Stock Market News for March 10, 2015 – Zacks Investment Research
Markets rebounded to the green on the sixth anniversary of the bull market boosted by mergers and acquisition activity, and gains in industrial and technology stocks. Benchmarks started the week on an encouraging note after a dismal Friday, when positive jobs data had sparked fears of a sooner-than-expected rate hike. Investors also found a buying opportunity yesterday, after the sell off last week.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) gained 0.8%, or nearly 139 points, to close at 17,995.72. The Standard & Poor’s 500 (S&P 500) added 0.4% to move up to 2,079.43. The tech-laden Nasdaq Composite Index closed at 4,942.44; rising 0.3%. The fear-gauge CBOE Volatility Index (VIX) slipped 0.9% to settle at 15.06. A total of about 6.2 billion shares were traded on the US exchanges on Monday, below the last five days’ average of 6.6 billion. Advancers beat the advancing stocks on the NYSE. For 51% stocks that gained, 46% declined.
It was the bull market’s sixth anniversary yesterday. The S&P 500 had hit a nadir of 676.53 points on Mar 9, 2009. The benchmark was dragged 60% down in 18 months by the collapse in the housing market and the recession.
The day was devoid of any major events, except for the news of a couple of merger and acquisition activity. Alcoa Inc. (AA – Analyst Report) created a stir in the trading activity yesterday after announcing that it is acquiring titanium supplier RTI International Metals, Inc. (RTI – Snapshot Report) in a transaction valued at $1.5 billion. Many call the acquisition “expensive” because Alcoa is giving RTI shareholders 2.8315 shares of Alcoa for every share of RTI they own. This values each RTI stock at about $41 dollars, which is higher than the $27.21 price tag on the stock last Friday. While shares of Alcoa dropped 5.4%, RTI soared 39.3%.
Separately, in a deal that would combine two of the biggest mall operators in the US, Simon Property Group Inc. (SPG – Analyst Report) has offered to buy competitor The Macerich Company (MAC – Analyst Report) for $14.39 billion. Simon said Monday that it would offer $91 per share—50% in cash and 50% in Simon common stock—for each share of Macerich. The company also disclosed an almost 4% stake in Macerich last November. The offer is valued at approximately $22.4 billion, which includes Macerich’s debt amount of $6.4 billion. Shares of Macerich jumped nearly 7% while Simon Property slipped only about 0.1%.
Gains in industrial and technology sectors aided markets’ advance yesterday. Industrials were the biggest gainer among the 10 S&P industry groups. The Industrial Select Sector SPDR ETF (XLI) gained 0.9%. Key stocks from the sector such as 3M Company (MMM – Analyst Report), United Technologies Corporation (UTX – Analyst Report), The Boeing Company (BA – Analyst Report), Lockheed Martin Corporation (LMT – Analyst Report) and Honeywell International Inc. (HON – Analyst Report) gained 1.2%, 1.9%, 1.1%, 1.1% and 1.3%, respectively.
Technology Select Sector SPDR ETF (XLK) gained 0.5%. Stocks including Microsoft Corporation (MSFT – Analyst Report), Cisco Systems, Inc. (CSCO – Analyst Report), International Business Machines Corporation (IBM – Analyst Report), QUALCOMM Incorporated (QCOM) and Texas Instruments Inc. (TXN) gained 1.2%, 1.5%, 1.4%, 1.7% and 1.4%, respectively.
No key economic data was released on Monday. However on Friday, it was the strong jobs numbers that had guided markets. The Bureau of Labor Statistics (BLS) had reported last Friday that the U.S. economy created a total of 295,000 jobs in February, beating the consensus estimate of 235,000. Moreover, the unemployment rate went down to six and a half year low figure of 5.5% in February from 5.7% the month before, which is also down from 6.7% in Feb 2014. However, these strong job data had a negative impact on investor sentiment as it raised the possibility of a sooner-than-expected rate hike. The Dow, S&P 500 and Nasdaq had dropped 1.5%, 1.4% and 1.1%, respectively. Over last week, the Dow, S&P 500 and Nasdaq had lost 1.5%, 1.6% and 0.7%, respectively. Thus, investors also tapped a buying opportunity on Monday, helping benchmarks open the week on a winning note.
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Stock Market News for March 10, 2015 – Zacks Investment Research
