Tuesday, April 7, 2015

Higher markets on hopes for another Greek bailout

Dow clilmbed 84, advancers over decliners 5-4 & NAZ added 26,.  The MLP index rose 1+ to the 434s & the REIT index lost 2+ to 341.  Junk bond funds hardly budged & Treasuries saw limited selling.  Oil is now above 52 & gold pulled back, but holding above 1200.

AMJ (Alerian MLP Index tracking fund)

CLK15.NYM...Crude Oil May 1551.35 Down 0.79 (1.5%)

GCJ15.CMX....Gold Apr 15...1,212.20 Down ...6.40  (0.5%)

3 Stocks You Should Own Right Now - Click Here!

The IMF is willing to be "flexible" with the package of reforms Greece has proposed to its creditors before further bailout funds are disbursed, the Greek finance ministry said.  The statement follows a meeting between Greek Finance Minister Yanis Varoufakis & IMF chief Christine Lagarde on Sun.  "Mrs Lagarde ... stressed that, in Greece's case, the Fund is willing to show utmost flexibility in the way in which the government's reforms and fiscal proposals will be evaluated," the ministry said.  It added US Treasury officials who also met with Varoufakis expressed the willingness of the US government to play the role of an "honest broker" in helping Greece strike a deal with its lenders as soon as possible.

Greek Finance Minister: IMF Willing to Show Flexibility

DuPont, a Dow wtock, said that activist investment firm Trian Fund Management's proposal to break up the chemical company would cost $4B, add continuing expenses & diminish its research capabilities.  The estimate came as DD again resisted Trian's effort to replace 4 DuPont directors, calling the investment firm's campaign "value destructive."  Trian has been pushing for months to shake up the 212-year-old chemical & agriculture conglomerate, calling for greater accountability by the board & proposing to split DD into one company focused on agriculture & nutrition & another focused on industrial materials.  DD estimated that separating the businesses would cost $4B, including expenses related to forming the 2 new companies, shifting debt & tax changes.  The added costs of doubling admin & legal functions for 2 companies & tax-related expenses also would add $1B in annual expenses.  Separating the companies also would eliminate DD's ability to develop new products using scientific research that spans its various divisions.  The stock went up 24¢.  If you would like to learn more about DD, click on this link:

DuPont: Trian Breakup Proposal Would Cost $4B

E.I. du Pont (DD)

FedEx agreed to buy Dutch parcel-delivery company TNT Express NV for €4.4B ($4.8B), predicting it can succeed where bigger rival UPS (UPS) was blocked by regulators in 2013.  TNT investors will receive €8 a share in cash, 33% more than the closing price on Apr 2, the most recent trading day.  That’s less than the UPS offer of €9.50 in 2012, a reflection in part of a deal that has fewer synergies for FDX, TNT Chairman Antony Burgmans said.  FDX, calling the purchase a “match made in heaven,” said the timing was right for the approach, with a stronger dollar & a budding European recovery.  The company has a chance to succeed where UPS failed as it has less overlap with TNT & has agreed to shed TNT’s airline operations in an effort to win approval.  “We plan to be very aggressive in the first year investing in the integration of this business,” CFO Alan Graf said.  TNT will have minimal impact on earnings in fiscal 2016 & 2017.  “We expect TNT to be very accretive to earnings thereafter.”  Adding TNT will bolster the European ground network for FedEx, the operator of the world’s largest cargo airline.  Expansion in Europe is one pillar of CEO Fred Smith’s 2012 plan to boost profit by $1.7B.  The stock jumped 5.57.  If you would like to learn more about FDX, click on this link:

FedEx Bids $4.8 Billion for TNT Two Years After Blocked UPS Deal

FedEx (FDX)

A major corp acquisition generally brings out stocks buyers, as it did today.  Even with hopeful signs, the Greek bailout is still far from a done deal.  Negotiations with Iran about its nuclear program are fuzzy at best.  Tomorrow after the close, Alcoa (AA) will report earnings to give a first glimpse of Q1 earnings.  Recent gains by the Dow have not been able to take it over 18K & that has become an important ceiling to crack thru if the bulls want to take command again.

Dow Jones Industrials

No comments: