2:30PM NY, 8:30 PM Frankfurt – European markets closed higher on takeover news and falling dollar.

European markets closed higher across the region led by 0.6% gain in Spain followed by 0.4% rise in Switzerland, and 0.2% increase in Germany, Italy and the Netherlands. The U.K. lost 0.3%.

In Frankfurt trading Commerzbank gained 1% after the company offered to buy minority shareholders of Eurohypo AG for 24.3 euro. The bank said the offer is adequate but shareholders held out for more payment. Bayer jumped 1.4% to 57.15 euros on recommendation from J P Morgan with a revised price target to 70 euros from 63 euros. Volkswagen gained 0.5% to 123.40 euros. The company regional head in China said that the sales in the country are likely to exceed 12% growth target this year. Demag Cranes lost 7% in addition to the 23% in Friday’s trading. The company lowered its earnings forecast prompting broker UniCredit Markets to lower its rating and price target to 43 euros. The stock closed at 36.90 euros.

In London trading FTSE closed 0.28% lower to 6,697 on lower mining stocks. Lonmin, largest platinum producer, lost 7% on the news that it expects 14% lower production this year. The company now expects sales between 820,000 and 840,000 ounces and expects higher operating costs. BHP Billiton dropped 1.2% on falling copper prices in New York trading. Vodafone fell 0.8% after gaining as much as 1.5% and denied that it is considering to purchase Verizon in the U.S. Barclays rose1.2% after the rival group controlled by RBS raised its cash portion of the offer for ABN Amro to 91% from 79%. RBS bid exceeds 11% the bid from Barclays all stock offer. Rolls-Royce fell 1.6% to 560 pence after ABN Amro lowered its rating on the company to ‘hold’ from ‘buy.’

11:00AM NY – Trading sentiment ahead of earnings releases remain positive. Construction industry equipment stocks jump in the morning trading in New York.

Spartech Corp (SHE: chart), building material maker, said that its chief executive has resigned and lowered its earnings guidance for the year. The company now expects to earn between $1.45 and $1.50 per share from previous guidance of $1.55 and $1.62 per share. The company blamed the shortfall to tough market in transportation and residential construction industries. The company also plans to take a charge of 4 cents stemming from the executive resignation. The stock fell 17% to $22.60.

J.M. Smucker (SJM)), maker of jams, peanut butter and other food products, fell 4.2% to $60.82 on no news. The stock trading near 52-week high has risen nearly 25% in the year.

IHOP Corporation (IHP: chart) jumped 10% on the takeover agreement to purchase Applebee’s for $2.1 billion. The stock jumped $5.60 to $61.86 after WSJ.com reported the news.

Positive outlook on construction industry equipment companies lifted shares of Terex (TEX: chart), Manitowoc (MTW: chart), Joy Global (JOYG: chart), Caterpillar (CAT: chart), and Deer & Company (DE: chart). Terex jumped 4.5%, Caterpillar and Joy Global gained more than 1% and Deer edged a fraction up.


10:00AM NY – After thirty minutes of trading, NY awaits earnings results for the second quarter.

In the first thirty minutes of trading in New York, market averages moved higher on second quarter earnings expectations and traditional summer rally. The first week of heavy earnings season weighed heavily on investors with a number of banks expected to release earnings. Weakness in dollar against euro and yen continued with euro reaching intra-day high near $1.38.

Applebee’s International, activist investor focus, has agreed to be acquired by IHOP, for $2.1 billion or $25.50 per share, according to a report by WSJ.com. The company has struggled in the last several years with same store sales declining and losing sales in core demographics.

McDonald’s reported June same store sales rise of 8.4% and said that one-time charge related to licensing in Latin America and Caribbean will result in a second quarter loss of 60 cents.

Royal Bank of Scotland has raised its cash portion of its $98 billion offer for ABN Amro Bank. Vodafone, UK based telecom operator, denied reports that it is considering to buy the mobile service operator Verizon.

Ford is mulling the idea of selling its Volvo division to raise funds to pay for losses in its domestic division.

Korean steelmaker, POSCO (PKX: chart), reported better than expected earnings and revised it earnings outlook for the year.


9:30AM London is lower at mid-day as Lonmin leads mining stocks lower.

In London, the benchmark FTSE 100 Index lost 19.10, or 0.3%, to 6,697.60 at mid-day.