U.S. Stocks Retreat as Economic Concerns Overshadow Takeovers
Aug. 23 (Bloomberg) -- Bloomberg's Courtney Donohoe reports on the performance of the U.S. equity market today. U.S. stocks fell for a third day, sending the Standard & Poor’s 500 Index to a five-week low, as concern the economy may return to recession overshadowed speculation takeovers will continue to accelerate. Bloomberg's Pimm Fox also speaks. (Source: Bloomberg)
Aug. 24 (Bloomberg) -- Nancy Havens-Hasty, president of Havens Advisors LLC, a merger arbitrage fund manager, talks about takeover bids for data-storage provider 3Par Inc. Dell Inc. is readying a sweetened offer for 3Par after its earlier bid got scuttled by a $1.6 billion proposal by Hewlett-Packard Co., according to a person familiar with the matter. Havens-Hasty, speaking from New York, also discusses BHP Billiton Ltd.'s $39 billion hostile buyout bid for Potash Corp. of Saskatchewan Inc. Havens-Hasty speaks with Bloomberg's Susan Li. (Source: Bloomberg)
Aug. 23 (Bloomberg) -- Russ Koesterich, head of investment strategy for scientific active equities at BlackRock Inc., talks about the outlook for U.S. stocks, commodities and the economy. Koesterich speaks with Pimm Fox on Bloomberg Television's "Taking Stock". (Source: Bloomberg)
Aug. 23 (Bloomberg) -- John Dorfman, chairman of Thunderstorm Capital and a columnist for Bloomberg News, talks with Julie Hyman and Mark Crumpton about his investment strategy for U.S. stocks. Dorfman also discusses the outlook for bond and equity markets. (Source: Bloomberg)
Aug. 23 (Bloomberg) -- Scott Wren, senior equity strategist at Wells Fargo Advisors, discusses his investment strategy and outlook for the U.S. equity market. Wren talks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)
U.S. stocks fell for a third day, sending the Standard & Poor’s 500 Index to a five-week low, as concern the economy may return to recession overshadowed speculation takeovers will continue to accelerate.
Caterpillar Inc. and Cisco Systems Inc. lost at least 2.5 percent to lead the Dow Jones Industrial Average lower. Hewlett- Packard Co. lost 2 percent after offering to buy 3Par Inc., sending the data-center software company’s shares up 45 percent. Potash Corp. of Saskatchewan Inc. climbed for a sixth day on speculation the fertilizer maker will get a higher takeover bid.
The S&P 500 slipped 0.4 percent to 1,067.36 at 4 p.m. in New York after climbing as much as 0.9 percent in early trading. The Dow Jones Industrial Average fell 39.21 points, or 0.4 percent, to 10,174.41. About three stocks declined for each that advanced on U.S. exchanges.
“There’s always a fear that companies might be overpaying in their M&A deals,” said Peter Sorrentino, who helps oversee $13.3 billion at Huntington Asset Advisors in Cincinnati. “Investors have become a lot more skeptical about mergers,” he said. “On top of that, there’s still a lot of concern about the macro picture. In the absence of good news on that front, you won’t get a lot of conviction from investors wanting to buy stocks. Investors are taking a defensive stance.”
The S&P 500 has tumbled 12 percent from its high for the year in April as concern the recovery is in jeopardy overshadowed better-than-estimated profit growth. Reports this week will probably show U.S. home sales fell and second-quarter gross domestic product grew even less than previously estimated, according to Bloomberg surveys of economists.
The S&P 500 ended last week trading at 12.86 times its companies’ estimated earnings, the lowest since July 6 and close to the July 2 level that preceded a 10 percent gain.
BHP Billiton, Potash
BHP Billiton’s hostile takeover offer for Potash Corp. of Saskatchewan last week has raised expectations that other companies will bid. China’s Sinochem Group and Brazil’s Vale SA have both contacted Potash as the company tries to fend off BHP’s bid, said a person with knowledge of the matter. Potash shares rose 0.4 percent to $150.20 in New York, an almost two- year high.
To contact the reporter on this story: Kelly Bit in New York at kbit@bloomberg.net.
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