Stocks End Just Higher as Earnings Get Off to Mostly Positive Start

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Includes: AON, APA, AVP, BP, DIA, HEW, JNJ, MEND, QQQ, SPY, XOM
by: Midnight Trader

4:18 PM, Jul 12, 2010 --

  • NYSE up 14.23 (+0.2%) to 6,794.48
  • DJIA up 18 (+0.2%) to 10,216
  • S&P 500 up 0.8 (+0.07%) to 1,079
  • Nasdaq up 1.9 (+0.1%) to 2,198


GLOBAL SENTIMENT

  • Hang Seng up 0.44%
  • Nikkei down 0.39%
  • FTSE up 0.66%


UPSIDE MOVERS


(+) CCME raises outlook.

(+) YHOO upgraded.

(+) WY upgraded.

(+) SNDK upgraded.

(+) MON upgraded.

(+) MEND sold to J&J (NYSE:JNJ) for $23.40 per share.

(+) HEW sold to Aon (NYSE:AON) for $50 per share.

(+) PLA jumps as Hefner offers to take company private for $5.50 per
share.

(+) TUES guides for Q4 results ahead of single analyst estimate.

DOWNSIDE MOVERS

(-) TSL down despite analyst coverage initiated at Buy.

(-) GLW cut to Neutral at Goldman Sachs.

(-) AET downgraded.

(-) PLX gets prescription drug user fee act action date for Taliglucerase.

(-) JASO inks new contracts.

(-) SHAW beats with Q3 EPS, issues mixed guidance.

(-) AA firmer ahead of post-bell earnings.

MARKET DIRECTION

Stocks end just in positive territory, enough of a move to stretch the recent win streak to five sessions. Wall Street chopped around after strong gains last week and ahead of evening earnings reports, the beginning of another round of quarterly results across several sectors.

Crude oil futures fell Monday as the market was unable to extend prices following last week's 5.5% gains. Crude for August delivery lost $1.14, or 1.5%, to $75.91 a barrel.

Stocks fell initially in part after China reported weak import data.

Imports to China fell to a yearly growth rate of 34.1% in June, from 48.3% in May. China's June exports grew 43.9% from the year-earlier month.

In company news, BP Plc (NYSE:BP) shares are higher amid more speculation that part or all of its assets may be sold off. The Wall Street Journal reported that BP was in talks to sell assets to Houston-based Apache Corp. (NYSE:APA) in a deal that could be worth as much as $10 billion.

London's Sunday Times said Exxon Mobil (NYSE:XOM) and another U.S. oil firm have asked the U.S. government whether they could bid for BP. Meanwhile, BP said Monday that the cost of the response to the oil spill in the Gulf of Mexico has climbed to $3.5 billion.

Meanwhile BP Plc (BP) said it would attach a new containment cap that would triple the amount of crude being collected from the leaking Gulf of Mexico wellhead on Monday, according to a Reuters report. The cap will reportedly triple the amount of oil collected from the well.

Mergers and acquisitions activity was high for the day.

Johnson & Johnson (JNJ) and Micrus Endovascular (MEND) announced a definitive agreement whereby Micrus Endovascular will be acquired in a cash for stock exchange. Under the terms of the agreement, Micrus Endovascular stockholders will receive at closing $23.40 for each outstanding Micrus Endovascular share. The value of the transaction as of the anticipated closing date is estimated to be approximately $480 million, based upon Micrus Endovascular's 20.5 million fully diluted shares outstanding.

Aon (AON) and Hewitt Associates (HEW) approve a definitive agreement under which Hewitt will merge with a subsidiary of Aon. The aggregate consideration is valued at $50 per Hewitt share.

Playboy Enterprises Inc. (PLA) is higher after founder Hugh Hefner, 84, proposed taking the company private at $5.50 a share, sending the stock up 36%. The deal values the company at $185 million, a shadow of its former worth. Playboy became a cultural icon in the '50s and '60s largely be publishing photos of nude women. But with the rise of the Internet, soft-core porn has become a commodity, hurting the magazine and its related properties.

Avon Products (NYSE:AVP) said it would buy Silpada Designs Inc., which sells sterling silver jewelry, for at least $650 million. The company said the deal would raise next year's profits, according to Reuters. Specifically, the acquisition would lift earnings by 3 cents to 5 cents per share in 2011. The company said that Silpada is a fast growing business with margins significantly higher than Avon's, the report said.