MARKET SNAPSHOT--Stocks limp into data-packed week
Important election news also expected
By Greg Morcroft, CBS.MarketWatch.com
Last Update: 7:38 AM ET Dec 4, 2000
NEW YORK (CBS.MW) -- U.S. stock futures were modestly lower early Monday, as the markets remained in a sluggish mood at the beginning of a week guaranteed to deliver a double dose of political and economic news.
Nasdaq futures were trading at 2570.00, off 2.5 points. S&P 500 futures also traded nearly unchanged at 1318.60, off 1.9 points, but fractionally above fair value.
Individual stocks
Cardinal Health (CAH) said it has agreed to acquire Bindley Western Industries (BDY) in a deal valued at approximately $2.1 billion in stock. Under terms of the agreement, Bindley shareholders will receive a fixed exchange of 0.4275 Cardinal shares for each Bindley stock they own.
Based on Friday's closing price, Bindley's stock is being valued at $42.54 each.
That represents a 33 percent premium over Friday's closing price, and roughly equals the stock's 52-week high.
Earlier, PepsiCo agreed Monday to acquire Quaker Oats and its highly coveted Gatorade sports drink brand for $13.4 billion in stock, ending a closely watched takeover courtship involving several parties.
Under terms of the deal, Quaker (OAT) shareholders will receive 2.3 PepsiCo (PEP) shares for each share of Quaker, valuing that company at $97.47 per share based on PepsiCo's close Friday of $42.38. Quaker shares rose $1.69 Friday to close at $88.63.
At the same time, PepsiCo Chairman and CEO Roger Enrico announced his successor, naming Steve Reinemund, the company's current president and chief operating officer, as the head of the combined company once the deal closes.
U.K. chip architecture firm ARM Holdings (ARMHY) said it's licensed some of its microprocessor designs to U.S. semiconductor and telecom equipment company Motorola (MOT) Inc.
ARM's share price rose as much as 4 percent in London on the news, but then dropped more than 1 percent from Friday's close to 509 pence.
Also in the chip arena, the trade group Semiconductor Association of America reported that chip sales in October remained strong. See full report from SIA.
Earnings and data watch
The market will have plenty of data to sift through this week -- October new home sales, leading economic indicators, factory orders, the revision to third-quarter productivity, October consumer credit, and the November employment report. View Economic Preview, economic calendar and forecasts and historical economic data.
"Friday's employment report for November will be particularly important," said Lynn Reaser, chief economist and senior market strategist at Banc of America Capital Management.
She looks for the unemployment rate to edge up in November and expects more restrained wage increases, which should help the Fed shift back to a neutral stance on rates at its next policy-setting meeting on Dec. 19.
This week's earnings calendar includes reports from: JD Edwards, Albertson's, Comverse Technology, Heinz, Kroger, Movado, National Semi, Ciena and Pier 1 Imports.
Thus far, the fourth-quarter earnings estimate for S&P 500 companies has dropped to 10 percent from the 15.6 percent expected on Oct.1, First Call said. And since Oct. 1, expectations for the first quarter of 2001 have dropped to 10.5 percent from 14.2 percent.
Also in the background, important court rulings could be forthcoming in the next few days from the Supreme Court and from Florida courts that may give a clearer picture about who the next U.S. President will be -- a cloud that's been hanging over the markets since Election Day.
Friday's trading activity
On Friday, the Dow Jones Industrials Average ($DJ) shed 40.95 points, or 0.4 percent, to 10,373.54.
Pushing the Dow into the minus column were shares of Intel, Boeing, SBC Communications, McDonald's, Eastman Kodak, Merck & Co. and Johnson & Johnson.
The Nasdaq Composite ($COMPQ) added 47.36 points, or 1.8 percent, to 2,645.29 after rising as much as 152 points in intra-day dealing while the Nasdaq 100 Index rose 43.20 points, or 1.7 percent, to 2,549.74.
The Standard & Poor's 500 Index ($SPX) edged up 0.23 point while the Russell 2000 Index ($RUT) of small-capitalization stocks swelled 2.4 percent.
Volume was heavy at 1.19 billion on the NYSE and at 2.22 billion on the Nasdaq Stock Market. Market breadth was positive, with advancers outnumbering decliners by 19 to 10 on the NYSE and by 25 to 15 on the Nasdaq.
Treasury action
Government prices sputtered Friday, with long issues bearing the brunt of the selling. A 2-year is currently trading about 90 basis points below the current fed funds target of 6.50 percent.
The 10-year Treasury note was off 5/32 to yield ($TNX) 5.51 percent while the 30-year government bond erased 14/32 to yield ($TYX) 5.635 percent.
In economic news, the November National Association of Purchasing Management Index came in at 47.7 percent versus the expected 48.5 percent. And October construction spending rose 0.9 percent versus expectations for a 0.3 percent increaseCornering the currency market, dollar/yen rallied 0.8 percent to 111.21 while euro/dollar climbed for the fifth straight session, adding 0.8 percent to 0.8790.
Greg Morcroft is New York news editor of CBS.MarketWatch.com. |
