Monday, June 13, 2011

Markets rise on merger Monday

Dow rose 24, advancers ahead of decliners 5-4 & NAZ was flat. Bank stocks were a little higher on bargain hunting

S&P 500 Financials

Value	200.17
Change	0.97 (0.5%)

The MLP index fell 1 to the 362s after 2 days of big gains & the REIT index was up 1+ to the 233s following a rough time last week. Junk bond funds were mixed following losses last week & Treasuries were a little soft. But the yield on the 10 year Treasury is holding under 3%. Oil declined for a 2nd day before reports that may show slowing economic growth in the US & China, curbing fuel demand in the world’s 2 largest crude consumers. Gold dropped to a one-week low on sales by some investors to cover losses in equity markets.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month	0.041%
U.S. 2-year	0.408%
U.S. 10-year	2.984%

CLN11.NYM

....Crude Oil Jul 11

...98.46

...

0.83 (0.8%)

GCM11.CMX

...Gold Jun 11

.....1,525.50

...

3.10

(0.2%)

VF Agrees to Acquire Timberland Co. for $43 a Share

Photo: Bloomberg

VF Corp, with brands including Wrangler, Nautica & The North Face, will buy boot & clothing maker Timberland (TBL) for more than $1.8B. VFC will make Timberland (TBL) part of its outdoor & actions sports business. Then the outdoor & action sports business, which also includes Vans, Jansport & Eastpak, will make up 50% of the company's total revenue should grow to 60% by 2015. VFC is offering $43 for each TBL share, 43% above Fri's close. TBL is expected to have about $1.6B in sales in 2011 & it is targeting for annual revenue growth of 10%. The deal will add 25¢ to EPS & $700M to revenue in 2011 & is expected to add 75¢ cents to EPS next year. VFC will expand TBL apparel offerings & spur growth overseas in countries such as China. TBL shot up to just under the $43 offering price & VFC rose $9.78 on the expected higher earnings.

VF to Acquire Timberland for $1.8 Billion

V.F. Corporation (VFC)

Apple, with the 2nd largest market cap in the world, is feeling the effects of problems from its rapid success. An employee is starting a drive to unionize retail workers for better wages & benefits & address what are called unfair practices in AAPL glass-and-steel retail showrooms. This is surprising because unions are largely unheard of in Silicon Valley companies, which are quick-footed & having the flexibility to hire & fire. AAPL has more than 30K retail employees in 325 stores around the world. While this may be only a minor problem that will not last long, the company will suffer from growing pains (as have the other industry leaders in technology). The stock has been in a fairly narrow range (325-360) all year, today it's up 1+ to the 327s.

Apple employee seeking union: Reportat The Wall Street Journal

Apple Inc. (AAPL)

This is a sleepy kind of day with the VFC acquisition providing much of the excitement. The problems which dragged down stocks last week (& last 6 weeks) are still out there with no sign of being resolved. A chart for the Dow covering the last 3 months shows its lackluster performance as it gets ready to go into summer months starting next week. The falling price, flirting with 12K, is getting near the 200 moving average. The technical guys don't want to see it go below as it gets within a couple hundred points.