Stock Futures Flat on China amid M&A News. Stocks to Watch: AMLN, AAPL, CELL, BMY, FB, IM, LNCR, MU, WYNN
Published on Monday, 02 July 2012 08:19 Written by Christopher Lynn
New York, July 2nd (TradersHuddle.com) – Stock futures were pointing to a flat opening after big Friday’s rally, as disappointing manufacturing data in China was offsetting a flurry of M&A news. Investors will be focusing on key manufacturing data in the U.S. due out later in the morning.
In Asia, most stocks climbed at the start of third quarter, following the sharp gains from Friday after EU leaders announced a series of measures that will provide relief to the periphery, which is being affected the most by the debt crisis. The Nikkei retreated 0.04% from nearly a 2-month high. The Bank of Japan's tankan survey showed the business mood of Japanese manufacturers improved in the April-June quarter for the first time in three quarters. Meanwhile, the Shanghai Composite gained 0.03%, after losing 6.2% in June. China official PMI for June was 50.2 versus 50.4 in the prior reading.
In Europe, markets were moving to the upside, adding to the gains from the prior session, after leaders provided concrete measures that will allow short-term support to Italy and Spain without further austerity measures and bank recapitalization without adding to sovereign debt. Euro zone PMI was 45.1 versus 44.8 in the prior reading, while German PMI was 45 versus 44.7 in the prior month and euro zone unemployment ticked higher to 11.1%.
The euro was losing against the Dollar, trading above the $1.26 level. Crude oil was dropping 1.4% to $83.78 per barrel. Also in the energy complex, natural gas was falling 0.74% to $2.803 per MMBtu. Gold was falling 0.79% to $1591.50 an ounce, and silver was slumping 1% to $27.31 an ounce. Meanwhile, copper was retreating 1.09%.
On economic news, at 10 am, the Institute for Supply Management’s June manufacturing index and May construction spending data will be released.
Today’s Stocks to watch: Amylin Pharmaceuticals (NASDAQ: AMLN), Apple (NASDAQ: AAPL), AstraZeneca (NYSE: AZN), Brightpoint (NASDAQ: CELL), Bristol Myers Squibb (NYSE: BMY), Facebook (NASDAQ: FB), Ingram Micro (NYSE: IM), Lincare Holdings (NASDAQ: LNCR), Micron Technology (NASDAQ: MU), and Wynn Resorts (NASDAQ: WYNN).
Amylin Pharmaceuticals (NASDAQ: AMLN) was jumping 9% to $30.75 in pre-market on news the company agreed to be acquired by Bristol Myers Squibb (NYSE: BMY) for $31 per share or $5.3 billion. The total value of the transaction including Amylin's net debt and a contractual payment obligation to Eli Lilly of about $1.7 billion, is about $7 billion. Following completion of Bristol-Myers Squibb's acquisition of Amylin, AstraZeneca (NYSE: AZN) will make a payment to Amylin, as a wholly owned subsidiary of Bristol-Myers Squibb, in the amount of $3.4 billion in cash, as the companies will enter into collaboration arrangements, based on the framework of the existing diabetes alliance, regarding the development and commercialization of Amylin's portfolio of products. Shares of Bristol Myers were unchanged in pre-market.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was flat in pre-market after the company closed above its 50day moving average in the prior session and gained 1.11% last week and 4% for June. The company is paying $60 million to China’s ProView Technology to settle a trademark dispute over the iPad name. Last week, Bernstein said that despite plenty of opportunity for the iPhone in China, the company faces short-term hurdles, as the firm expects a decline of 1.5 million iPhones amid a slowdown in the Chinese economy, while Wells Fargo resumed its coverage on Apple with an Outperform rating.
Brightpoint (NASDAQ: CELL), the leader in distribution of wireless devices and the provisioning of customized logistic services to the wireless industry, was soaring 62.85% on news that Ingram Micro (NYSE: IM) will be acquiring the company for $9 per share. Ingram Micro will acquire all of the outstanding shares of BrightPoint common stock for $9.00 per share in cash, a 66% premium to BrightPoint's closing stock price on June 29, 2012, and a 35% premium to the 90-day average trading price. The transaction is valued at about $840 million, including the value of $190 million of BrightPoint's estimated debt. The deal is expected to be accretive to earnings per share by at least 18 cents in 2013 and 35 cents in 2014, excluding one-time charges and integration costs.
Facebook (NASDAQ: FB), the social media Company, was climbing 0.5% to $31.25 after the stock lost 5.5% last week amid mixed ratings from analyst following the expiration of the IPO quiet period and amid ongoing worries over its advertising revenue growth. Last week, Macquarie initiated coverage with a Neutral. On Wednesday, Wells Fargo and Piper Jaffray initiated coverage with Outperform, while Goldman Sachs with a Buy. Credit Suisse gave it a Neutral rating and BMO Capital an Underperform rating.
Lincare Holdings (NASDAQ: LNCR), the provider of in home oxygen and other respiratory services, was surging 21% to $41.16 in pre-market on news that it agreed to be acquired by German industrial gas firm Linde for $41.5 per share, a 22% premium over Friday’s closing price.
Micron Technology (NASDAQ: MU), the dynamic random access memory chips maker, was gaining 1.74% to $6.42 in pre-market on news the company will be acquiring and supporting bankrupt Japanese chipmaker Elpida for a total consideration of about $2.5 billion. Under the agreement, 200 billion Yen total consideration, less certain reorganization proceeding expenses, will be used to satisfy the reorganization claims of Elpida's secured and unsecured creditors.
Wynn Resorts (NASDAQ: WYNN), the luxury casino operator, will be in focus after the Macau Gaming Inspection and Coordination Bureau reported that June gross gaming revenue increased 12.2% from a year ago to 23.3 billion patacas. Macau gaming revenue is now up 19.8% year to date. Wynn’s 72% of first quarter net revenues and 74% of adjusted EBITDA was generated in Macau.
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