Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:50 AM ET
S&P 500: -7.50; 1,490.00
NASDAQ 100: -7.50; 2,017.50
Dow: -49; 13,502
NIKKEI 225: 16,127.42 [09/14]
HANG SENG: -1.20%; 24,599.34 (-298.77)
SHANGHAI SE COMPOSITE: +2.06%; 5,421.39 (+109.21)
BSE SENSEX 30: -0.64%; 15,504.43 (-99.37)
FTSE 100: -1.58%; 6,189.90 (-99.40)
CAC 40: -1.55%; 5,452.86 (-86.06)
XETRA-DAX: -0.31%; 7,474.58 (-23.16)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.88%; $78.40 (-$0.70)
Gold: +0.33%; $720.20 (+$2.40)
Natural Gas: +1.78%; $6.39 (+$0.11)
Silver: +0.39%; $12.755 (+$0.05)
U.S. Breaking Newssee today's Wall Street Breakfast for earlier news
ITT to Acquire EDO in $1.7B Deal
ITT Corp. has agreed to pay $56 per share for EDO Corp., a defense technology and engineering company, representing an 8.7% premium over its Friday close of $51.51. Including ITT's assumption of $120M of EDO debt, the deal is valued at $1.7 billion. The deal is subject to EDO shareholder approval and is expected to close early in 2008. It will be neutral to ITT's earnings next year and accretive from 2009. "This transaction combines ITT's and EDO's technology prowess, customer relationships, and proven operational capabilities to scale mission-critical military programs and create new markets for our technologies," commented ITT defense unit president Steve Gaffney. Lazard and UBS advised ITT and Citigroup advised EDO. Shares of EDO were trading up to $53.65 as of 8:15 A.M. in thin pre-market activity; ITT was untraded.
Sources: Press release, Bloomberg, MarketWatch
Commentary: ITT Scores Surprise FAA Contract Win • ITT to Buy International Motion Control for $395M • Water: How to Quench Your Investor Thirst
Stocks/ETFs to watch: ITT, EDO. Competitors: LMT, RTN
Nokia Buys Cellphone Ad Firm Enpocket
Nokia said Monday it will buy U.S. cellphone-screen ad firm Enpocket, a move that will enhance its ability to place cellphone advertisements through text messages and e-mail. Enpocket's platform delivers mobile ads through SMS, multimedia messaging service [MMS], mobile internet advertising, and video. "This is a very interesting move. It gives a clear picture of the speed in which Nokia's new organization is expanding into software and services," eQ analyst Jari Honko told Reuters. The deal is expected to close in the fourth quarter; details were not disclosed. Boston-based Enpocket's clients include Vodafone, Pepsi, Telefonica, Sprint and MasterCard. "Nokia has already announced its intention to be a leading company in consumer Internet services, and we believe that mobile advertising will be an important element in monetizing those services for our customers and partners," Nokia Chief Technology Officer Tero Ojanpera said. "This acquisition is a game changing move to bring the reach and depth of Nokia to organize the market across the world, and make it easier for an ecosystem to develop." Strategy Analytics, a notoriously cautious forecaster, predicts the global mobile ad market will hit $574 million this year. Yahoo and Google are also clamoring for a share in the growing market. Last month Nokia unveiled its multimedia user interface Ovi, which combines a new digital music store and a gaming service. Nokia shares gained 2.1% in Helsinki trading Monday.
Sources: Press release, Reuters, Bloomberg, MarketWatch
Commentary: AOL Buys Third Screen Media, Gains 'Very Strong Position In Mobile Advertising • Microsoft to Acquire Mobile Ad Group ScreenTonic • Yahoo to Offer Cellphone Web-Ad Network
Stocks/ETFs to watch: NOK, GOOG, YHOO
Cognizant Authorizes Two-for-One Split, Stock Repurchase
Outsourcing services company Cognizant Technology Solutions declared a "two-for-one stock split on its capital stock in the form of a stock dividend" to all shareholders as of October 1. The share distribution will occur "on or about" October 16. The company's board also authorized a $100 million stock repurchase to be carried out over the next 12-month period. Cognizant's shares are up less than a percent over the recent 12-month period, trading in a range of $95.55-$67.60. The company has more than $750 million in cash and short-term investments on its balance sheet. Share were nearly 2% higher in pre-market trading as of 8:15 a.m. ET on the news.
Sources: Press Release, MarketWatch, Reuters
Commentary: Cowen Sees A Buying Opportunity in Cognizant • Cognizant Technology Solutions: The Upside to Slowed Growth • How Much Longer Will Indian Outsourcers Offer Cost Advantages?
Stocks/ETFs to watch: CTSH. Competitors: INFY, WIT, SAY
Earnings call transcript: Cognizant Technology Solutions Q2 2007
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.
Today's Market (via Sam Collins, ChangeWave.com)
Just prior to Friday's opening, things looked pretty grim with the subprime issue raising its head again. It came in the form of a bailout for another institution by the Bank of England and a report of lower-than-expected August retail sales figures.
Within ten minutes of the opening bell, the Dow was off 80 points with sellers clearly in charge. But the monthly survey of consumer sentiment by Reuters/University of Michigan was unexpectedly strong and with that the market began to turn up.
Friday capped off a good week for the stock market (in fact the best since April) with the Dow Industrials up 2.5% for the week, the S&P 500 up 2.1%, and the Nasdaq up 1.4%.
On Friday, the Dow Industrials gained 18 to close at 13,443. The S&P 500 was slightly ahead at 1,484, and the Nasdaq gained over a point at 2,602. The NYSE again traded 1.2 billion shares and the Nasdaq fell to 1.6 billion. Breadth was negative on the New York by 9-to-7 but positive on the Nasdaq by 4-to-3.
Crude oil (October contract) fell by 99 cents closing at $79.10 a barrel, and the Amex Energy SPDR (XLE) gained 8 cents to close at $72.50. Gold (December contract) lost 10 cents and closed at $717.80, and the Philadelphia Gold/Silver Index [XAU] closed at $158 up 44 cents.
With consumers still confident, but retail sales down just a bit and unemployment slightly higher, it is expected that on Tuesday the Fed will announce at least a 25-basis-point cut in rates and maybe even as much as a 50-point cut.
What the Markets Are Saying
Despite heading into zones of heavy resistance, stocks had their best week in months, even in the face of some sobering economic pressures.
The subprime mess, though not in the foreground, is still with us. Further, oil hit over $80 for the first time, the real estate markets are in a shambles, and the U.S. dollar hit a new low last week. So, relative to the overall news, the market is behaving very well -- in fact, I give it an A+.
Sentiment is still positive, i.e., the insiders are still buying while letter writers are negative, and longer term that's good.
Only the public as measured by the AAII numbers has cast a short-term cloud on trading: Last week, individual investors went bullish by 40% versus 35% bearish -- the first reversal there for many weeks. The public's numbers may be telling us that the inverse head-and-shoulders patterns on the major indices will now run into some short-term difficulty but with the other indicators positive it is likely that after a brief respite the advance will continue.
Today's Trading Landscape
Today earnings will be reported by Adobe Systems (ADBE), Napco Security Systems (NSSC) and Omnova (OMN). The Empire State Index will be reported prior to the opening (the consensus expects 20.0).
A European Union court handed Microsoft (MSFT) a stunning defeat as it rejected its appeal of an anti-trust decision that could cost Mr. Softy 497 million euros. Alan Greenspan said in London this weekend that U.K. housing markets are due for a "painful correction." Our markets are indicating that stocks will open lower.
Asian Headlines (via Bloomberg.com)
• Asian Stocks Fall for First Time in Five Days; Samsung, BHP Billiton Drop Asian stocks dropped for the first time in five days after the U.S. Justice Department began investigating makers of flash-memory chips and falling crude prices drove down oil producers.
• Oil Search Shares Surge on Report of Possible $5 Billion Bid From China Oil Search Ltd., the biggest holder of natural gas resources in Papua New Guinea, rose the most in five years after the South China Morning Post said the company may be a takeover target for China National Petroleum Corp.
• Soho China May Raise $1.65 Billion in Revived Initial Offering, People Say Soho China Ltd., the largest developer in Beijing's central business district, plans to raise as much as HK$12.9 billion ($1.65 billion) in an initial share sale, two people with direct knowledge of the deal said.
• Blackstone, GE, Wilbur Ross Among 10 Groups That May Bid for India's IFCI Blackstone Group LP (BX), manager of the world's biggest buyout fund, General Electric Capital Corp. (GE) and a group led by billionaire Wilbur Ross are among investors that may bid for 26 percent of India's oldest project financier IFCI Ltd.
• Asian Currencies Fall; Market Turmoil Prompts Funds to Sell Riskier Assets Asian currencies fell, reversing earlier gains, on concern investors are exiting riskier assets on signs the turmoil in global credit markets is worsening.
European Headlines (via Bloomberg.com)
• King Faces `Crisis of Confidence' on Bank of England Credit-Tumult Stance Bank of England Governor Mervyn King has spent the past month trying to stay above the fray as the U.S. subprime-mortgage collapse roiled credit markets. Now he's getting dragged in, whether he likes it or not.
• CRH May Buy $4.5 Billion of Assets From Cemex, Including U.S. Operations CRH Plc (CRH), the world's second-biggest maker of building materials, may buy Cemex SAB's (CX) U.S. concrete plants, pipe-making unit and cement division for as much as $4.5 billion, its biggest-ever acquisition.
• Saudi Arabia Agrees to Pay U.K. $8.86 Billion for 72 Typhoon Eurofighters Saudi Arabia ordered 72 Eurofighter Typhoon warplanes from the U.K. at a cost of 4.43 billion pounds ($8.86 billion), the biggest export order ever for the aircraft.