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Stocks flip-flop, deals give stability

Monday, April 28, 2014 - 02:49

April 28 - Summary: Deals were the buzz of the day with around $150 billion in merger and acquisition activity announced Monday; Russian sanctions curb enthusiasm; Bank of America scraps cash give back plans. Conway G. Gittens reports.

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Deals, deals and more deals - helping Wall Street overcome Russian sanction fears. Stocks swung from gains to losses and back again - well not exactly for the Nasdaq. General Electric CEO Jeff Immelt was in France to talk up the merits of a $13 billion buyout of Alstom - but he may have competition from Germany's Siemens, which is expected to throw its hat in the ring as early as Tuesday. Pfizer has to top $100 billion if it wants to snap up Britain's AstraZeneca, according to analysts. The current offer was turned town. This was actually Pfizer's second proposal. Pfizer was one of the best performers in the S&P 500, climbing 4 percent and U.K. listed shares of AstraZeneca rallied over 14 percent. In separate action Forest Labs slipped slightly after proposing to buy Furiex Pharmaceuticals for less than $1.5 billion. Furiex jumped 28.6 percent on the offer. Charter Communications didn't snag Time Warner Cable, but it will get access to almost 4 million pay TV subscribers in a proposed deal with winner Comcast. The $7.3 billion cash-for-subscriber swap is Comcast's attempt to win favor with regulators on that $45 billion Time Warner Cable purchase. Charter, Comcast and Time Warner Cable all ended on the up and up. More than $150 billion in deals were put on the table on Monday alone. So what's behind all this corporate wheeling and dealing? WL Ross' James Lockhart has an idea. SOUNDBITE: JAMES LOCKHART, VICE CHAIRMAN, WL ROSS & COMPANY (ENGLISH) SAYING: "There's a lot of cash sitting on corporate balance sheets at the moment, some of which is trapped offshore/in the U.S. They are looking to put that cash to work and acquisitions are one way. The GE deal. There's a whole series of big ones happening at the moment. Animal spirits are coming back." In other developments, remember that new dividend Bank of America was going to give out - scrap that. The bank says it will not raise the quarterly dividend or boost its stock buyback program after an accounting error tied to the stress test. This is the latest black eye for the bank - sending shares down more than 6 percent. On the economic front, finally good news on housing: signed contracts for future home purchases - up for the first time in nine months. The U.S. is imposing new sanctions against Russia. Seven Russian government officials were banned from entering the U.S. and their assets frozen. 17 companies linked to Russian President Vladimir Putin - also impacted by Washington's latest effort to apply pressure on Moscow. As for European markets - stocks ended barely in the green.

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Stocks flip-flop, deals give stability

Monday, April 28, 2014 - 02:49