Market Wrap: Job Creation Slows; Draghi Grim on Macro Outlook; IPOs Galore

October 2, 2013 5:08 PM EDT
Market wrap for October 2nd

End of the Day: S&P 500 down 1.1 to 1,693.87; Dow Jones down 58.6 to 15,133.14; Nasdaq down 3.0 to 3,815.02

* ADP's (NYSE: ADP) National Employment Report for September showed the U.S. private sector added 166,000 jobs during the month, which missed economists' expectations of 180,000 job additions. In addition, August's job gain was revised down from 176,000 to 159,000. The ADP report has taken on increased importance this week as the government's non-farm payroll report will likely be delayed due to the government shutdown.

* The European Central Bank (ECB) took no action Wednesday, keeping all key rates the same. President Mario Draghi took a grim look at the economy, saying, The U.S. budget shutdown is a risk if protracted ... At the present time, the impression one has is that it will not be so. If it were to be protracted, it would certainly pose a risk for the recovery in the U.S. and the world. And this is clearly on our minds. The euro rose versus the U.S. dollar on today's session, suggesting that traders still believe a fresh round of stimulus is a long way off.

* Monsanto Company (NYSE: MON) reported Q4 EPS of ($0.47), $0.04 worse than the analyst estimate of ($0.43). Revenue for the quarter came in at $2.2 billion versus the consensus estimate of $2.24 billion. The company also announced a definitive agreement to acquire The Climate Corporation for a cash purchase price of approximately $930 million. The acquisition combines Monsanto's leading R&D capabilities with The Climate Corporation's leading analytical expertise, accelerating the opportunity of Monsanto's Integrated Farming Systems platform and unlocking the next incremental yield opportunity for farmers.

* Three notable IPOs hit markets on Wednesday:
  • Burlington Stores (NYSE: BURL) priced its 13,333,333 common stock IPO at $17, above the expected range of $14 to $16 per share. The stock ripped higher just after trading began;

  • Empire State Realty Trust (NYSE: ESRT) opened at $13.05 after pricing 71.5shares of its Class A common stock at $13 per share, the low end of the expected $13 to $15 range. The IPO ended the session up 0.8 percent; and

  • RE/MAX Holdings (NYSE: RMAX) priced its 10 million IPO at $22, also above the expected $19 to $21 per share range. The stock opened at $22 and finished better on the session.
* Portugal Telecom (NYSE: PT) announced that it has entered into a memorandum of understanding with Oi S.A. (NYSE: OIBR), AG Tel, Bratel Brasil S.A., Pasa Participações S.A., LF Tel, EDSP 75 Participações S.A., BES and Ongoing setting out the basis for a proposed merger (the “Business Combination”) between the PT and Oi groups and the Oi Holding Companies to be combined into a single entity. For more color on the merger, click here.

* Sotheby's (NYSE: BID) was active Wednesday after Dan Loeb's Third Point hedge fund disclosed a 9.29 percent, or 6,350,000 share, stake in the company. The stake was up 61.78 percent from the 3,925,000 shares held in the latest filing. Loeb also sent a letter to Mr. William F. Ruprecht, the Chief Executive Officer. Sotheby's ended up closing 0.7 percent on the session. For the complete letter, click here.

* With the recent drop and bleak outlook for BlackBerry (Nasdaq: BBRY), Dow Jones Newswires said Wednesday that distressed-investing specialist Cerberus and the company entered into a confidentiality agreement. There has been interest from one other distressed-investment firm along with Cerberus, according to sources familiar with the sitation. While this would be a plus for both BlackBerry investors and Fairfax Capital Management, it doesn't necessarily mean that the agreement will lead to a deal. The letter of intent (LOI) signed between BlackBerry and Fairfax last week also doesn't promise anything, though Fairfax said it would acquire the rest of BlackBerry it didn't own (10 percent) for $9 per share.

* Pandora (NYSE: P) announced several metrics for the month of September 2013. Overall, listener hours rose 18 percent to 1.15 billion from September 2012, while active listeners increased 25 percent over the same period last year.

*Here is a Tesla Motors (Nasdaq: TSLA) Model S on fire.

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Daniel Loeb, Cerberus Capital, Third Point LLC, Standard & Poor's, European Central Bank, Hedge Funds, Tesla, Earnings, Definitive Agreement, IPO