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Market Update

S&P 500 and Indexes Lack Direction on Merger Monday


Author: Nichole Harper
ticker.com
Last Update: 1:11 PM ET June 01 2015

1:10 PM Market indexes reversed early decline on Merger Monday. Intel finalized its deal to acquire Altera for $17 billion in an all cash transaction. U.S. consumers in April used savings from cheaper gas prices to pay down debt and not increase spending.

Market indexes rebounded from morning slump on merger Monday and Intel and Altera consummated deal in the works for months.

Intel, the largest maker pf integrated chips agreed to acquire programmable chips maker Altera for $17 billion in cash.

The deal was so crucial to Intel, that the company will use up all its cash of $14 billion and raise additional $3 billion in debt to pay for this transaction.

As more appliances have chips including wearable devices and select category of apparel and vehicles, companies are looking to replace current kind of chips with programmable chips made by Altera and others.

Intel based its deal on 7% increase in earnings after the deal and also looked for new markets developed by Internet of Things.

In April, personal income jumped 0.4% and disposable personal income increased 0.4%. Personal consumption expenditure fell less than 0.1% in the month, the Department of Commerce reported.

In a separate report the department said construction spending in April climbed 2.2% at annual rate of $1,006.1 billion from the revised March estimate of $984 billion and jumped 4.8% from a year ago spending of $960.3 billion.

On Wall Street, Tollbooth Strategy Index increased 0.3% or 28.48 to 10,724.70.

S&P 500 index gained 0.3% or 7.19 to 2,114.54 and the Nasdaq Composite Index rose 0.4% or 20.99 to 5,090.92.

Crude oil in New York fell 57 cents to $59.73 a barrel and gold jumped $4.10 to $1,193.90 an ounce.

U.S. Movers

Dollar Tree, Inc (DLTR) jumped 1.6% or $1.23 to $76.22 after the fixed price stores operator announced that it will sell 330 Family Dollar stores, Inc to the private equity firm Sycamore Partners, to get antitrust approval for its $8.5 billion takeover of Family Dollar.

The transaction is anticipated to be finalized in July.

General Electric Company (GE) fell 12 cents to $27.15 after the Wall Street Journal reported that the diversified conglomerate received offers for its US-based commercial lending unit valued at $40 billion.

GE said it will sell GE Capital Fleet Services business valued at $9 billion and both transactions are expected to close by the end of this month.

Intel Corporation (INTC) slumped 1.4% or 48 cents to $33.99 after the semiconductor processors and chips maker agreed to acquire smaller chip maker Altera Corporation for $54 a share in an all-cash transaction valued of about $16.7 billion.

Altera Corporation stock climbed 6% to $51.80.

European Markets

In London trading, FTSE 100 index fell 0.3% or 20.97 to 6,963.53 and in Frankfurt the DAX index rose 0.2% or 19.06 to 11,432.88.

In Paris, CAC 40 index gained 0.5% or 27.89 to 5,035.78.

British American Tobacco Plc rose 0.3% to 3,617 pence after the U.K.-based tobacco products maker agreed to acquire cigarette manufacturer TDR d.o.o. and other tobacco and retail assets from Croatia-based Adris Grupa d.d. for 550 million to expand its business in Croatia, Bosnia and Serbia.

The transaction is expected to close in October.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc