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Market Update

S&P Up 1% on Mergers, Volatile Oil, Greece and Earnings


Author: Nichole Harper
ticker.com
Last Update: 1:44 PM ET February 05 2015

1:40 PM New York – Mergers, earnings, oil volatility and Greece drove market sentiment in New York and Europe. Pfizer agreed to acquire Hospira for $17 billion. U.S. trade deficit widened to a two-year high. Oil soared nearly 9%. Greece pushed for the rollback of austerity measures as the ECB takes steps.

Stocks on Wall Street turned volatile following the ups and downs in the oil trading and earnings gained focus of investors.

Crude oil price rebounded 6% after plunging 8.7% on Wednesday and the wild swings in oil trading pit affected stocks of energy explorers, airlines and transportation companies.

In addition, Greece was in focus after ECB tightened lending standards for Greek bonds and cutoff direct lending to struggling nation with unemployment hovering near 24%.

Mergers were also in focus after Pfizer agreed to pay $17 billion for Hospira, the largest provider of injectable drugs and infusion technology.

Also, Under Armour announced the purchase of San Francisco based MyFitnessPal.com. The online company claims 80 million registered users and is popular for its calorie count tools and a community focused on healthy living.

On Wall Street trading, Tollbooth Strategy Index increased 0.9% or 92.18 to 10,238.

S&P 500 index gained 15.86 or 0.8% to 2,057.32 and the Nasdaq Composite Index rose 31.41 or 0.6% to 4,747.10.

Seasonally adjusted weekly jobless claims climbed 11,000 to 278,000 from the previous week revised claims of 267,000, the Department of Labor reported today.

In a separate report, the department said preliminary non-farm business sector labor productivity dropped 1.8% annual rate during the fourth-quarter.

Trade deficit in December widened to $46.6 billion from revised $39.8 billion in November.

December exports fell $1.5 billion but imports increased $5.3 billion from November, the Department of Commerce reported.

U.S. Movers

BT Group Plc (BT) climbed 6.1% or $3.88 to $67.89 after the U.K.-based communication service provider agreed to acquire EE for £12.5 billion in cash and new BT ordinary shares.

Following the transaction Deutsche Telekom will hold a 12% stake in BT and the transaction is expected to be complete before the end of fiscal year.

Pfizer Inc (PFE) increased 2.6% or 84 cents to $32.91 after the biopharmaceutical company plans to acquire Hospira Inc for about $15 billion to strengthen its generic injectible drugs and biosimilars business.

The drug-makers offered $90 per share in cash, a 39% premium to Hospira''s closing stock price of yesterday.

The deal requires regulatory and shareholder approvals.

European Markets

European markets were under pressure after the ECB tightened bail out conditions for Greece.

European Central Bank said Greek bonds will not be eligible for collateral and also stopped direct funding.

The ECB announced the move late night on Wednesday and had not indicated that such an action was in the making.

Greece will continue to rely on emergency funding provided by the central bank but the access to Emergency Liquidity Assistance will come at an interest rate of 1.5% compared to direct loans from the ECB at 0.05%.

Stocks in Athens declined 5.4% and banks dropped more than 8% after the ECB statement this morning.

Bank of Greece reassured investors and banks that there is sufficient liquidity in the market and banks are “adequately capitalized.”

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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