From Briefing.com: 4:31 pm Action Semi enters into definitive merger agreement for going private transaction at $2.20/share in cash (shares halted) (ACTS) : The merger consideration represents a premium of 49.7% to the closing price of the co's ADSs on May 18, 2016, the last trading day prior to the co's announcement of its receipt of a "going-private" proposal, and a premium of 40.6% to the volume weighted average closing price of the co's ADSs during the 30 trading days prior to its receipt of a "going-private" proposal. The Buyer Consortium intends to fund the merger through available cash of the co and its subsidiaries.
The co's board of directors, acting upon the unanimous recommendation of a committee of independent and disinterested directors established by the Board approved the Merger Agreement and the merger and resolved to recommend that the co's shareholders vote to authorize and approve the Merger Agreement and the merger. The Special Committee negotiated the terms of the Merger Agreement with the assistance of its independent financial and legal advisors.
The merger, which is currently expected to close during the last quarter of 2016, is subject to customary closing conditions including the approval of the Merger Agreement by an affirmative vote of holders of Shares representing at least two-thirds of the voting power of the Shares present and voting in person or by proxy at a meeting of the co's shareholders which will be convened to consider the approval of the merger agreement and the merger
4:29 pm Amkor names Megan Faust CFO (AMKR) :
Ms. Faust joined Amkor in 2005 and brings more than 20 years of finance and accounting experience to her new position as CFO, including her service as Corporate Controller of Amkor since 2010.
Ms. Faust succeeds Joanne Solomon, who has left the co to pursue other opportunities.
4:10 pm : The stock market began the week on a sharply higher note as market participants dialed back rate hike expectations for the coming months. The major averages finished broadly higher, retracing the lion's share of Friday's losses. The Nasdaq Composite (+1.7%) settled slightly ahead of the S&P 500 (+1.5%) and the Dow Jones Industrial Average (+1.3%).
Interest rates remained in focus at the start of the session as participants mulled over a continued downturn in global bond markets. Early weakness was attributed to persistent uncertainty regarding the future path of global monetary policy. Recall that last week the European Central Bank disappointed investors by voting to leave its monetary policy stance unchanged. Furthermore, ECB President Mario Draghi indicated that the Governing Council did not discuss expanding the asset purchase program at the central bank's latest meeting.
Equity indices shook weakness in the opening hour of trade as Atlanta Fed President (non-FOMC voter) Dennis Lockhart and Minneapolis Fed President (non-FOMC voter) Neel Kashkari struck divergent tones on the future path of interest rate normalization. Mr. Lockhart signaled that recent data seriously warrants the discussion of raising rates. However, Mr. Kashkari stated that there's no urgency in raising rates at this time.
The major averages notched fresh session highs shortly after Fed Governor Lael Brainard reaffirmed her dovish stance. Governor Brainard stated that the case for preemptive tightening is less compelling given persistently low inflation and continued slack in the labor market. Ms. Brainard continues to advocate a cautious approach given the limited nature of the Fed's policy toolkit. In response, the implied probability of a rate hike at the September meeting fell to 15.0% from 24.0% in the prior session.
The benchmark index settled near its best level of the day, testing resistance near the 2160 price level. All ten sectors ended in the green with technology (+1.7%), utilities (+1.7%), consumer staples (+1.9%), and telecom services (+2.0%) leading the pack. On the flipside, the commodity-sensitive energy (+0.9%) and materials (+1.0%) sectors finished at the bottom of the leaderboard.
The defensively-oriented consumer staples sector (+1.9%) outperformed as the group recovered from last Friday's 2.1% decline. In the group, Dow component Wal-Mart (WMT 71.94, +1.64) demonstrated relative strength after being upgraded to "Outperform" from "Market Perform" at Cowen. Meanwhile, Philip Morris International (PM 100.64, +3.10) ended higher by 3.2% after Goldman added the stock to its conviction buy list. The broader sector trimmed its month-to-date loss to 1.4%.
In the technology sector (+1.7%), HP (HPQ 14.49, +0.54) gained 3.9% after announcing that it will acquire Samsung's (SSNLF 1250.00, 0.00) printer business for approximately $1.05 billion. Meanwhile, Apple (AAPL 105.44, +2.31) gained 2.2%, recovering from last week's 4.3% decline. The stock was under pressure after unveiling its iPhone 7 device last Thursday. The PHLX Semiconductor Index finished higher by 2.0%, narrowing its month-to-date loss to 2.2%.
Biotechnology outperformed in the health care space (+1.6%), evidenced by the 3.0% gain in the iShares Nasdaq Biotechnology ETF (IBB 287.11, +8.48). In the ETF, Mylan Labs (MYL 41.33, +1.44) rebounded 3.6%. The sub-group also benefited from reports that activist investor Starboard has taken a 4.6% stake in Perrigo (PRGO 95.23, +6.52).
The financial sector (+1.2%) ended behind the broader market as investors trimmed rate hike expectations and as Treasury yields pulled back. In the group, Wells Fargo (WFC 48.54, -0.18) underperformed as the stock continues to see weakness from last Thursday's settlement with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the Office of the LA City Attorney.
Treasuries ended modestly higher, recovering from relative weakness at the start of the session. The yield on the 2-yr note fell two basis points to 0.77% while the yield on the 10-yr note ticked down to 1.67% (-1 bps).
Today's participation was above the recent average as more than 992 million shares changed hands on the NYSE floor.
There was no economic data of note released today.
Tomorrow's economic data will be limited to the Treasury Budget for August, which will be released at 14:00 ET.
Russell 2000: +8.6% YTD
S&P 500: +5.6% YTD
Dow Jones: +5.2% YTD
Nasdaq: +4.1 % YTD
DJ30 +239.62 NASDAQ +85.98 SP500 +31.23 NASDAQ Adv/Vol/Dec 2074/1.832 bln/789 NYSE Adv/Vol/Dec 2159/992.3 mln/843 3:30 pm :
The dollar index was down -0.2% around the 95.16 level
Commodities, as measured by the Bloomberg Commodity Index, were nearly flat (+0.07%) around the 84.08 level
Crude oil closed a volatile session near highs of the day ahead of tomorrow's monthly IEA report
October crude oil futures rose $0.41 (+0.9%) to $46.29/barrel
Monthly IEA data will be released tomorrow morning
API data will be released tomorrow after the bell
Weekly EIA data will be released Wed at 10:30 am ET
Rig count data will be released Friday at 1 pm ET
The next OPEC meeting will take place in Algiers, Algeria from Sept 26-28
Contributing factors affecting the price of oil include:
OPEC released its monthly market report this morning, revised FY17 non-OPEC supply estimates upward by 0.35 mb/d to 56.52 mb/d.
Non-OPEC oil supply in 2016 is now expected to contract by 0.61 mb/d, following an upward revision of 0.18 mb/d from the August MOMR to avg 56.32 mb/d. This has been mainly due to a lower-than-expected decline in US tight oil and a better-than-expected performance in Norway, as well as the early start-up of Kashagan field in Kazakhstan.
World oil demand growth in 2016 is now anticipated to increase by 1.23 mb/d after a marginal upward revision, mainly to reflect better-than-expected OECD data for the first half of the year. Oil demand in 2016 is expected to avg 94.27 mb/d.
Demand for OPEC crude in 2016 is estimated to stand at 31.7 mb/d, some 1.7 mb/d over last year. In 2017, demand for OPEC crude is forecast at 32.5 mb/d, an increase of 0.8 mb/d over the current year.
Natural gas erased all of Friday's losses, closed near 2-week highs
October natural gas closed $0.12 higher (+4.3%) at $2.91/MMBtu
Weekly EIA inventory data will be released Thursday at 10:30 am ET
In precious metals, gold & silver closed lower for the fourth consecutive session, despite the dollar index declining
December gold ended today's session down $9.00 (-0.7%) to $1325.60/oz
December silver closed today's session $0.36 lower (-1.9%) at $19.00/oz
Today's session began on a lower note as participants responded to a downturn in global markets. Equities pulled back overnight, picking up where U.S. markets left off on Friday. The mover lower was facilitated by growing uncertainty regarding the path of global monetary policy and rising interest rates. Recall that Treasuries tumbled following Thursday's disappointing policy statement from the European Central Bank. The central bank opted to maintain its monetary policy stance, leaving interest rates and asset purchases unchanged.
The broader market trimmed losses in the first hour of trade as participants mulled recent commentary from Atlanta Fed President (non-FOMC voter) Dennis Lockhart and Minneapolis Fed President (non-FOMC voter) Neel Kashkari. President Lockhart indicated that incoming data warrants a serious discussion regarding a potential interest rate hike while President Kashkari believes there's no urgency in raising rates at this time. Both Fed officials took a somewhat standoffish approach, offering no real time table. In response, the implied probability of a rate hike at the September meeting fell to 21.0% from 24.0% in the prior session.
The Monday session was capped off with firm gains as all three major US indices posted a recovery off last week's weakness. Leading the charge higher, the Nasdaq Composite gained just shy of 86 points (+1.68%) to 5211.89. The S&P 500 added a solid 31.23 points (+1.47%) to 2159.04, and the Dow Jones Industrial Average was hampered (albeit modestly) by early weakness in the energy complex, specifically as October crude oil futures rallied off morning lows to end up $0.41 (+0.9%) to $46.29/barrel. To that end, the Dow staved off selling pressure to advance 239.62 points (+1.32%) to 18325.07.
Technology (XLK 46.93, +0.77 +1.67%) finished the first trading day of the week firmly in the green. Component HP Inc. (HPQ 14.49, +0.54 +3.90%) was the strongest gainer today following the acquisition of Samsung Electronics (SSNLF 1250, flat) printer business for $1.05 billion plus equity investment payments through open market purchases. Other sectors as measured by the S&P ended the day IYZ +3.35%, XLP +1.88%, XLU +1.77%, XLV +1.48%, XLY +1.40%, XLI +1.28%, XLF +1.12%, XLE +0.99%, XLFS +0.97%, XLB +0.95% with all areas showing strength.
In the S&P 500 Information Technology sector (781.81, +13.05 +1.70%), trading jogged higher and higher as the session progressed, ultimately ending near highs. Component Microsoft (MSFT 57.05, +0.84 +1.49%) finished with an equally impressive session of its own following recent weakness as news that the company entered a six-year agreement with HP Inc. (HPQ) to deploy Dynamics to HPQ employees drove the stock higher. Other names in the space which out-performed included ADS +3.75%, ATVI +2.77%, LRCX +2.63%, AMAT +2.53%, NTAP +2.51%, QRVO +2.44%, SWKS +2.37%, AVGO +2.30%, XRX +2.29%, MCHP +2.29%, AAPL +2.24%.
Other notable news items among sector components:
HP Inc. (HPQ) to acquire Samsung Electronics Co., Ltd.'s (SSNLF) printer business in a deal valued at $1.05 billion. The acquisition is expected to be accretive in the first full year following closing, with cost synergies and a strong financial model. The transaction is expected to close within 12 months pending regulatory review and other customary closing conditions. After closing, Samsung has agreed to make a $100 million to $300 million equity investment in HP through open market purchases.
Microsoft (MSFT) entered a six-year agreement with HP Inc. (HPQ) to deploy Microsoft Dynamics to thousands of employees across HP, dramatically enhancing collaboration across marketing, sales and service operations. With Dynamics, as well as Azure, Office 365 and other Microsoft Cloud solutions, HP has invested in the sales and service collaboration platform it needs to deliver a seamless sales experience for customers and partners while increasing the company's performance and economies.
Qualcomm (QCOM 62.25, +1.73 +2.86%) announced the opening of Qualcomm Communication Technologies (Shanghai) Co. Ltd., a semiconductor test facility in the Waigaoqiao (WGQ) free-trade zone in Shanghai, and its first foray into providing manufacturing services for semiconductors.
CSRA (CSRA 26.78, +0.58 +2.21%) was awarded a contract to continue providing systems engineering and technical assistance support for the Joint Integrated Air and Missile Defense Organization (JIAMDO). The single-award contract was won as a recompete and is valued at $53 million, over a five-year period.
Oracle (ORCL 40.68, +0.65 +1.62%) extended its tender offer in connection with the acquisition of
NetSuite (N 110.05, +0.04 +0.04%) until October 6 to facilitate the completion of outstanding antitrust reviews.
Sanofi (SNY 39.82, +0.63 +1.61%) and Verily Life Sciences LLC, (formerly Google Life Sciences), an
Alphabet (GOOGL 798.82, +10.34 +1.31%) company, announced the launch of Onduo, a joint venture created through Sanofi and Verily's diabetes-focused collaboration.
Equinix (EQIX 366.00, +3.22 +0.89%) was selected by the Monet Submarine Cable investors to provide U.S. facilities and services for the next-generation cable landing station architecture to support the Monet Submarine Cable System. Monet is a planned submarine cable that is currently designed to deliver over 60 terabits of capacity between the U.S. and Brazil. Monet is owned by Algar Telecom, Angola Cables, Antel and Alphabet's (GOOGL) Google.
Elsewhere in the tech space:
Verizon (VZ 52.57, +0.75 +1.45%) acquired Sensity Systems. Financial terms of the deal were not disclosed.
SolarCity (SCTY 17.80, +1.03 +6.14%) raised $305 million in its second cash equity transaction. A private investment fund affiliated with Quantum Strategic Partners Ltd. and advised by Soros Fund Management LLC provided the equity investment in a portfolio of residential, commercial and industrial solar projects. The transaction also included a fully amortizing, 18-year loan that was syndicated to five high-quality institutional investors.
MediaNews Group Inc., the largest shareholder of Monster Worldwide (MWW 3.52, +0.08 +2.33%), with an ownership interest of 11.6% of Monster's outstanding shares, delivered an open letter to Monster shareholders. Among other points, the shareholder noted, "We want to reiterate that we will not tender our shares in the current tender offer and we intend to exercise our appraisal rights to receive the actual value of our shares -- not the undervalued Randstad price -- in the event the current Randstad deal closes."
Open Text (OTEX 65.15, +5.38 +9.00%) to acquire Dell EMC's Enterprise Content Division, including Documentum for $1.62 billion. ECD offers a suite of leading Enterprise Content Management solutions with deep industry focus, including the Documentum, InfoArchive, and LEAP product families. The company expects the deal to be immediately accretive to earnings and sees the closing of said deal within 90-120 days.
Syntel (SYNT 45.72, +5.03 +12.36%) announced that its Board of Directors has declared a special cash dividend of $15 per share. In connection with the one-time repatriation, the Company expects to recognize a one-time tax expense of about $264 million (net of foreign tax credits) in the third quarter of 2016. The special cash dividend will be funded through dividends to the company by U.S. subsidiaries, the one-time repatriation of about $1.24 billion of cash held by the company's foreign subsidiaries and a portion of borrowings under a new senior credit facility. The company has expanded its borrowing capacity to $500 million under the new senior credit facility while paying in full and terminating the $200 million prior existing senior credit facility. In connection with the one-time repatriation, the company expects to recognize a one-time tax expense of about $264 million (net of foreign tax credits) in the third quarter of 2016. As a result of the additional tax expense and anticipated changes to "other income" which will result from the issuance of the special cash dividend, the company is revising its outlook for 2016 EPS from the previously announced $2.55 to $2.70 earnings per share to a loss of $0.60 to $0.75 per share. There is no update at this time to the outlook for 2016 revenue or margins.
Tesla Motors (TSLA 198.30, +3.83 +1.97%) detailed Autopilot Version 8 in blog post, stating onboard radar will be used to provide 'more advanced signal processing'.
TerraForm Global (GLBL 3.58, -0.08 -2.19%) and TerraForm Power (TERP 13.28, +0.12 +0.91%) received non-compliance Nasdaq letters and requested hearings.
Intelsat S.A. (I 2.83, +0.18 +6.79%) powered by its satellite backbone, updated the in-service date for the Intelsat 33e satellite, successfully launched on 24 August 2016. The in-service date is being adjusted from fourth quarter 2016 to first quarter 2017.
NXT-ID (NXTD 3.40, -0.69 -16.85%) announced the effective date of a 1:10 reverse stock split. The reverse split became effective after the close of trading on NASDAQ on Friday, September 9, 2016. The shares began trading on a split-adjusted basis commencing at the open this morning.
Dangdang (DANG 6.60, +0.07 +1.07%) shareholders approved the going private transaction at $6.70 per share, and the company expects transaction to close as soon as practicable.
Analyst actions:
P was upgraded to Buy from Neutral at SunTrust;
TRUE, RUBI were downgraded to Underweight from Equal Weight at Morgan Stanley,
PAY was downgraded to In-Line from Outperform at Imperial Capital;
PANW was initiated with a Buy at Rosenblatt,
DMD was initiated with a Buy at Craig Hallum
AI
