Announces plans for new operating structure; creates a new company named Alphabet Inc., of which Google will be a part- Google will become a wholly owned unit of Alphabet. Google financials to be reported separately from Alphabet- Both classes of GOOG and GOOGL shares will continue to trade- Page to be CEO of Alphabet, Brin to be Pres
The stock market began the trading week on a sharply higher note with the S&P 500 spiking 1.3% while the Dow (+1.4%) and Nasdaq (+1.2%) bookended the benchmark index.
Equity indices surged out of the gate after the overnight session featured a 4.9% spike in China's Shanghai Composite after below-consensus trade data from China was viewed as an argument in favor of more policy easing. The overnight strength carried over to the European session as regional indices rallied amid reports suggesting Greek officials and eurozone negotiators are nearing a final agreement on a third bailout package for Greece.
Once the opening bell rang on Wall Street, U.S. stocks perked up with the S&P 500 charging above its 50-day (2,096) and 100-day (2,098) moving averages. The benchmark index overtook both those levels during the opening hour, and inched to new highs during afternoon action with nine sectors ending in the green.
Cyclical sectors paced the opening rally and they continued showing relative strength into the afternoon. The industrial sector (+1.9%) was the early leader, thanks to a 19.1% surge in Precision Castparts (PCP 230.93, +37.05) after the company agreed to be acquired by Berkshire Hathaway (BRK.B 143.39, -0.16) for $235/share.
Meanwhile, another cyclical sector—energy (+3.1%)—took the lead during late morning action thanks to an intraday spike in crude oil. The energy component jumped 2.5% to $44.95/bbl with the move partially supported by dollar weakness as the Dollar Index (97.17, -0.40) fell 0.4%.
Elsewhere among cyclical groups, the top-weighted technology sector (+1.6%) settled among the leaders with chipmakers showing notable strength. The PHLX Semiconductor Index soared 2.5% with all but one component ending in the green.
Moving to the countercyclical side, the telecom services sector (+1.8%) settled ahead of the broader market while consumer staples (+0.4%), health care (+0.8%), and utilities (-0.4%) underperformed.
The utilities sector struggled throughout the day as higher Treasury yields made rate-sensitive utility stocks less appealing. The 10-yr note settled just above its low with the benchmark yield higher by seven basis points at 2.24%.
Today's participation was roughly in-line with average as 800 million shares changed hands at the NYSE floor.
Investors did not receive any economic data today, but tomorrow, preliminary Q2 productivity (consensus 1.4%) and unit labor cost (consensus -0.1%) data will be released at 8:30 ET while June Wholesale Inventories will be reported at 10:00 ET.
- Nasdaq Composite +7.7% YTD
- S&P 500 +2.2% YTD
- Russell 2000 +1.4% YTD
- Dow Jones Industrial Average -1.2% YTD
Shire CEO steps up drive to get Baxalta board talk-show* Sweetener seen needed after all-share bid rebuffed* Shire investor says would be "comfortable" at $50/share* Analyst sees combined group as potential target for PfizerBy Ben Hirschler and Sinead CruiseLONDON, Aug 10 (Reuters) - Shire Chief Executive Flemming Ornskov is stepping up his campaign to get Baxalta to the negotiating table as he pushes the benefits a $30 billion takeover offer to the U.S. biotech company's shareholders.He has a fight on his hands, with investors in newly listed Baxalta arguing he must pay more, although one person close to the Dublin-based drugmaker said there had been "encouraging feedback" from shareholders on the logic of the tie-up.Ornskov and Shire's chairwoman Susan Kilsby, a former mergers and acquisition banker, met Baxalta investors on both sides of the Atlantic at the end of last week and will continue the charm offensive this week.Shares in Shire and Baxalta both rose on Monday, helped by a bullish note from Cowen analyst Ken Cacciatore, who said a takeover did not preclude an eventual acquisition of the enlarged group by a potential suitor like Pfizer.Shire, which took the market by surprise with its move to forge the world's leading rare diseases company by buying Baxalta, also needs to reassure its own investors.Joe Walters, senior portfolio manager at Royal London Asset Management, a top 20 investor in Shire, said buying Baxalta was riskier than its previous smaller deals but he was ready to see a bump in the all-share offer, which was worth $45.23 a share at Aug. 3 market prices."Around the $50 mark is what it seems management would have to up their offer to, and I think shareholders would be comfortable, or at least mildly comfortable, at that level," he told Reuters. "But I think they would start to get a little nervous if the offer went much above that price."Rudi Van den Eynde, head of thematic global equity at European investment firm Candriam, which has exposure to both companies, was more cautious and described the proposed transaction as "somewhat negative"."We would have preferred a deal around a new, promising investigational drug instead of this major deal that comes close to empire building," he said. "Flemming Ornskov is a hard-driving and well-respected CEO and he could make this deal work, however."POISON PILLShire needs to get Baxalta talking if its proposal is to have a chance, since the U.S. group boasts state-of-the-art defences, with a "poison pill" that effectively stops unwanted suitors buying more than 10 percent and a hard-to-replace board.So far, Baxalta has dismissed the offer as significantly undervaluing the business, arguing that its shares have "not yet achieved a price level that appropriately reflects the company's value and prospects". It was only spun off from Baxter International last month.If Shire were to sweeten the offer, however, it might be open to negotiations, said one person familiar with the U.S. company.Share price fluctuations since Aug. 3 mean Shire's offer is currently worth around $42.50.($1 = 0.9139 euros) (Additional reporting by Nishant Kumar and Greg Roumeliotis. Editing by Jane Merriman)-shire-idUSL5N10L23220150810