TheChek News Flow

(BarCap) Global Mining : Outlook remains cloudy with occasional sunny spells

Outlook remains cloudy with occasional sunny spells

* 2015 has been another bad year for the sector. The last 5 yrs have now been the worst

period of performance since 1966: Looking forward it is hard to see what might pull the

sector out of its tailspin. A demand shock seems unlikely given the state of China’s

economy, although there are some signs of near term improvement (M2, property starts,

TSF growth). Pinch points in supply/demand are getting pushed back implying marginal

costs will govern pricing for longer. Costs themselves are under negative pressure.

Meanwhile, returns on equity are sub cost of equity following unprecedented

capex/depreciation levels, and net debt as a proportion of EV is at an all time high. Finally

one has to sift through valuations to find metrics that support an investment case. So we

downgrade our sector view to Neutral (we would have reverted to our Negative call of

2013-14 if it weren’t for the recent pick up in some Chinese data, plus sector positioning).

* Stock specifics. Only Boliden and a few gold stocks have provided any positive

performance YTD. Rio Tinto screens the best still on valuation/balance sheet strength

so we upgrade to OW. We stick with OW on Glencore (commodity mix, catalyst

expectation, overly negative perception and FCF yield), but remove it as our ‘Top Pick’.

We downgrade BHPB to EW with very little valuation support and stick with AAL and

Vale as UW. We are downgrading the more leveraged Vedanta and Kazakhmys to UW.

Download globalmining_barcap_10112015.pdf

>>> Eurasia Drilling minority shareholder UCP opposes buyout, unsatisfied with

Eurasia Drilling minority shareholder UCP opposes buyout, unsatisfied with price

United Capital Partners (UCP), a private investment group is opposing the announced share buyout of the listed Russian oil services firm Eurasia Drilling Company Limited (EDC), and intends to refuse to participate in the offer, reported Vedomosti.

The Russian daily cited a statement by UPC, the owner of an 1.85% stake in EDC. UPC is unsatisfied with the price offered, the item reported.

In October 2015, EDC put an item for an agenda of an extraordinary meeting on the buyout of the company shares by the majority shareholders and top managers from the minority shareholders, at USD 11.75 per share. Subsequently, the shareholders seek to delist Eurasia Drilling’s GDRs from the London Stock Exchange. The EGM will take place on 13 November, the article reported.

The paper noted, citing the UCP statement, that the offered price is understated, given the fact that at the beginning of the year Schlumberger wanted to acquire EDC offering USD 22 per share.

The paper reported that previously, the buyout price was also questioned by investment fund East Capital.

Vedomosti

>>> What to look at today - 10th of November 2015

Dow-1% S&P-0.90% Nasdaq-1.01% Russell-1.24% VIX 16.38 (+14.31%)

US Market closed lower. Release of China Trade balance over the week edn weighted on the sentiment, China's trade data, which showed a 10-yr high in the trade surplus, but exports fell 6.9% in October, representing the fourth consecutive monthly drop. Nine sectors ended the day in negative territory with losses between 0.7% (consumer staples) and 1.5% (energy) while the utilities space climbed 0.3%. energy (-1.5%) represented an early pocket of strength, but the group retreated alongside the broader market while crude oil lost 1.0%, sliding to $43.87/bbl. The energy sector narrowed its November gain to 0.9%, masking a 13.2% surge in Apache (APA 53.94, +6.27) after Bloomberg reported that the company received and rejected an unsolicited $18-billion takeover offer. Canadian Pacific (CP 142.18, +7.87) is interested in Norfolk Southern (NSC 88.67, +8.80). Shares of NSC soared 11.0%. Volume were in line with average @ 900mil shares. US After HoursSCLN +25.2%, PFSW +16.4%, MDR +14.3%, LF -23.6%, SGMS -20.1%, XONE -16.7% following earnings/guidance,TAL +8.9% (to merger with Triton Container), MDC +15%. Asian equity markets tracked more cautious sentiment on Wall St, where investors continued to take profits from a month-long rally after stronger than expected non-farm payrolls last week boosted expectations of rate liftoff next month and a potentially faster pace of tightening next year. China inflation didn't help the sentiment, these data opened the door to more easing from PBoC. Japan current account was in surplus for the 15th straight month but the balance was well below expectations. Econ Min Amari and PM Abe discussed reducing Japan corporate tax rates by wider than expected margin to boost corporate investment.

Nikkei +0.15% Hang Seng -1.23% Shanghai +0.04%

Eur$ 1.0745 JPY 123.32 CNY 6.3604 GBP 1.5114 CHF 1.0045 RUB$ 64.4776 WTI $44.11 (+0.55%)

S&P +0.18% EuroStoxx +0.59% Dax +0.36% SMI +0.26%

Macro :

- Fed’s Rosengren Signals Readiness to Lift Rates Amid Strong Data

- *MOODY’S: MUTED GROWTH WON’T ALLOW CENTRAL BANKS TO RAISE RATES

- S&P Dow Jones to Keep China A-Shares Out of Global Benchmarks

Keep an eye on :

- AKE FP : Arkema Says 4Q to Reflect Usual Yr-End Seasonality

- ALO FP : Alstom Wins About $3b India Rail Deal for Electric Locomotives

- BP IM : UBI, Pop. Milano Execs Held Talks on Possible Merger: Messaggero

- BP/ LN : BP Says Growing Oil Demand Is ‘Good News’ Amid Oversupply

- BP/ LN : BP Sees Global Oil Prices in $60 Range for About Next 3 Years

- CEP SM : Abu Dhabi to Reduce Planned Cepsa Investments: Confidencial

- CRI FP : Chargeurs Lifts 2015 Recurring Operating Profit Target to EU27M

- COLR BB : Colruyt Family Board Member Piet Colruyt Sells EU1.34m of Stock

- DL NA : Delta Lloyd 9-Month GWP Rises; Solvency II Update to Come Dec. 2

- DWNI GY : Deutsche Wohnen 3Q FFO Rises, Sees 2015 Rent Increase of ~3.5%

- DLG GY : Elliott Plans to Vote Against Dialog/Atmel Transaction

- FGR FP : Eiffage 9-Month Rev. EU10.1b vs EU10.2b Y/y

- ELIS FP : Elis 3Q Organic Rev. Growth 4%; Repeats FY2015 Outlook

- ENGI FP : Engie Builds Its First LNG Industrial Base in Asia Through a JV

- EOAN GY : EON to Post 9-Month Loss of More Than EU5b, Handelsblatt Reports

- EVK GY : CVC Selling 8.8m Evonik Shrs in Bookbuilding, 1.9% Stake, Priced @ E32.55 (-1.97% vs yest. close)

- GVNV NA : Grandvision 3Q Rev., Ebitda Rises; Net Debt Decreases

- INW IM : EI Towers prepares bid for Telecom Italia 40% Inwit stake - Il Corriere della Sera

- BAER VX : Julius Baer 10-Month AUM +2% vs End ’14; Continued Net New Money

- JUN3 GY : Jungheinrich 3Q Sales Rise 8%, Net Up 11%; Confirms 2015 Outlook

- KPN NA : KPN To Reduce Telefonica Deutschland Stake to 15.5% from 20.5%

- LEO GY : Leoni 3Q Ebit In Line With Estimate

- MAERSKB DC : Maersk Looking Into Buying More Oil Assets, Berlingske Reports

- MONC IM : Moncler 3Q Adj. Ebitda Beats Ests., Sales In Line

- NUM FP : Numericable-SFR Accelerates Fiber Investments for French Homes

- OPERA NO : Opera Software Posts Unexpected 3Q Loss; Lowers 2015 Guidance

- PST IM : Poste Italiane 9-Mo. Rev. EU23.9b Vs EU22.6b Y/y

- RNO FP : Macron Says French State Won’t Sell Renault Stake at Loss

- RUI FP : Rubis 3Q Revenue Rises; Sees Nothing Since 1H to Affect Position

- SY1 GY : Symrise Confirms 2015 Targets, Says 4Q Started at Strong Pace

- O2D GY : KPN To Reduce Telefonica Deutschland Stake to 15.5% from 20.5%

- UCB BB : Financiere de Tubize Raising UCB Stake to 35% From 34.12%

- VK FP : Vallourec 3Q Net Loss Misses; Still Sees Positive 2015 Cash Flow

- DG FP : Orix-Vinci Wins Preferred Negotiation Status For Kansai Airport

>>> Europe : Brokers Upgrades & Downgrades - 10th of November 2015

>>> Up

*ADECCO RAISED TO HOLD AT JEFFERIES

*BANK OF IRELAND RAISED TO HOLD AT HSBC

*ERSTE BANK RAISED TO BUY VS NEUTRAL AT CITI

*HOCHSCHILD MINING RAISED TO OUTPERFORM AT RBC CAPITAL

*PORR RAISED TO BUY VS HOLD AT KEPLER CHEUVREUX

*RIO TINTO RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS

*SODEXO RAISED TO BUY VS NEUTRAL AT UBS

>>> Down

*ACACIA MINING CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS

*AFRICA OIL CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS

*BHP BILLITON CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS

*CAIRN ENERGY CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS

*DAIRY CREST CUT TO HOLD VS BUY AT JEFFERIES

*ENQUEST CUT TO SELL VS BUY AT LIBERUM

*FAROE PETROLEUM CUT TO HOLD VS BUY AT LIBERUM

*GAM HOLDING CUT TO NEUTRAL VS BUY AT CITI

*ITHACA ENERGY CUT TO HOLD VS BUY AT LIBERUM

*KAZ MINERALS CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS

*NYRSTAR CUT TO NEUTRAL VS OUTPERFORM AT MACQUARIE

*PREMIER OIL CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS

*VEDANTA CUT TO UNDERWEIGHT VS OVERWEIGHT AT BARCLAYS

>>> PT Change

>>> Initiation

*AMERISUR RESOURCES RATED NEW OVERWEIGHT AT BARCLAYS, PT 34P

*COLOPLAST RATED NEW HOLD AT HSBC, PT DKK510

*DET NORSKE RATED NEW EQUALWEIGHT AT BARCLAYS, PT NOK70

*DNO RATED NEW OVERWEIGHT AT BARCLAYS, PT NOK14

*FAROE PETROLEUM RATED NEW EQUALWEIGHT AT BARCLAYS, PT 75P

*ITHACA RATED NEW OVERWEIGHT AT BARCLAYS, PT 70P

*REXAM RESUMED OUTPERFORM VS PRIOR NEUTRAL AT MACQUARIE

*SCOUT24 RATED NEW OUTPERFORM AT CREDIT SUISSE, PT EU34.5

*SCOUT24 RATED NEW EQUALWEIGHT AT BARCLAYS, PT EU32.5

*SCOUT24 AG RATED NEW BUY AT JEFFERIES

*SCOUT24 RATED NEW NEUTRAL AT GOLDMAN; PT EU35.4

*SCOUT24 AG RATED NEW NEUTRAL AT JPMORGAN

>>> Call

>> Sector

*EUROPEAN MINING SECTOR CUT TO NEUTRAL VS POSITIVE AT BARCLAYS

>> Stock

*BERTRANDT REMOVED FROM BANKHAUS LAMPE’S ALPHA LIST

*LOOMIS ADDED TO CONVICTION LIST AT GOLDMAN, REMAINS BUY

*PKN REMOVED FROM CEEMEA FOCUS LIST AT GOLDMAN; REMAINS SELL

*TLG IMMOBILIEN ADDED TO BANKHAUS LAMPE ALPHA LIST

>>> EI Towers prepares bid for Telecom Italia 40% Inwit stake - Il Corriere dell

EI Towers prepares bid for Telecom Italia 40% Inwit stake

EI Towers, the listed Italian transmission tower group controlled by Mediaset is preparing a bid for Inwit, listed transmission tower division of Telecom Italia, Italian-language daily Il Corriere della Sera reported. The unsourced report said that the sale process is expected to start in November. However, the item said it is possible the sale could be pushed back to mid-December.

The report said that other bidders could include an alliance made up of Cellnex, the telecoms mast group in Spain that is owned by Abertis, and F2i, the Italian infrastructure fund.

As previously reported, bids could also come from American Tower and the Providence private equity fund.

As previously reported, TI is believed to be interested in selling a 40% stake in Inwit, out of the 60% it presently holds. Inwit has a market cap of EUR 2.7bn.

Il Corriere della Sera

>>> Asian Update

Asian Mid-session Update: Soft China CPI raises concern over buildup in deflationary pressure

***Economic Data***

- (CN) CHINA OCT CPI Y/Y: 1.3% V 1.5%E; 6-month low

- (CN) CHINA OCT PPI Y/Y: -5.9% V -5.9%E; 44th straight month of decline

- (JP) JAPAN OCT BANK LENDING (INCL TRUSTS) Y/Y: 2.5% V 2.6%E; BANK LENDING (EX- TRUSTS) Y/Y: 2.5% V 2.6%E

- (JP) JAPAN SEPT CURRENT ACCOUNT BALANCE: ¥1.47T V ¥2.15TE; ADJUSTED CURRENT ACCOUNT: ¥0.78T V ¥1.50TE; TRADE BALANCE: ¥82.3B (first rise in 3 months) V ¥85.3BE

- (AU) AUSTRALIA SEPT HOME LOANS M/M: 2.0% V 0.0%E

- (AU) AUSTRALIA OCT NAB BUSINESS CONFIDENCE: 2 V 5 PRIOR; CONDITIONS: 9 V 9 PRIOR

- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 116.6 v 115.2 prior

- (NZ) New Zealand REINZ Oct House Sales Y/Y: 18.6% v 38.3% prior

- (NZ) NEW ZEALAND OCT RETAIL CREDIT CARD SPENDING M/M: 0.0% V 0.3%E; TOTAL M/M: 0.0% V 0.6% PRIOR

- (NZ) New Zealand Oct Truckometer Heavy M/M: 0.9% v 1.7% prior

- (PH) PHILIPPINES SEPT EXPORTS: $4.40B V $5.13B PRIOR; Y/Y: -24.7% V -8.3%E (biggest decline in 4 years)

- (UK) OCT BRC SHOP PRICE INDEX Y/Y: -0.2% V +0.8%E (31st month of decline)

***Index Snapshot (as of 02:30 GMT)***

- Nikkei225 -0.3%, S&P/ASX -0.6%, Kospi -1.5%, Shanghai Composite +0.4%, Hang Seng -1.2%, Dec S&P500 +0.2% at 2,077

***Commodities/Fixed Income***

- Dec gold +0.4% at $1,092/oz, Dec crude oil +0.7% at $44.16/brl, Dec copper -0.3% at $2.22/lb

- IEA Monthly Report: Sees production at 5M bpd after 2020 v 4.3M bpd in 2015

- GLD: SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 666.1 tonnes; Lowest since 2008

- JGB: (JP) Japan MoF sells ¥500B in 0.1% 10-year CPI-linked Bonds; Bid-to-cover ratio: 2.21 x v 2.33x prior

- (CN) PBoC to inject CNY10B in 7-day reverse repos (37th consecutive injection)

- USD/CNY: (CN) PBoC sets yuan mid point at 6.3602 v 6.3578 prior setting; weakest Yuan setting since Oct 20th

***Market Focal Points/FX***

- Asian equity markets tracked more cautious sentiment on Wall St, where investors continued to take profits from a month-long rally after stronger than expected non-farm payrolls last week boosted expectations of rate liftoff next month and a potentially faster pace of tightening next year. Recovery in the US remains juxtaposed against less stellar datapoints in the far east. After soft China trade components released over the weekend, today's inflation data did little to dispel concerns over consumer demand. October CPI slowed to a 6-month low of 1.3% - Food component slid to 1.9% v 2.7% prior while Non-food was down slightly at 0.9% v 1.0% prior. Economists reflected on data potentially opening the door to further policy easing by the PBoC and the State Council to stimulate growth. Latest comments from PBoC Gov Zhou taken by Caixin press from his 5-yr plan statement did suggest that PBoC would look to intensify targeted measures and also improve economic policy coordination on fiscal and monetary policies.

- Japan current account was in surplus for the 15th straight month but the balance was well below expectations. YTD, however, the surplus quadrupled relative to y/y levels amid lower oil prices and weaker JPY. Economists did note that weak Asia demand for products such as steel weighed on the data. Separately, Econ Min Amari and PM Abe discussed reducing Japan corporate tax rates by wider than expected margin to boost corporate investment.

- Down under, Australia property sector data saw a modest bounce in home loans growth. NAB put out its Business Confidence and Conditions figures that were little changed from last month's levels, and NAB economists noted the findings support RBA remaining on hold for the medium term before an eventual rate hike some time in 2017.

- FX majors were generally rangebound, further consolidating outsized USD rally on Friday. USD/JPY traded in a 25-pip range above 123, AUD/USD in a 15-pip range above 0.7040, and NZD/USD in a 20-pip range above 0.6520. Copper contract was down for the 5th straight trading session, falling another 0.5% to multi-week lows of $2.21/lb.

***Equities***

US equities / ADRs:

- MDR: Reports Q3 +$0.09 adj v -$0.05e, R$806M v $780Me; +14.3% afterhours

- JIVE: Reports Q3 -$0.03 v -$0.06e, R$49.9M v $49.2Me; +9.0% afterhours

- BLCM: Reports Q3 -$0.51 v -$2.08 y/y, R$0.1M v $0.7M y/y; +8.4% afterhours

- DEPO: Reports Q3 $0.33 v $0.26e, R$105M v $103Me; +6.4% afterhours

- FSLR: Reports final Q3 GAAP EPS $3.41 (revised from prelim $3.38 reported on 10/29); Rev $1.3B v $987Me (prelim $1.3B); +1.0% afterhours

- SYF: To enter S&P 500 index, replacing GNW; Rovi demoted to S&P SmallCap 600 index from MidCap400; +0.9% afterhours

- CZR: Reports Q3 -$5.44 v -$0.22e (only 1 est.), R$1.14B v $1.02B y/y; -2.3% afterhours

- GPS: Reports prelim Q3 $0.62-0.63 v $0.67e; Rev $3.86B v $3.94Be; Reports Oct SSS -3%; -5.7% afterhours

- CPE: Announces 10M Share Common Stock Offering (15% of shares outstanding); -6.6% afterhours

- LGF: Reports Q2 -$0.19 adj v +$0.03e (unclear if comp), R$477M v $478Me; -6.6% afterhours

- BBSI: Responds to letter from Independent Auditor about a possible "illegal act": audit committee hires advisor to investigate BBSI's workers' compensation reserve; -19.9% afterhours

Notable movers by sector:

- Consumer discretionary: Toray Industries 3402.JP 0.1% (H1 result)

- Financials: Devine DVN.AU +25.6%, CIMIC Group CIM.AU -5.1% (CIMIC's offer); Eclipx Group ECX.AU -9.7% (FY15 result); OzForex Group OFX.AU +2.9% (H1 result); China Merchants Property Dev Co 000024.CN -1.3% (Oct result)

- Industrials: Incitec Pivot IPL.AU -2.5% (FY15 result); Bradken BKN.AU -5.8% (guidance); Asciano Limited AIO.AU +2.8% (receives proposal from Qube), Qube Logistics QUB.AU -3.1%

- Technology: Pegatron Corp 4938.TW +2.1% (Oct result); Universal Scientific Industrial Shanghai Co 601231.CN -1.1% (Oct result)

- Healthcare: Hanmi Pharmaceutical 128940.KR -2.7% (signs exclusive license agreemetn)

>>> US After Hours Summary: SCLN +25.2%, PFSW +16.4%, MDR +14.3%

After Hours Summary: SCLN +25.2%, PFSW +16.4%, MDR +14.3%, LF -23.6%, SGMS -20.1%, XONE -16.7% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: SCLN +25.2%, PFSW +16.4%, MDR +14.3%, NSPH +13.4%, NVRO +10.4%, BLCM +9.5%, JIVE +9%, RAX +7.8%, CALL +7.7%, CIDM +7.4%, DEPO +6.6%, RTK +5.3%, TUBE +4.7%, OPK +4.7%, AST +4.7%, ATW +4.1%, GIGA +3.3%, TROV +3.3%, TERP +2.2%, CKEC +2%, PTLA +1.7%, ARP +1.5%, AMBC +1.1%, FSLR +1%

Companies trading higher in after hours in reaction to news: MDR +15.2% (awarded a large brownfield contract by RasGas Company Limited, for offshore work in Qatar; co also reported earnings), TAL +8.9% (to merger with Triton Container), STRP +7.9% (Nikos Hecht discloses 9.2% passive stake in 13G filing), BNK +6.5% (to be acquired by Bank of the Ozarks (OZRK) in all-stock transaction valued at ~$402.5 mln, or ~$25 per C1 share), HIIQ +3.9% (named Patrick McNamee as CEO, effective immediately), AVG +3.4% (adopted a 1.6 mln share repurchase program), MNK +2.1% (co issued a statement saying it is confident in its business model; shares were down on cautious report from Citron research),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: LF -23.6%, SGMS -20.1%, XONE -16.7%, WYY -16.3%, KEYW -15.6%, TXTR -15.1%, OSTK -9.7%, GALE -8.1%, JAZZ -7.7%, DTSI -6.4%, PVA -6.3%, LGF -6%, HALO -5.5%, OMER -5.3%, GPS -5.1%, BDE -4.6%, BEAT -4.1%, PRSC -3.8%, LGND -3.2%, HEAR -2.7%, ONVO -2.6%, CZR -2.3%, MACK -1.6%, XON -1.5%, ELTP -1.3%, UTIW -1.3%, PINC -1.2%, CPRX -0.9%, AEGR -0.9%

Companies trading lower in after hours in reaction to news: BBSI -18.5% (received letter from auditor saying prior statements can no longer be relied upon, will not be in a position to complete its required review of the quarterly financials by the filing due date), GALE -8.1% (co to divest its commercial business; co also reported earnings), CPE -6.6% (announced an offering of 10 mln shares of its common stock), EQM -6.4% (commenced an underwritten public offering of 5,650,000 common units representing limited partner interests), PVA -6.3% (to be replaced in the S&P MidCap 400 by Genword Financial; to be added to the S&P SmallCap 600; co also reported earnings), ATML -4.7% (shareholder Elliot Management issued letter saying it will vote against the proposed transaction with Atmel and urges fellow Dialog shareholders to do the same), SLCA -3.2% (cut quarterly dividend by 50% to $0.0625/share from $0.125/share), MNKD -3.0% (entered into a series of stock purchase agreements to sell up to an aggregate of 50 mln shares of its common stock in a registered direct offering to selected investment funds in Israel), FRC -2.2% (announced an underwritten public offering of 3 mln shares of common stock)

The stock market began the trading week on a cautious note as persistent global growth concerns weighed on investor sentiment. The S&P 500 surrendered 1.0% while the Dow and Nasdaq posted comparable losses.

Equities retreated through the first half of the Monday session and remained near their lows into the afternoon, which kept dip-buyers on the sidelines. The cautious posture in the market took place after the weekend featured the release of China's trade data, which showed a 10-yr high in the trade surplus, but exports fell 6.9% in October, representing the fourth consecutive monthly drop.

Nine sectors ended the day in negative territory with losses between 0.7% (consumer staples) and 1.5% (energy) while the utilities space climbed 0.3%. The rate-sensitive sector eked out a modest gain thanks to higher Treasury yields; however, intraday demand lifted the 10-yr note off its low as the session wore on. As a result, the 10-yr returned to its early-morning low with the 10-yr yield rising two basis points to 2.35%.

Generally speaking, today's retreat was broad based with cyclical sectors leading the decline. Heavily-weighted consumer discretionary (-1.3%) and financials (-1.2%) ended behind seven of the remaining eight groups with the financial sector trimming its November gain to 1.5%. As for the consumer discretionary sector, the group was weighed down by a 9.6% slide in Priceline (PCLN 1311.39, -138.51) after its below-consensus guidance overshadowed better than expected results.

Elsewhere among cyclical sectors, energy (-1.5%) represented an early pocket of strength, but the group retreated alongside the broader market while crude oil lost 1.0%, sliding to $43.87/bbl. The energy sector narrowed its November gain to 0.9%, masking a 13.2% surge in Apache (APA 53.94, +6.27) after Bloomberg reported that the company received and rejected an unsolicited $18-billion takeover offer.

Also of note, industrials (-0.8%) traded among the laggards into the afternoon, but the sector was lifted ahead of the broader market during the afternoon amid reports Canadian Pacific (CP 142.18, +7.87) is interested in Norfolk Southern (NSC 88.67, +8.80). Shares of NSC soared 11.0% while the Dow Jones Transportation Average narrowed its loss to 0.3% after being down more than 2.0%.

Today's participation was a bit ahead of average with more than 900 million shares changing hands at the NYSE floor.

Tomorrow, October Import/Export Prices will be reported at 8:30 ET while the September Wholesale Inventories report will cross the wires at 10:00 ET (consensus 0.1%).

Nasdaq Composite +7.6% YTD

S&P 500 +1.0% YTD

Dow Jones Industrial Average -0.5% YTD

Russell 2000 -1.5% YTD