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Market Update

Wall Street Opens Lower, Oracle Offers $2 Billion for Acme Packet

Author: Nichole Harper
Last Update: 9:52 AM ET February 04 2013

9:50 AM New York – Stocks opened lower after a rally that lifted indexes to five-year highs last week. European markets weakness weighed heavily on the market sentiment after index in Spain and Italy dropped 2%.

Stocks in early trading in New York declined after market indexes surged to five-year highs.

Caution returned to world markets after investors worried about Spain and Italy regained momentum and bond yields rose in European trading.

Over the weekend, the opposition party in Spain called on Prime Minister Mariano Rajoy to resign over a corruption scandal.

Also, former Prime Minister of Italy, Silvio Berlusconi made headways in the election scheduled this month on the promise of dismantling most of the reforms put in place by technocrat Mario Monti.

Markets in Europe pulled back and the benchmark index in Madrid, IBEX 35 fell 2% and the MIB index in Milan declined 2.4%.

In addition, factory orders are expected to be released this morning at 1000 a.m. ET by the Commerce Department and the orders are expected to increase 2.2%.

Oracle Offers $1.98 Billion for Acme Packet

Oracle Corp agreed to acquire network device maker Acme Packet Inc for $1.98 billion in cash.

Oracle president, Mark Hurd said the merger will accelerate its deployment of all-IP networks supported by Oracle software and databases.

Oracle agreed to pay 22% premium to Friday’s closing price of Acme or $29.25 a share and net of cash the deal is priced at an enterprise value of $1.7 billion.

Acme is based in Bedford, Massachusetts and makes networking equipment that allows delivering of voice, video and data across Internet networks. Also Acme swung to a loss in the fourth quarter to December of $2.03 million and revenues declined 15% to $70.7 million.

Stocks in Review

CME Group Inc (CME) trading of futures contracts in January declined 2% from the year ago month to 11.4 million.

Herbalife (HLF) dropped 9.5% after a media report speculated that the company may be under investigation by the Federal Trade Commission.

Humana Inc (HUM) gained2% after the insurance company reported lower earnings but exceeded the expectations as it absorbed more customers with higher costs.

Simon Property Group (SPG) declined after it reported fourth quarter earnings that were below expectations and offered lower 2013 earnings outlook.

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