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Market Update

U.S. Leads 3-day World Markets Rally

Author: Nichole Harper
Last Update: 12:55 PM ET April 07 2015

12:55 PM New York U.S. stocks extended gains for the third day in a row and the dollar remained firm against the euro. Crude oil jumped for the second day and traded above $53 a barrel. India left its interest rate unchanged and Australia held rates at historic low of 2.25%. European markets surged.

Stocks on Wall Street traded higher as investors positioned portfolios for earnings announcements and factored low rate regime will continue.

Market indexes advanced after FedEx offered to acquire TNT Express NV based in Holland for $4.8 billion and Berkshire Hathaway agreed to acquire a minority stake in Axalta Coating Systems Ltd.

After two months of listless trading, U.S. indexes are set to advance for the third day in a row as Alcoa is set to kick off earnings season on Wednesday.

Market rally of last five years have stretched valuations and investors remain focused on the development in labor market, corporate spending and recovery in the housing sector.

Strong dollar has provided headwind to the exports but the sharp plunge in oil price has put more money in the hands of consumer.

On Wall Street trading, Tollbooth Strategy Index gained 0.3% or 30.10 to 10,530.14.

S&P 500 index rose 7.96 or 0.4% to 2,088.60 and the Nasdaq Composite Index increased 28.25 or 0.6% to 4,945.61.

Crude oil in New York jumped $1.13 to $53.27 a barrel and gold declined $6.60 to $1,212 an ounce.

U.S. Movers

Axalta Coating Systems Ltd (AXTA) soared 6.9% or $1.97 to $30.30 after the coatings and paint maker said Berkshire Hathaway Inc agreed to acquire 8.7% or a total of 20 million shares at an average price of $28 per share or about $560 million from the leverage buyout firm Carlyle Group LP.

FedEx Corporation climbed 4.3% to $173.85 after the air-freight and logistic company plans to acquire The Netherlands-based express delivery company for about 4.4 billion or $4.8 billion.

FedEx offered 8 per share in cash, which represents a premium of 33% over the closing price of April 2 and a premium of 42% on last three-month average price.

FedEx and TNT Express anticipated that the deal will close in the first-half of 2016.

General Motors Company (GM) dropped 1.8% or 65 cents to $36.01 after the Canada government agreed to divest 73.4 million shares worth about $2.69 billion in a deal arranged by Goldman Sachs.

European Markets

European markets surged after the announcement of the deal between TNT Express and FedEx.

In London trading, FTSE 100 index climbed 1.8% or 125.66 to 6,959.12 and in Frankfurt the DAX index jumped 1.42% or 167.98 to 12,135.37.

In Paris, CAC 40 index advanced 1.8% or 90.23 to 5,164.37.

Ryanair Holdings Plc jumped 2.8% to 11.16 after the Ireland-based low-cost airline company said passenger traffic in March soared 28% to 6.67 million from 5.2 million in a year ago month.

The company has flown a total of 90 million passengers, an increase of 9 million after the launch of its latest marketing plan a year ago in March.

The airline added passenger load factor in the month climbed to 90% compared to 80% in a year ago month.

Rio Tinto Limited increased 0.7% to $56.15 after the mining company announced the completion of off-market buy-back offer of about 11.6 million shares worth $560 million, ahead of its target of $500 million.

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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