4:12 PM, Aug 30, 2010 --
- NYSE down 99.5 (-1.5%) to 6,695.39
- DJIA down 141 (-1.4%) to 10,010
- S&P 500 down 16 (-1.5%) to 1,049
- Nasdaq down 33.7 (-1.6%) to 2,120
- Hang Seng up 0.68%
- Nikkei up 1.76%
- FTSE up 0.89%
(+) HPQ OKs $10 billion buyback.
(+) GENZ confirms receipt of Sanofi-Aventis off for $69 per share, rejects proposal.
(+) COGT sold to 3M (NYSE:MMM) for $10.50 per share.
(+) CSGS upgraded.
(-) INTC making smart phone acquisition, gets downgrade.
(-) PAR says HPQ's $30 per share offer superior to Dell's (NASDAQ:DELL).
(-) SPWRA turns lower; tapped for installations at government properties.
(-) CREE gets little traction from news it demonstrates high quality 150-mm silicon carbide substrates.
Stock averages end in the lower end of the day's range, with losses accelerating in the final minutes. Wall Street got little traction from relatively upbeat consumer spending data, preferring to take a cautious posture ahead of Friday's jobs report. October oil closed down 0.6% at $74.70 a barrel as futures traders largely marked time ahead of the late-week report and what investors hope will be another key clue on what's turned into a spotty economic recovery. Gold gained and copper hit a four-month high. The dollar traded mixed.
Government data early Monday showed that consumer spending rose 0.4% in July, while personal income rose 0.2%. Wall Street economists had expected a 0.3% increase in incomes and a 0.3% gain in spending, according to a MarketWatch survey. The personal consumption expenditure price index, a key inflation gauge tracked by the Federal Reserve in its monetary policy decisions, rose 0.2% in July compared with June and is up 1.5% in the past year.
In company news:
UAL (UAUA) is up after the Department of Justice said Friday that it has no more antitrust concerns about the deal that would combine United and Continental into the world's largest airline. The airlines now expect the deal to close by Oct. 1.
3PAR Inc. (NYSE:PAR) is down after its board of directors found Hewlett-Packard Co's (NYSE:HPQ) bid for the company to be a "superior proposal" to that of Dell Inc. (DELL). Last Friday, HP said it would raise its offer for the data storage company to $2 billion, or $30 a share, compared with Dell's $27 a share offer. The bidding war between the companies started Aug. 16, when Dell first said it would buy 3PAR for $18 a share, to which HP made a counter offer of $24 a share.
Cogent (COGT-OLD) jumped and 3M Co. declined after MMM announced it would buy the former for $943 million to expand its identification technology business that is needed for law enforcement. 3M will pay $10.50 per Cogent share, marking an 18% premium over the company's closing price Friday. The deal is expected to close in the fourth quarter, and 3M sees the transaction adding 9 to 10 cents a share to earnings, or 1 to 2 cents a share after adjustments.
Fossil Inc. (NASDAQ:FOSL) rose after it said it will repurchase up to $750 million of its stock through 2013, which accounts for 25% of the company's current market value. CFO Mike Kovar said that the wristwatch retailer had $435 million in cash at the end of the second quarter, while future cash flows are seen being able to fund the rest of the stock purchases as well as future investments to support the company's longer-term growth objectives.
Genzyme (GENZ) rose after it confirmed that it has received an unsolicited, non-binding proposal from Sanofi-Aventis (NYSE:SNY) to acquire all the outstanding shares of Genzyme for $69 per share in cash. The Genzyme board of directors met last night, and it unanimously affirmed its previous rejection of Sanofi's proposal.
Hewlett-Packard (HPQ) gained on news the technology giant approved an additional $10 billion buyback for share repurchases. The move helps to offset dilution from employee stock purchases, according to a Reuters report. HP will repurchases at least $3 billion in shares in the fiscal fourth quarter, the report said.
Lululemon Athletica (NASDAQ:LULU) dropped after it was downgraded to "underperform" from "hold" by Jefferies & Co. Analyst Taposh Bari also cut the yoga apparel retailer's price target to $30 from $38 per share. Bari said that Lululemon was accelerating inventory and boosting investments at a time when the U.S. retail environment still remained "choppy."
Novartis AG (NYSE:NVS) will reportedly begin final-stage testing of the experimental blood thinner elinogrenl because researchers found it worked quickly with patients who had surgery to unblock an artery, Bloomberg reported, citing Novartis partner Portola Pharmaceuticals.
Lions Gate Entertainment Corp (NYSE:LGF) is down even though its latest film "Last Exorcism" finished No. 1 at the box office this weekend, earning $21.3 million in ticket sales. Worries persist about the movie industry in general, however, particularly amid speculation that YouTube LLC is negotiating with major Hollywood studios to offer streamed, pay-per-view films by the end of this year.
According to the Financial Times, negotiations have been in the works for a few months, and the move would pit the online company directly against Netflix Inc (NASDAQ:NFLX) amongst others.
SunPower Corp. (SPWRA) announced that the company's solar technology was selected for installation at several U.S. government properties, including for the Department of Energy's National Renewable Energy Lab, the General Services Administration, the Navy and the Air Force.
Anheuser-Busch InBev (NYSE:BUD) shares could rise as the company boosts earnings with higher sales and reduced costs, Barron's reported.
Meanwhile, BP Plc's (NYSE:BP) internal investigation of the Deepwater Horizon rig disaster places some of the blame on the company for mistakes made as it finished the Gulf of Mexico oil well that gushed millions of barrels of oil into the sea, Bloomberg reported. Among the mistakes was misreading pressure data that indicated a blowout was imminent, the report said.