Stocks declined Thursday, with the Dow dropping below the key 12000 mark, but were cushioned by AIG's advance.
We are smack in the middle of earnings warnings season, and it has not been a pleasant experience. Yesterday, after several companies warned, we saw an expansion of new lows at the NYSE. Most large financials, most pharmaceuticals, airlines, and most autos are at or near multiyear lows.
Chemicals company Huntsman said Tuesday it swung to a loss in the second quarter due to a loss from discontinued operations and higher feedstock and energy costs.
The chemicals sector is enjoying a bull run, but there’s some M&A action to be had as well. Cramer says the next most likely target is Nova Chemicals.
The Dow and S&P catapulted to new highs following strong retail sales data and a major corporate acquisition. "We started out with better than expected retail numbers and it just went from there," said John Massey, portfolio manager with AIG SunAmerica. "M&A deals came through better than expected and people put a lot of the concerns behind them."
Chemicals maker Huntsman agreed to a $6.5 billion buyout offer from an affiliate of Apollo Management on Thursday, terminating an earlier deal to sell itself at a lower price to a Dutch company.
Apollo Management raised its offer for chemical company Huntsman by 2.8% to $6.5 billion Monday, widening the premium over rival suitor Basell.
U.S. chemical company Huntsman said Friday the $6 billion buyout offer from Apollo Management's Hexion Specialty Chemicals is superior to the previously accepted deal offered by Basell.
Stocks closed mixed as investors were encouraged by a strong batch of merger news but gains were held in check by rising interest rates. "The key for the market right now is the ability to digest the fact that the 10-year has moved out of that range that we've enjoyed between 4.5% and 5%," said Russ Koesterich, head of investment strategy at Barclays Global Investors.
A bounce back in takeover activity, including Blackstone's bold $26 billion bid for Hilton, is giving strength to stock futures ahead of the opening on the second leg of this holiday-shortened week.
U.S. private equity firm Apollo Management unveiled a $6 billion bid proposal for Huntsman on Wednesday, 8% higher than a deal accepted by the U.S. chemical company last week.
European stock markets were slightly higher Wednesday, following a lackluster session in Asia.
Stocks finished lower in a choppy session that was overshadowed by concerns about the housing slowdown and a meltdown in the subprime mortgage industry. "The financials tend to lead the market down and that's what they were doing today," said Robert Albertson, chief strategist at Sandler O'Neill. "I think it goes well beyond subprime. "
Chemicals maker Basell said Tuesday it has agreed to buy U.S. chemical company Huntsman for $5.6 billion excluding debt, in a bid to strengthen its position as a global chemicals group.