Dow +92.83 (+0.73%)
Nasdaq +23.50 (+0.98%)
S&P 500 +16.87 (+1.22%)
News That Moved the Market
Microsoft's Bid For Yahoo Spurs Rally. The markets found a direction after a volatile morning digesting a plethora of news. Most of the attention went to Microsoft's (MSFT, -6.6%) unsolicited $44.6 billion bid for Yahoo (YHOO, +47.8%). Microsoft's $31/share bid represented a 62% premium over Yahoo's closing price on Thursday. The combination of the two companies may provide stiff competition to Google (GOOG, -8.7%) who owns 56% of the Internet search market. Shares of Microsoft fell hard with investors questioning the steep premium and how the two companies will merge cultures, technologies, and strategies.
Jobs Reports Disappoints; ISM Manufacturing Jumps. Investors also had two major economic reports to deal with Friday, with both the monthly jobs report and the ISM Manufacturing Index being released. The jobs report was an absolute disappointment, showing a decrease in non-farm payrolls for the first time in four and a half years. The report proved the Fed's actions over the past two weeks were well justified and even more action will probably be needed to dodge a recession. ISM Manufacturing came in at 50.7, well ahead of estimates and representing expansion. The contradicting reports had a somewhat canceling out effect that allowed investors to concentrate on Microsoft's (MSFT, -6.6%) bid.
Merrill Sued For Fraud. Merrill Lynch (MER, +3.6%) was charged by Massachusetts regulators with fraud after selling CDOs to the city of Springfield, Massachusetts. The CDOs lost 91% of their value and the city said it did not authorize the purchase of the CDOs, adding the investment was unsuitable for the city's risk tolerance. Merrill was a little puzzled by the suit, which came a day after the bank said it would reimburse Springfield $13.9 million for their losses.
Notable Earnings (Full List Here):
Wendy's (NYSE:WEN) Before Open
Yum Brands (NYSE:YUM) After Close
10:00 AM: Factory Orders