Market Wrap: Trading to Lower Deficits; Yahoo! May Stem Payout; Knight Cap's Busy Week to Continues

August 9, 2012 5:54 PM EDT
Market wrap-up for August 9th

End of the Day: Dow Jones down 10.5 to 13,165.19; S&P 500 up 0.6 to 1,402.80; Nasdaq up 7.4 to 3,018.64

The following is a brief summary of events moving markets today:
  • Trading...the right way: The U.S. trade deficit narrowed in June, according to the Commerce Department earlier in the session. The deficit narrowed by 10.7 percent to a seasonally adjusted $42.92 billion, besting views calling for a drop to just $47.6 billion. May's number was revised lower from $48.68 billion down to $48.04 billion.

    Exports grew 0.9 percent to $184.97 billion, while imports decreased 1.5 percent to $227.90 billion, bolstered by lower crude prices and consumption.

  • Yea...about that cash...: In a late filing Thursday, Yahoo! (Nasdaq: YHOO) hinted that cash return to investors might become non-existant under its new plan. According to an 8-K filing with the U.S. SEC: "[CEO Marissa Mayer] intends to review with the Board of Directors, among other things, the Company’s growth and acquisition strategy, the restructuring plan we began implementing in the second quarter of 2012, and the Company’s cash position and planned capital allocation strategy. This review process may lead to a reevaluation of, or changes to, our current plans, including our restructuring plan, our share repurchase program, and our previously announced plans for returning to shareholders substantially all of the after tax cash proceeds of the initial share repurchase under the Share Repurchase and Preference Share Sale Agreement we entered into on May 20, 2012 with Alibaba Group Holding Limited" [emphasis ours].

    Yahoo! shares are lower, about 3.5 percent, but not seeing as drastic of a move as you might expect. At this point, investors are probably more concerned with getting the former search giant back on solid footing and in a more profitable direction.

  • Complete with confetti frosting: National Oilwell Varco (NYSE: NOV) and Robbins & Myers (NYSE: RBN) took the M&A cake today in announcing a deal whereby National Oilwell will acquire Robbins & Myers for the handsome sum of $60 per share, putting a total value of $2.5 billion on the deal.

    Oilwell's CFO Clay Williams commented in an interview today that the company was interested in Robbins' blowout preventers, though its hydrofracking assets will also provide some benefit in the long run.

    Closing would be expected to occur in the fourth quarter of calendar 2012.

    The Carlyle Group (Nasdaq: CG) was second, with the afternoon announcement it would be acquiring TCW Group from Société Générale. For more on that merger, click here.

  • What you you have planned this week?: Knight Capital (NYSE KCG) is stil a hot topic. CEO Tom Joyce has said that the firm is at about 85 percent to 95 percent of market-making activity, while institutional trading is at 65 percent to 75 percent of the norm, and expects all lost business within a week. But a recently amended 10-Q filing stated: "We may experience additional losses and liabilities as a result of the technology issue that arose on August 1, 2012, and the event of August 1, 2012 may cause customers and counterparties to lose confidence in our systems and adversely affect our reputation, results of operations and ability to attract and maintain our business, and may also result in lawsuits, regulatory investigations and other burdensome costs for the Company."

    For more on Knight and its investor run-around, click here.

  • Further delays to QE3 imminent?: Americans filing for unemployment benefits unexpectedly fell last week, according to the U.S. Labor Department. Claims fell by 6,000 to 361,000 for the week ended August 4th, compared with expectations calling for a modest increase to 370,000 from a revised higher 367,000 the prior week.

    The bump follows additions of 163,000 nonfarm payrolls for July, one of the largest increases in months.
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