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.