight, similar to hold, from underweight.
“Pandora has made significant progress in improving its ability to monetize its growing mobile usage,” Barclays analyst Anthony DiClemente wrote in a report. We “see upside to current consensus revenue estimates,” he wrote.
Red Hat slipped 3.8 percent to $52.88, ending 12 days of consecutive gains. The largest seller of Linux operating-system software was cut to market perform, an equivalent of neutral, from outperform at BMO Capital Markets by equity analyst Karl Keirstead.
- Lu Wang and Inyoung Hwang in New York at Bloomberg.
See Also: S&P 500 News Blog, Dow Jones Industrial Average
December 31st, 2010
U.S. stocks swung between gains and losses, with the Standard & Poor’s 500 Index heading for its second straight annual advance and its best December since 1991.
Hewlett-Packard Co. and Microsoft Corp. fell at least 0.7 percent to lead losses in the Dow Jones Industrial Average. CVS Caremark Corp. gained 0.1 percent after the drugstore operator agreed to buy a unit of Universal American Financial Corp. Borders Group Inc. slumped 19 percent after suspending payments to some publishers. Alcoa Inc. rose 1.6 percent for the biggest gain in the Dow.
The S&P 500 fell less than 0.1 percent to 1,257.69 as of 11:21 a.m. in New York. The index has climbed 13 percent this year and 6.5 percent this month. The Dow slipped 1.66 points, or less than 0.1 percent, to 11,568.05 today, and is up 11 percent this year. The 2010 advance follows a 23 percent rise in the S&P 500 in 2009, making it the biggest two-year advance since the Internet-bubble rally of 1998 and 1999.
“This year has been like a long road trip. It wasn’t always pleasant while on the way, but it was good once we reached the destination,” said Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $340 billion. “Today we have skeleton crews at investment houses and trading shops so it’s likely going to be a very light day.”
Earnings, Fed Moves
The S&P 500 advanced 23 percent from its July low through yesterday as companies reported better-than-estimated earnings and the Federal Reserve pledged to buy up to an extra $600 billion in Treasuries to stimulate the economy. Its rally to a two-year high has pushed its valuation to 15.7 times reported profits, the most since June.
This year’s increase for the benchmark index for U.S. equities means the gauge has risen for seven of the past eight years. The index’s 86 percent surge from a 12-year low on March 9, 2009, is the biggest for a comparable time period since 1955, according to Howard Silverblatt, senior index analyst at S&P.
The S&P 500’s advance sent the gauge above 1,251.70 on Dec. 21 for the first time since Sept. 12, 2008, the last trading day before Lehman Brothers Holdings Inc. filed the world’s biggest bankruptcy and prompted a 46 percent drop for the benchmark gauge through March 2009. The December rally for the benchmark index comes after it lost 0.2 percent in November and posted a combined gain of 13 percent in September and October, the biggest increase during those months since 1998.
‘Optimistic’ on 2011
“I’m quite optimistic about the performance of equity markets in the year ahead,” said Andrew Popper, chief investment officer at SG Hambros Bank Ltd. in London. “We have the conditions in place for seeing this rally continuing. The economy is recovering at a global level.”
The benchmark gauge for American equities will rise 9.2 percent from yesterday’s close of 1,257.88 to 1,374 in 2011, bringing the increase since 2008 to 52 percent, according to the average of 11 strategists in a Bloomberg News survey.
Hewlett-Packard, the world’s largest computer maker, retreated 0.9 percent to $41.89 and Microsoft fell 0.7 percent to $27.67 as technology companies led declines in the S&P 500, dropping 0.4 percent as a group.
CVS Caremark gained 0.1 percent to $35.04. The drugstore operator said it will acquire the Medicare Part D business of Universal American Financial for about $1.25 billion. Universal American surged 37 percent to $20.
Clearwire Corp., a company creating a nationwide high-speed wireless network using WiMax technology, slumped 1.3 percent to $5.15 after it said Chairman Craig McCaw will step down today.
Borders slumped 19 percent to 93 cents. The bookstore chain has suspended payments to some publishers as refinancing talks continue, the Wall Street Journal reported, citing Publishers Marketplace.
Alcoa, the largest U.S. aluminum producer, rose 1.6 percent to $15.44.
Imax Corp. rallied 11 percent to $29.79. Sony Corp. may be preparing to bid more than $40 a share for the company that designs and makes giant-screen movie theaters, the Daily Mail reported, citing London traders. Walt Disney Co. may also be interested in bidding for Imax, the newspaper said.
- Nikolaj Gammeltoft in New York at Bloomberg.
