Stocks: Monday's review
Japanese stocks declined, sending the Nikkei 225 (NKY) Stock Average to its first drop in a week, amid concern that the global economic recovery is slowing.
Toyota Motor Corp. (7203), Japan’s largest company by sales, lost 2.4 percent after the automaker said profit will fall almost a third this year following March’s record earthquake.
Honda Motor Co. lost 2.5 percent to 2,911 yen and Nissan Motor Co. slid 1.1 percent to 784 yen.
Bridgestone Corp., Japan’s No. 1 tiremaker by market value, sank 2.5 percent.
Rival Sumitomo Rubber Industries slid 1.9 percent to 961 yen, while Yokohama Rubber Co. dropped 1.4 percent to 433 yen.
Japanese machinery orders fell for the first time in four months in April, an indication that companies are reluctant to spend following the earthquake disaster. Factory orders fell 3.3 percent in April from March, the Cabinet Office said today in Tokyo.
Inpex Corp. (1605), Japan’s biggest oil explorer by sales, slid 1.7 percent after oil prices declined.
Japan Petroleum Exploration Co., the nation’s second-largest oil explorer by revenue, slumped 1.7 percent to 3,835 yen.
European stocks advanced, rebounding from a 2 1/2 month low, led by a rally in Eurasian Natural Resources Corp. as investors speculated that the mining company may receive a takeover approach.
ENRC jumped 4.7 percent after the Sunday Times reported that Glencore International Plc, the world’s largest commodity trader, may make a bid. Kazakhmys Plc (KAZ) climbed 2.2 percent.
Banco Popolare SC (BP) advanced on speculation that the Italian lender may avoid holding a rights offer.
Credit Agricole SA may be among the companies interested in buying Agos, the Italian newspaper said without saying where it got the information.
Lloyds Banking Group Plc (LLOY) rose 1.4 percent to 47.6 pence. The Sunday Times reported that the bank may cut 15,000 jobs as part of a strategy to save 1 billion pounds ($1.6 billion) to be announced by Chief Executive Officer Antonio Horta-Osorio on June 30.
Carnival Plc paced declining shares after the company cut its forecast. Carnival dropped 2 percent to 2,254 pence
Imperial Tobacco Group Plc (IMT) slid 1.4 percent to 2,056 pence after Europe’s second-biggest tobacco company said reduced cigarette prices in Spain will restrain full-year profit.
Aggreko Plc (AGK) sank 3.2 percent to 1,874 pence after Numis Securities Ltd. downgraded the world’s largest provider of mobile power supplies to “sell” from “hold.”
U.S. stocks closed little changed Monday, as investors worked through a downgrade of Greece's credit rating, tempering earlier investor enthusiasm for a series of corporate deals.
Stocks opened higher following a series of deals. But the gains were short lived after credit agency Standard & Poor's downgraded its rating on Greece to "CCC." S&P also kept its negative outlook on Greece.
The downgrade pressured the currency and commodity markets. Oil fell 2% to $97.30 a barrel, silver prices slid more than 4% and and gold prices dropped 1% to $1,515.60 an ounce.
Energy and material stocks were hit hard, with Cabot Oil (COG) tumbling 3.5% and Halliburton (HAL, Fortune 500) shares down more than 2%.
Apparel company VF Corp. (VFC, Fortune 500), the maker of Wrangler and The North Face brands, agreed to buy Timberland for $43 per share -- creating a $10 billion apparel and footwear company. Shares of Timberland (TBL) rose 44% and VF Corp.'s stock jumped 10%.
Wendy's/Arby's Group (WEN) rose 1%, after the restaurant operator agreed to sell Arby's to a private equity group led by Roark Capital Group. Wendy's will retain an 18.5% ownership interest in the roast beef chain's business.
These deals were some of the first M&A activity Wall Street had seen in weeks.
Companies: Sears Holdings (SHLD, Fortune 500) was the second-best performing stock in the S&P 500, rising more than 5%.
Honeywell (HON, Fortune 500) announced plans to acquire EMS Technologies (ELMG) for $491 million in cash. Honeywell shares edged higher, while EMS shares jumped 32%.
European Insurance company Allied World Assurance (AWH) agreed to buy U.S. insurance company Transatlantic Holdings (TRH) for approximately $3.2 billion in an all-stock deal. Transatlantic shares rose 10%, while Allied World shares were down 4.5%.
Shares of Citigroup (C, Fortune 500) rose 3% despite a Wall Street Journal report that said the bank waited three weeks before notifying customers of a credit card hack attack.