Alcoa Rises on Deal Speculation

Applebee's hires banks to explore a possible sale, and more of Tuesday's stocks in the news

Alcoa (AA) shares were seen higher on speculation the aluminum giant could be buyout target. The Times of London reports that BHP Billiton and Rio Tinto have drawn up plans for a $40 billion takeover of Alcoa.

Applebee's International (APPB) hires Citigroup Global Markets LLC and Banc of America LLC as financial advisors to explore alternatives for enhancing shareholder value, including possible recapitalization or sale of the restaurant chain.

Onyx Pharmaceuticals (ONXX) advanced after Banc of America raised its $19 price target on the shjares to $37, maintains buy. On Monday, the company and Bayer (BAY) reported positive results from Phase 3 trial of Nexavar tablets in patients with advanced hepatocellular carcinoma.

Caremark RX (CMX) and CVS (CVS) announce an increase in value of their proposed merger for Caremark shareholders by increasing a special cash dividend payable to Caremark holders following the merger with CVS to $6.00 per share from previously announced $2.00.

3M (MMM) was up after the company said it would repurchase as much as $7 billion of its shares. Separately, Deutsche Bank lifted its price target on the stock by 3.4% to $90 per share.

Merrill Lynch upgraded General Motors (GM) to buy from sell. (PCLN) posted fourth-quarter earnings per share (pro forma) of 58 cents, vs. 28 cents a year ago, on a 28% revenue rise. It sees 22-30 cents first-quarter EPS (pro forma), and $2.60-$2.90 for 2007. S&P reiterates buy and raised its estimate, while Piper Jaffray also increased its estimates.

Marsh & McLennan (MMC) was modestly higher after the insurer said fourth-quarter profits rose six-fold to $226 million.

Ceridian Corp. (CEN) retains financial advisors to explore a broad range of alternatives to enhance shareholder value.

Johnson & Johnson (JNJ) says it discovered potentially improper payments related to sales of medical devices in two countries outside U.S., and the head of its device/diagnostic unit has resigned. S&P downgraded the stock to buy from strong buy.

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