U.S. AVERAGES
The morning trading hour is overshadowed by several merger talks. Whirlpool has raised its offer price for Maytag, Cisco is rumored to acquire Nokia, which Nokia has declined, Yahoo is in talks to acquire Hong Kong based Alibaba.com, E*Trade acquires Harris direct and Quest Diagnostics to acquire LabOne.
Whirlpool has raised its price for Maytag to equivalent of $20 per share valuing the current offer at $2.6 billion. The current offer includes $1.6 billion in cash and stock and assume $975 million of debt.
Yahoo to increase its listing business and the presence in China is in talks to acquire 35% of Alibaba.com for $1 billion.
E*Trade has acquired Harris Direct for $700 million in a fast consolidating on-line brokerage industry.
Quest Diagnostics is in talks with LabOne for $934 million. The medical tester plans to enter risk assessment business for life insurance market with the help of this acquisition. The company expressed confidence that FTC will approve the merger and profit will accelerate in the in the coming years.
The U.K. newspaper report of talks between and Cisco and Nokia has been rejected by Nokia as ‘complete fabrication’. Nokia stock is trading higher by 1.5%.
Oil hit another record high Monday on concerns that the United States may face a gasoline shortage and rising tensions in the Middle East.
The stock market in the coming week will focus its attention on earnings and Fed’s treasury auction and Governors’ meeting on Wednesday.
The U.S. budgetary shortfall of at least $57 billion in July is expected to be met with 5 and 10 year government bonds. The nature and level of participation from central banks around the world will be closely watched by the market.
The market after a two week rally and trading close to 4-year highs appears to be in the mood to take profit. The rise in employment wages, dollar and commodities prices such as oil and copper has stoked fears of inflation.
Several tech stocks are scheduled to release earnings this week. Dell, Cisco, Analog Devices and Nvidia are few tech leaders to release earnings. Other companies to release earnings include Disney, Delphi, Visteon, Federated Department Stores, Target, Kohl’s and DreamWorks Animation.
INTERNATIONAL MARKET NEWS
Asian-Pacific markets closed mixed with the Nikkei down 1% in morning trading ahead of parliamentary vote on privatization of Japan’s postal system, but as the reform proposal was rejected, the index rebounded and ended up 0.11%. Among the gainers in the regional markets, Australia’s All Ordinaries climbed 0.7%, China’s Shanghai Composite rose 0.9%. Averages in Taiwan and South Korea declined 1% and 0.3% respectively. The dollar was recently trading at 111.91 yen.
European stocks advanced at mid-day trading, boosted by soaring crude-oil prices and telecom equipment maker deal talk involving Nokia and Marconi. The German DAX 30 climbed 0.7%, the French CAC 40 added 0.8%, and the U.K.’s FTSE 100 rose 0.5%.
ENERGY, METALS AND CURRENCIES MARKETS
Crude-oil futures hit a new record peak of nearly $63 a barrel on fuel supplies concerns and Middle East tensions. Light sweet crude for September delivery gained 46 cents to trade at $62.77 a barrel. London Brent advanced 51 cents to reach $61.58.
Gold futures declined together with falling U.S. dollar. In London gold was fixed at recommended price of $436.85 per troy ounce, down from $437.00. In Hong Kong gold lost $1 to close at $437.05 per ounce. Silver opened at $7.10 per ounce, lower from $7.13.
The U.S. dollar eased against other major currencies on expectations that the Fed Reserve will raise interest-rate to 3.5%. The dollar slipped 0.2% against the euro to trade at $1.2374. The greenback bought 111.65 yen, down 0.3%.
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