Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:53 AM EST
S&P 500: +3.80; 1,534.80
NASDAQ 100: +6.75; 1,978.75
Dow: +18.00; 13,645.00
NIKKEI 225: +0.02%; 18,149.90 (+3.60)
HANG SENG: +1.74%; 22,151.14 (+378.41)
S&P/ASX 200: +0.57%; 6,299.00 (+35.70)
BSE SENSEX 30: +0.97%; 14,806.51 (+142.25)
FTSE 100: +0.69%; 6,636.40 (+45.80)
CAC 40: +0.81%; 6,075.63 (+48.68)
XETRA-DAX: +1.22%; 8,055.33 (+97.09)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.14%; $70.99 (-$0.10)
Gold: -0.03%; $659.00 (-$0.20)
Natural Gas: +0.92%; $6.83 (+$0.06)
Silver: -0.24%; $12.71 (-$0.03)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
Teck Cominco in $3.9B Deal; Rio Tinto Says Unable to Meet Chinese Demand
Canadian mining company Teck Cominco has agreed to purchase Aur Resources, also from Canada, for C$4.1 billion ($3.89b), or $41/share, in cash and shares. This represents a 29% premium over its Monday close in Toronto. Post-merger, Teck Cominco expects an immediate 43% increase in annual copper production (a 72% rise by 2010) and said reserves will increase by 136%. Meanwhile, Rio Tinto approved a $1.8b expansion of the Yarwun Alumina Refinery in Queensland, Australia. The expansion is expected to commence during Q3 and be completed in about three years. Aluminum production is seen doubling by 2011. Separately, Rio Tinto Iron Ore Group CEO Sam Walsh said the iron ore market is "extremely tight." He told analysts the company "quite frankly, can't meet demand." Iron ore prices have more than doubled in the past three years. Rio Tinto's iron ore export expansion plans in Western Australia remain on schedule and on budget, said Walsh. Shares of Teck Cominco gained 4.6% to $44.46 Monday. Rio Tinto's ADSs rose 5% to $321.48.
Sources: Teck Cominco press release, Rio Tinto press release, MarketWatch I, II, III
Commentary: Teck Cominco Should Benefit From Strong Chinese Copper Imports • What A Soaring Loonie Means for Canadian Miners' Earnings • Speculation Takeover Continues For Alcan, Alcoa: BHP, Rio Tinto Front-Runners
Stocks/ETFs to watch: Teck Cominco Ltd. (TCK), Rio Tinto plc (RTP). Competitors: Newmont Mining Corp. (NYSE:NEM), Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Alcoa Inc. (NYSE:AA), Alcan Inc. (NYSE:AL), BHP Billiton Limited (NYSE:BHP), Companhia Vale do Rio Doce (NYSE:RIO). ETFs: Market Vectors Steel (NYSEARCA:SLX), iShares MSCI Australia Index (NYSEARCA:EWA)
Google Buys Web-Phone Start-up GrandCentral
Google announced it is acquiring internet start-up GrandCentral Communications for an undisclosed sum. The company's technology integrates all of a user's existing phone numbers and voice mailboxes into one account, which can be accessed from the web. "You get a single phone number that forwards to all of your phones, giving you one number for life," GrandCentral said on its website, announcing the deal. The company arose as a result of founder Craig Walker's frustration by having to constantly check multiple voicemail boxes. Users receive one phone number, which they can set to ring on all, some or none of their phones -- based on who's calling. On its FAQ, GrandCentral says: "Google acquired GrandCentral because its communications services fit into Google's mission to organize the world's information and to provide services and features that enhance the collaborative exchange of information between our users." Mike Arrington's TechCrunch believes the price-tag may have been in the $50 million range. Analysts note users of the service would to an extent give Google access to their phone records.
Sources: GoogleBlog, GrandCentral FAQ, Reuters, GigaOM, TechCrunch
Commentary: SkypePrime, SkypeFind: Is eBay's Skype Getting Desperate? • Telecom Meets Web 2.0 - Who Wins? • Google Acquires GrandCentral - Game on Skype! [ReadWriteWeb]
Stocks/ETFs to watch: Google Inc. (NASDAQ:GOOG). Competitors: eBay Inc. (NASDAQ:EBAY) owner of Skype
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)
Recap of Yesterday's Action
A combination of merger announcements, a rally in bonds and better economic news led to a triple-digit close on the Dow and a new high for the Nasdaq this year. After two weeks of M&A inactivity, investment bankers had an active weekend when they announced the following deals yesterday: BCE Inc. (NYSE:BCE), the parent of Bell Canada, agreed to be taken private by the Ontario Teachers Pension Plan for $48.5 billion; Carlyle Group offered to take over Virgin Media (NASDAQ:VMED) for up to $11.7 billion; AT&T (NYSE:T) agreed to buy Dobson Communication (Pending:DCEL) for $2.8 billion; Manor Care (HCR) was taken out for $6.3 billion; and it was even rumored that Bear Stearns (NYSE:BSC) could be on the auction block.
Bonds closed higher with the 10-year Treasury yield falling under 5%. Additionally, the Institute for Supply Management (ISM) headline index showed the highest level of production since July 2004 and beat analysts' expectations by .9%, coming in at 56. Even though volume was light in anticipation of the Independence Day holiday these announcements, coupled with Friday's reading of 1.9% inflation, resulted in euphoria on a day that was supposed to be dull.
At the close, the Dow Industrials gained 127 points to finish at 13,535. The S&P 500 gained 16 at 1,519, and the Nasdaq closed at a new high for the year at 2,632, up 29 points. Volume was predictably light with just over 1 billion shares trading on the Big Board and 1.5 billion on the Nasdaq. Breadth on the NYSE was very positive at 25/7; the Nasdaq had nine stocks up for every five down.
The 10-year Treasury closed at a yield of 4.985. Crude oil (August contracts) rose 41 cents to $71.09 a barrel, and the Amex Energy SPDR (NYSEARCA:XLE) rose by $1.17 to $70.16. August gold contracts closed at the highest level in almost 2 weeks, up $8.30, to settle at $659.20, and the Philadelphia Gold and Silver Index [XAU] was up $3.22, closing at $139.16.
What the Markets Are Saying
We shouldn't place too much importance on yesterday's triple-digit rally since days before holidays are often highly volatile. But the Nasdaq did break out, and the Dow charged ahead with 27 of the 30 stocks making gains. And so June's double bottom at about Dow 13,265 and S&P 1,490 will provide firm support and establish a bottom with a top of Dow 13,740 and S&P 1,539.
Today's Trading Landscape
The only economic report due today is for June factory orders at 10 a.m. and no significant earnings are due. However, because of the shortened trading session today and a holiday tomorrow, we might have another volatile session.
Asian Headlines (via Bloomberg.com)
• Asian Stocks Rise to Record on Manufacturing Outlook, Metals; Honda Gains Asian stocks rose, lifting a regional benchmark to a record, on signs of increasing demand for exports, metals and crude oil.
• China Shenhua May Raise $6.7 Billion in Biggest Share Sale by Coal Company China Shenhua Energy Co. is planning the world's biggest share sale by a coal mining company to raise as much as $6.7 billion as demand for the fuel surges.
• China Central Bank Plans to Tighten `Moderately' to Prevent Overheating China's central bank said it will ``moderately'' tighten monetary policy to control investment and lending growth and prevent the economy overheating this year.
• Fairfax, Macquarie Media Agree to Buy Southern Cross, Split Its Networks Fairfax Media Ltd. will buy Southern Cross Broadcasting Ltd.'s national radio network, becoming the first Australian newspaper publisher to take advantage of the abolition of media ownership restrictions.
• HSBC Asia Investment Banking Head Wallace Moves to Citigroup, Person Says HSBC Holdings Plc's (HBC) Asia investment banking head Steven Wallace left for Citigroup Inc. (NYSE:C), a person with direct knowledge of the matter said.
European Headlines (via Bloomberg.com)
• Stocks in Europe Rise, Led by MAN, Nokia; Danone Jumps After Bid for Unit European stocks gained after brokerages became more bullish on the region and Kraft Foods Inc.'s (KFT) bid for Groupe Danone SA's (DA) biscuit unit fanned takeover speculation.
• SAP Says It Made `Inappropriate' Downloads, Responds to Oracle Lawsuit SAP AG (NYSE:SAP), the world's largest maker of business-management software, said it made ``inappropriate'' downloads of Oracle Corp. (NYSE:ORCL) code, responding to a lawsuit that claims the German company stole programs from the competitor.
• Telefonica to Be Fined Up to $204 Million by EU Over Broadband, People Say European antitrust regulators will fine Telefonica SA (NYSE:TEF) as much as 150 million euros ($204 million) for abusing its dominance in broadband Internet access in Spain, two people with direct knowledge of the case said.
• Autonomy Buys Zantaz; Shares Rise as Sales, Profit Beat Analyst Estimates Autonomy Corp. (OTC:AUTNF), which sells database search software, bought closely held e-mail archive company Zantaz Inc. for $375 million and said second-quarter revenue and pretax profit beat analysts' highest estimates. The stock had its biggest gain in 18 months.