US futures rise on deals
IOL Business/ Reuters - Feb 20th, 10:13
New York - US stock index futures advanced on Tuesday, indicating the S&P 500 will build on its seven-week winning streak on optimism about M&A activity and before data on the housing market.
The S&P 500 has risen for seven straight weeks, its longest streak since January 2011, and is up 6.6 percent for the year.
The strong start to the year was fueled by legislators in Washington temporarily averting a series of automatic spending cuts and tax hikes as well as better-than-expected earnings and economic data. The Federal Reserve's stimulus policy has also been a major factor.
But further gains for the benchmark S&P index have been a struggle as investors look for new catalysts to lift the index, which hovers near five-year highs.
The compromise by lawmakers on across-the-board spending cuts, known as sequestration, only postponed until March 1 a resolution to the congressional budget fight.
The uptick in merger and acqusition activity, a sign of optimism about the outlook on Wall Street, has resulted in more than $158 billion in deals announced so far in 2013.
“The firm market tone continues, fueled by a lack of negative surprises as well as an increase in M&A activity, adding confidence to market valuations,” said Andre Bakhos, director of market analytics at Lek Securities in New York.
“The market has been able to shrug off minor negatives as it looks ahead to a potential bigger hurdle in the sequestration -until then, the situation looks stable.”
Office Depot Inc surged 26.1 percent to $5.79 in premarket trading after a person familiar with the matter said the No. 2 US office supply retailer is in advanced talks to merge with smaller rival OfficeMax Inc and a deal could come as early as this week. OfficeMax shares jumped 13.7 percent to $12.22 before the opening bell.
Economic data on tap includes the National Association of Home Builders/Wells Fargo index on housing sales for February at 10 a.m. (17:00 SA time). Economists in a Reuters survey expect a reading of 48 compared with 47 in January.
Improving housing data has been cited by analysts as one of the key factors in the stock market rally.
S&P 500 futures rose 3.1 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 22 points and Nasdaq 100 futures added 5.75 points.
Computer maker Dell reports fourth-quarter results, expected to show earnings per share fall to $0.39 from $0.51 one year earlier. Analysts will have their first chance to question management on a buyout deal struck earlier this month by Chief Executive Michael Dell, private equity firm Silver Lake and Microsoft.
According to the Thomson Reuters data through Friday, of the 388 companies in the S&P 500 that have reported results, 69.8 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.
Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
European shares rose on Tuesday, lifted by gains at food group Danone and fresh signs of a German economic recovery, although broader market sentiment remained cautious ahead of Italian elections this weekend.
Philippine and Australian shares scaled new heights, but other Asian shares were mixed, with worries about an inconclusive outcome in Italy's election and US budget talks. - Reuters
Dell CEO Shortlist
10/06/2013 - 09:53
Carl Icahn and Southeastern Asset Management Inc are short-listing potential candidates to become the next Dell Inc chief executive should they succeed in a proxy battle against Michael Dell and Silver Lake Partners, two sources close to the matter told Reuters.
Dell board backs CEO's buyout offer
03/06/2013 - 09:05
New York - The board at Dell said that a takeover bid led by the company's founder and CEO is in the best interest of the slumping PC maker's shareholders and asked them to approve the deal when it's put to a vote in July.
Dell to be ‘aggressive’
03/04/2013 - 08:27
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Mondi posts slight drop in full-year earnings
21/02/2013 - 11:08
Johannesburg - South African Paper maker Mondi [JSE:MND] said on Thursday it expects to reap the benefit of recent acquisitions after reporting a slight drop in full-year earnings on lower prices.
US futures tick down
18/02/2013 - 09:48
New York - US stock index futures dipped on Friday, continuing a trend this week of thin volume and tight trading bands, as the S&P 500 struggled to extend its streak of weekly gains to seven