Bob Pisani is off; this post was written by CNBC producer Robert Hum.
U.S. stock futures and the US dollar both got a jolt following President Obama’s announcement that Osama Bin Laden has been killed by U.S. forces after years of heavy pursuit. Although the news initially gave a significant shot in the arm to futures and the dollar, both are well off their overnight highs. Although this development is a major victory for the U.S. and its allies in the war against terrorism, traders are reminded that Bin Laden’s death is largely symbolic and that al Qaeda will certainly press on in its war against the Western world.
Following the headlines, most of the European and Asian markets are up 0.5 percent to 1.5 percent today, although some major markets, including China, Hong Kong, and London are closed for a holiday.
Generating lots of buzz this morning is last (Sunday) night’s move in silver. In the wake of margin requirements rising last week, silver rapidly plunged as much as 12 percent within 11 minutes overnight. But the metal has since recovered some of its losses, with it now down “just” 7 percent in morning trade. The big iShares Silver ETF also falls 6 percent in early trade. Silver’s exponential rise in recent months has raised concerns that it has become a speculative trade. Traders caution that last night’s move came amid thin volume amid some of the market closures in Asia and Europe.
a) International Coal Group soars 31 percent for agreeing to be acquired by Arch Coal for $3.4 billion. International Coal shareholders will get $14.60 per share, a 32 percent premium from Friday’s close. The deal is expected to close this quarter, and the new company will be the 2nd largest coal company in the U.S. Other coal miners, including Patriot Coal are getting a boost on the news.
b) Tenet Healthcare falls 7 percent despite Community Health Systems raising its bid to $7.25/share for the hospital operator. The new offer is $1.75/share higher than the prior one, and is apparently Community’s “best and final” offer.
The Street is underwhelmed, given it’s only a 5 percent premium from Friday’s close. The offer also expires on May 9, it’s unlikely the offer will change Tenet’s opposition to the deal, especially amid increased tension between the two firms. Last month Tenet sued Community accusing it of improper hospital admissions.
c) Humana rises 1 percent after earnings were inline with preannounced results. The health care firm saw a strong 10 percent rise in revenue on stronger Medicare membership in the quarter. Like many of the other HMOs, Humana also benefited from lower medical costs. Q2 guidance of $2.00-$2.10 is above Street expectations of $1.89.
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