U.S. MARKET AVERAGES
U.S. stock market opened higher n accordance with expectations. The sentiment was boosted by merger-and-acquisition activity from Swiss drug maker Novartis, Sacks Inc., and semiconductor maker PMC-Sierra Inc and upbeat data on consumer income and spending for September The Commerce Department reported that personal income surged up by 1.7% in September , while personal spending rose by 0.5%.
Of the three maijor averages, The Nasdaq is in the lead, advancing 0.8%, followed by the Dow, up 0.5%.
In the day''s biggest deals,
Barrick Gold (
ABX: chart) offered to acquire
Placer Dome (
PDG: chart) for $9.2 billion.
Novartis (
NVS: chart) ahs agreed to acquire all the remaining public shares of
Chiron it does not own, offering $45 per share in cash, or a total of $5.1 billion.
Saks Inc. (
SKS: chart) is expected to announce the sale of its northern department-store group for $1.1 billion to
Bon-Ton Stores (
BONT: chart).
Semiconductors maker
PMC-Sierra Inc. (
PMCS: chart) has agreed to buy
Agilent Technologies Inc.''s] (
A: chart) storage semiconductor business for $425 million in cash.
The airline space is moving higher in the early going The sector is now above its recent range, reaching its highest level since mid-September.
Energy stocks are climbing in the early going as well, helped by earnings from Valero Energy (
VLO: chart). The retail sector is also strong, boosted by new monthly sales guidance from
Wal-Mart (
WMT: chart).
MOVERS AND SHAKERS
Barrick Gold Corp. (
ABX: chart) uncovered today an offer for the Canadian gold miner
Placer Dome Inc. (
PDG: chart). Barrick said it will pay up to $1.2 billion in cash and issue up to 303 million shares for Placer Dome at $20.50 a share. This buyout price represents a premium of about 24%. Placer Dome stock soared more than 20%, while Barrick Gold stock lost 1.3%.
Swiss drug maker
Novartis AG (
NVS: chart) increased its offer for biotech company
Chiron Corp. (
CHIR: chart) from $4.5 billion to $5.1 billion, winning the support of Chiron''s board. Chiron stock jumped 2.3%.
ECONOMIC NEWS
The Department of Commerce released its report on
personal income and spending in the month of September on Monday, showing an increase in income that exceeded economist estimates while spending growth came in line with expectations.
The report showed that personal income surged up by 1.7 percent in September following a downwardly revised 0.9 percent drop in August. Economists had expected income to increase by 0.3 percent compared to the 0.1 percent drop originally reported for August.
The increase in income reflected an influx of insurance payments stemming from the damage caused by Hurricanes Katrina and Rita. Additionally, the decline in rental income that contributed to the decrease in August slowed significantly.
The Commerce Dept. also said that personal spending rose by 0.5 percent in September, rebounding after falling by 0.5 percent in August. The personal spending growth came in line with economist estimates.
The report also showed that the consumer spending price index rose 0.2 percent in September after edging up 0.1 percent in each of the three previous months. Price growth remained at an annual rate of 2.0 percent, the upper end of the Federal Reserve''s comfort zone
INTERNATIONAL MARKET NEWS
Asian-Pacific benchmarks registered solid gains Monday on strong Friday close of U.S. equity markets, boosted by GDP growth, and ahead of an interest-rate increase from the U.S. Fed Reserve. The Nikkei surged 2% on domestic earnings and export-related issues. Other regional markets rising above 1% were Australia’s All Ordinaries, up 1.7%, followed by South Korea’s Kospi, up 1.5%, and Hong Kong’s Hang Seng, up 1.2%.
