From Briefing.com: 4:30 pm : Stocks sported solid gains for the entire session as a batch of positive news items brought buyers into action. However, afternoon trade became rather subdued as the stock market entered a familiar sideways drift.
Global indices got an overnight lift from news that Abu Dhabi has supplied Dubai's corporate flagship, Dubai World, with $10 billion. Several weeks ago Dubai World had requested to freeze its debt payments amid a lack of liquidity. By doing so, Dubai World had rekindled concern about the security of global credit markets.
On a related note, Standard & Poor's lowered its foreign currency sovereign credit rating and local-currency credit rating on Mexico. The announcement follows several other downgrades and cautionary comments made by ratings agencies in the last two weeks.
Speculation of a pick up in merger and acquisition activity helped win support for stocks this session. That was caused by a move by ExxonMobil (XOM 69.69, -3.14) to acquire XTO Energy (XTO 47.86, +6.37) in an all-stock transaction valued at $41 billion. Since that values XTO at $51.69 per share, a premium of roughly 25% over its closing price this past Friday, several related plays in the oil and gas exploration industry (+6.4%) garnered support. Integrated oil and gas stocks (-2.1%) fell out of favor, though, and hampered the broader energy sector (+0.2%).
Financials lagged in the early going, but managed to attract buyers as the session progressed and finished with a 0.6% gain. The sector's slow start stemmed from concerns of shareholder dilution at Citigroup (C 3.70, -0.25), which announced it will repay its $20 billion in TARP securities and terminate its loss-sharing agreement with the government with an issue of $17.0 billion of common stock, with an over-allotment option of $2.55 billion, and $3.5 billion of tangible equity units made up of prepaid common stock purchase contracts and subordinated notes. Meanwhile, the Treasury will unwind its approximate 34% stake in the company.
Citigroup's announcement has given rise to speculation that other TARP recipients like Wells Fargo (WFC 25.49, +0.08) and PNC Financial (PNC 53.36, +0.61) may soon announce repayment plans.
Renewed selling pressure against the U.S. dollar took the Dollar Index down 0.3% and provided broad support for stocks. However, the dollar's decline was particularly beneficial to materials stocks, which climbed 1.5% as commodities prices fell to a 1.0% loss, according to the CRB Commodity Index.
Gains were broad for the entire session, but action was a bit choppy in the early going. Things steadied in the afternoon so that stocks could make a solid close, though. Telecom was the only major sector in the S&P 500 to finish with a loss; it declined just 0.1%.
Advancing Sectors: Materials (+1.5%), Industrials (+1.2%), Consumer Discretionary (+0.9%), Health Care (+0.9%), Tech (+0.9%), Financials (+0.6%), Utilities (+0.4%), Consumer Staples (+0.3%), Energy (+0.2%)
Declining Sectors: Telecom (-0.1%)DJ30 +29.55 NASDAQ +21.79 NQ100 +1.0% R2K +1.6% SP400 +1.5% SP500 +7.70 NASDAQ Adv/Vol/Dec 1838/1.86 bln/883 NYSE Adv/Vol/Dec 2268/1.07 bln/780
4:05PM Rambus acquires patented innovations and technology from Global Lighting Technologies for $26 mln (RMBS) 21.53 +0.02 : Co announces that announced it has acquired technology and a portfolio of advanced lighting and optoelectronics patents from Global Lighting Technologies Inc. (GLT). These patented innovations, which include MicroLens light distribution technology, broaden Rambus' solutions for computing and consumer electronics. As part of this agreement, Rambus will pay GLT $26 mln. In addition, it is expected that twelve people will join Rambus from GLT including Jeff Parker, GLT's co-founder, former chief executive officer and principal inventor. Most of those joining from GLT will form a new Lighting Technology Division led by Mr. Parker.
4:05PM JA Solar expects Q4 2009 shipments to exceed prior guidance; issues FY10 shipment guidance (JASO) 5.30 +0.73 : Co announces that based on current customer orders and product deliveries, it expects Q4 shipments to exceed the high-end of its prior guidance given on Nov 10, 2009. Co is raising its guidance for FY09, and issuing shipment guidance for the FY10. Based on strong customer demand for JA Solar's products, co currently expects shipments for Q4 to exceed 210MW, compared with prior guidance in the range 170MW to 200MW. For the full year 2009, the company expects shipments to exceed 488MW, compared with prior guidance in the range of 448MW to 478MW. For the FY10, co currently expects shipments to be in the range of 750MW to 800MW. "We continue to make progress in our global customer development, and are seeing strong demand for our high quality solar products from all major markets, including Germany, China, U.S., Italy, South Korea, Spain and France. We also expect strong growth from our newer markets, such as the Czech Republic and Japan," said Baofang Jin.
8:00AM California Micro to be acquired by ON Semiconductor for $4.70/share in all cash tender offer (CAMD) 3.05 : ON Semiconductor (ONNN) and CAMD announced the signing of a definitive merger agreement pursuant to which ONNN will acquire CAMD through a cash tender offer of $4.70 per share. With net cash, cash equivalents and short-term investments of approximately $45 million at the end of November 2009, the transaction value of CAMD represents an enterprise value of approximately $63 million and an equity value of approximately $108 million, based on common stock outstanding and issued. The proposed transaction and related merger agreement have been approved by each company's board of directors... ONNN will finance the acquisition using existing cash resources and the closing of the transaction is not contingent on the receipt of financing. The companies expect the transaction to close in the first quarter of 2010. Upon closing, ON Semiconductor may record a one-time charge for purchased in-process research and development expenses and other deal related costs. The amount of that charge, if any, has not yet been determined. "Given the significant synergies we expect to realize from this combination, we anticipate that the acquisition will be accretive to earnings per share within the first year post the transaction close." (stock is halted)
3:16AM LDK Solar signs contract to supply solar modules to Belgium-based Enfinity; co will deliver approx 50 MW of solar modules to Enfinity in 2010 (LDK) 8.56 :
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