Top 10 News Items 3/28-4/1: US Stocks Mark Sharpest Q1 Rally Since '99; Nasdaq/ICE Officially Get Into the Mix for NYSE; Controversy at Buffett's Berkshire
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Here is a recap of the top news items from this week on Wall Street:
1. US stocks finished the first quarter up more than 6.5 percent, the sharpest gain during the first three months of the year since 1999. The gains look even stronger when considering the issues markets have faced so far this year: building political tension across northern Africa and the Middle East (and the resulting rise in oil prices), and the worst earthquake ever recorded in Japan. Further, fear of returning debt contagion in the European markets has roiled investor confidence recently, however, compared to the turmoil in the Middle and Far East, these issues seem almost an after-thought.
2. Shares of NYSE Euronext (NYSE: NYX) jumped more than 12 percent on Friday as NASDAQ OMX (Nasdaq: NDAQ) and IntercontinentalExchange (NYSE: ICE) announced a joint proposal to acquire NYSE Euronext for $42.50 in cash and stock. The deal represents a 19 percent premium over the deal proposed by Deutsche Boerse. Under the terms of the proposed acquisition, NYSE Euronext stockholders would receive $14.24 in cash, plus 0.4069 shares of NASDAQ OMX common stock and 0.1436 shares of ICE common stock for each NYSE Euronext share.
3. An unlikely company was the target of much Wall Street controversy this week: Warren Buffett's Berkshire Hathaway (NYSE: BRK.A). Late Wednesday Buffett issued a very personal-sounding press release disclosing that David Sokol, head of a number of Berkshire units including MidAmerican, and thought to be the top candidate to fill the Oracle's shoes someday (a day we are all dreading), had resigned from the company. While Buffett discussed that Sokol had previously talked about leaving the company, the chatter began swirling as Buffett announced that Sokol purchased a large sum of Lubrizol (NYSE: LZ) shares just prior to Berkshire's purchase. Although both Buffett and Sokol have contended there was no wrong-doing in the exec's move (citing numerous reasons -- click here to see the full press release), many on the Street remain skeptical.
4. The U.S. economy added more jobs than anticipated last month, while the unemployment rate unexpectedly dropped to the new two-year low, giving hope to a long struggling labor market. The Labor Department reported Friday that payrolls increased by 216,000 in March, following a revised gain of 194,000 gain for the prior month. Economists had estimated a gain of 190,000 for last month. The unemployment rate dropped unexpectedly to 8.8 percent in March from 8.9 percent in February.
5. Cephalon (Nasdaq: CEPH) shares rallied nearly 30 percent this week after Valeant (NYSE: VRX) disclosed a $73/share bid for the company. Investors in Valeant also cheered the deal, pushing VRX shares nearly 20% higher over the week session. While the Street certainly likes the deal, analysts seem mixed.
6. SRA International, Inc. (NYSE: SRX) entered into a definitive merger agreement to be acquired by an affiliate of Providence Equity Partners for $31.25 in cash, or approximately $1.88 billion. Shares of SRA rose 9.5 percent on Friday.
7. Shares of GSI Commerce (Nasdaq: GSIC) jumped 50 percent on Monday alone following news that eBay (Nasdaq: EBAY) will acquire the company in a $2.4 billion deal. Under the terms of the agreement, eBay will pay $29.25 per common share of GSIC.
8. On the IPO front, Qihoo 360 (Nasdaq: QIHU) had a stellar first day, opening at $27 after pricing at just $14 per share. The stock continued to surge as trading kicked off and shares closed at $34. Additionally, Apollo Global (NYSE: APO) began trading and Ally Financial, formerly GMAC, issued its initial filing with the SEC.
9. The SEC charged an FDA chemist with insider trading, which generated more than $3.6 million in illicit profits. SEC alleges that Cheng Yi Liang illegally traded on confidential information about upcoming announcements of FDA drug approval decisions. Liang traded in advance of at least 27 public announcements about FDA drug approval decisions involving 19 publicly traded companies.
10. Fatal levels of radiation were detected outside reactor buildings at the Fukushima Dai-Ichi plant for the first time this weekend, Japan's Tokyo Electric Power Co. (or TEPCO) announced. A spokesman from the plant said water in a trench outside the No. 2 reactor had reached levels over 1 sievert an hour. 30 minutes of this kind of radiation exposure can lead to nausea, while four hours could be fatal within two months. The spokesman said prevention of allowing the most-contaminated water from leaking into the ground or air is the key to containing the spread of radiation beyond the plant. TEPCO stated that a partial meltdown of fuel rods at the No. 2 reactor possibly caused the jump in readings.
1. US stocks finished the first quarter up more than 6.5 percent, the sharpest gain during the first three months of the year since 1999. The gains look even stronger when considering the issues markets have faced so far this year: building political tension across northern Africa and the Middle East (and the resulting rise in oil prices), and the worst earthquake ever recorded in Japan. Further, fear of returning debt contagion in the European markets has roiled investor confidence recently, however, compared to the turmoil in the Middle and Far East, these issues seem almost an after-thought.
2. Shares of NYSE Euronext (NYSE: NYX) jumped more than 12 percent on Friday as NASDAQ OMX (Nasdaq: NDAQ) and IntercontinentalExchange (NYSE: ICE) announced a joint proposal to acquire NYSE Euronext for $42.50 in cash and stock. The deal represents a 19 percent premium over the deal proposed by Deutsche Boerse. Under the terms of the proposed acquisition, NYSE Euronext stockholders would receive $14.24 in cash, plus 0.4069 shares of NASDAQ OMX common stock and 0.1436 shares of ICE common stock for each NYSE Euronext share.
3. An unlikely company was the target of much Wall Street controversy this week: Warren Buffett's Berkshire Hathaway (NYSE: BRK.A). Late Wednesday Buffett issued a very personal-sounding press release disclosing that David Sokol, head of a number of Berkshire units including MidAmerican, and thought to be the top candidate to fill the Oracle's shoes someday (a day we are all dreading), had resigned from the company. While Buffett discussed that Sokol had previously talked about leaving the company, the chatter began swirling as Buffett announced that Sokol purchased a large sum of Lubrizol (NYSE: LZ) shares just prior to Berkshire's purchase. Although both Buffett and Sokol have contended there was no wrong-doing in the exec's move (citing numerous reasons -- click here to see the full press release), many on the Street remain skeptical.
4. The U.S. economy added more jobs than anticipated last month, while the unemployment rate unexpectedly dropped to the new two-year low, giving hope to a long struggling labor market. The Labor Department reported Friday that payrolls increased by 216,000 in March, following a revised gain of 194,000 gain for the prior month. Economists had estimated a gain of 190,000 for last month. The unemployment rate dropped unexpectedly to 8.8 percent in March from 8.9 percent in February.
5. Cephalon (Nasdaq: CEPH) shares rallied nearly 30 percent this week after Valeant (NYSE: VRX) disclosed a $73/share bid for the company. Investors in Valeant also cheered the deal, pushing VRX shares nearly 20% higher over the week session. While the Street certainly likes the deal, analysts seem mixed.
6. SRA International, Inc. (NYSE: SRX) entered into a definitive merger agreement to be acquired by an affiliate of Providence Equity Partners for $31.25 in cash, or approximately $1.88 billion. Shares of SRA rose 9.5 percent on Friday.
7. Shares of GSI Commerce (Nasdaq: GSIC) jumped 50 percent on Monday alone following news that eBay (Nasdaq: EBAY) will acquire the company in a $2.4 billion deal. Under the terms of the agreement, eBay will pay $29.25 per common share of GSIC.
8. On the IPO front, Qihoo 360 (Nasdaq: QIHU) had a stellar first day, opening at $27 after pricing at just $14 per share. The stock continued to surge as trading kicked off and shares closed at $34. Additionally, Apollo Global (NYSE: APO) began trading and Ally Financial, formerly GMAC, issued its initial filing with the SEC.
9. The SEC charged an FDA chemist with insider trading, which generated more than $3.6 million in illicit profits. SEC alleges that Cheng Yi Liang illegally traded on confidential information about upcoming announcements of FDA drug approval decisions. Liang traded in advance of at least 27 public announcements about FDA drug approval decisions involving 19 publicly traded companies.
10. Fatal levels of radiation were detected outside reactor buildings at the Fukushima Dai-Ichi plant for the first time this weekend, Japan's Tokyo Electric Power Co. (or TEPCO) announced. A spokesman from the plant said water in a trench outside the No. 2 reactor had reached levels over 1 sievert an hour. 30 minutes of this kind of radiation exposure can lead to nausea, while four hours could be fatal within two months. The spokesman said prevention of allowing the most-contaminated water from leaking into the ground or air is the key to containing the spread of radiation beyond the plant. TEPCO stated that a partial meltdown of fuel rods at the No. 2 reactor possibly caused the jump in readings.
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