Stocks in the News
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Stocks in the News
Focus Firm – Altria (MO)
Altria shares declined 3.61, or 4.4%, to 78.71
(Wall Street Journal Online
September 25, 2006)
Altria shares declined 3.61, or 4.4%, to 78.71 after a U.S. federal court judge granted class-action status to a lawsuit against the companys Philip Morris USA unit and other companies. The case is being watched for any implications it could have on the companys plans to spin off its 88% stake in Kraft Foods, which was flat at 34.25. The timing of the spin off hasnt yet been announced. However, some suspect Altrias board is waiting on litigation before going ahead with its corporate restructuring plans.
Our Choice – LSE, Icap Break Off
Earlier Merger Talks
(Wall Street Journal Online
September 25, 2006)
London Stock Exchange PLC and Icap PLC, the worlds largest interdealer broker, held and broke off merger talks. The LSE has been looking at ways it can defend itself from a widely expected bid from NASDAQ Stock Market Inc.. As of Oct. 2, Nasdaq will be free under United Kingdom takeover rules to bid for the rest of the London Stock Exchange it doesnt own, following its acquisition of a 25.3% stake earlier this year. A merger between the two would create a Ј5.9 billion ($11.2 billion) firm combining the LSEs equity market and Icaps business in derivatives, fixed income and energy broking.
Strategies/asset Class insights
MarketBeat: Which Way?
(Wall Street Journal Online
September 26, 2006)
Yields on Treasury securities have dropped sharply in recent weeks in anticipation of declining inflation and a slower pace of economic growth. The all-important yield curve — the spread between 3-month Treasury bills and 10-year Treasury notes — is inverted, generally considered a harbinger of a weakening economy. At the same time, the Dow Jones Industrials are now less than 100 points from an all-time high and the S&P 500 is near its 52-week high, suggesting that whatever slowdown is to come, it wont last long.
However, the stock market, for all its strength, has been buoyant mostly in large-cap names, while other areas of the market suffer. According to Citigroup, on a scale from 1 to 100, with 100 representing a 52-week high, the Russell 2000 only merits a 66, putting it at two-thirds of its high reached in the past year; the Nasdaq-100 is at a 64, and the S&P MidCap 400 is at a 55, which suggests the advance isnt a broad one. Data from the Commodities & Futures Trading Commission on trader commitments also suggest that a turn could be in the works, as large speculators were long 33,670 S&P 500 futures as of last week — a 52-week high — which is often a harbinger of a shift in the market.
Macroeconomic Events/Conditions to watch
Domestic