You Know The Main Companies In The Merger, But Consider This Stock…
Stocks are higher on a mega
merger.
Sears
(
S |
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PowerRating) and KMart
(
KMRT |
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PowerRating) are merging! The $11 billion
deal will create a combined company called Sears Holdings, which will be the #3
US retailer (behind Wal-Mart and Target), expected to generate
$55 billion in annual revenues.
Kmart stockholders will receive one share of new Sears Holdings common stock for
each Kmart share. Sears shareholders can choose between $50 in cash or 0.5 of a
share of Sears Holdings for each Sears share. The merger is expected to close in
March 2005.
Two weeks ago, Vornado bought a 4.3% interest in Sears. Martha Stewart Living
(
MSO |
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PowerRating) is also trading up on the news, as her products will now get exposure
at Sears.
Edward Lampert of ESL Holdings owns 14.6% (31 million
shares) of Sears, 53% (42 million shares) of KMart, and also has stakes in
Autozone
(
AZO |
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PowerRating), AutoNation
(
AN |
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PowerRating) and MCI
(
MCIP |
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PowerRating).
Mr. Lampert will be the Chairman of the new Sears Holdings and is the cover
story of the November 22 issue of Business Week.
October CPI was +0.6%, more than expected and the
biggest jump since May; ex-food/energy was +0.2%. Based on this data and
yesterday’s PPI, producer prices are rising faster (year/year) than companies
are able to pass on to the consumer, which means that companies may be being
squeezed. Housing starts were 122M to 2.027 million. Capacity utilization is the
highest since May 2001.
Trader Talk: Earnings decelerating, and
post-election euphoria will be gone in January.
The EIA said oil inventories rose 800,000
barrels, distillates fell 1 million barrels; gasoline stocks fell 400K barrels.
Hewlett Packard
(HPQ)
beat by 0.04 and beat on revenues. The company said profits rose 27%.
Motorola
(
MOT |
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PowerRating) said handset sales will grow faster in 2005. The
company lost market share in Q3.
The Mortgage Banker’s Association said that new loan
applications rose 10.6% last week. 30-year mortgages averaged 5.70%.
You knew it was too good to be true. TiVo
(
TIVO |
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News |
PowerRating) will begin adding pop up ads to their service beginning in March.
American Airlines is removing pillows from all its planes; the move is
expected to save time and money.
On this day in history:
1869 Suez Canal opened
1913 Panama Canal opened
1973 Nixon told reporters "I’m not a crook"
1993 The House approved NAFTA
| Dow | +112.02 | 10559.67 |
| S&P 500 | +12.62 | 1188.05 |
| Nasdaq | 31.55 | 2110.17 |
Strong sectors are: Semis
(
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+3.92%, Gold
(
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(
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Weak sectors are: Utilities
(
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PowerRating)
-0.45%.
The dollar is -0.42 at 83.38
Gold is +4.90 at 444.40
Crude Oil is +0.10 at 46.30
1.28 billion on the Nasdaq.
Market breadth is negative.
| NYSE | Issues | |
| Advancing | 2489 | Up Vol 723 |
| Declining | 730 | Down Vol 119 |
| Ratio | 3.40 | 6.07 |
| Nasdaq |
||
| Advancing | 2231 | Up Vol 1043 |
| Declining | 797 | Down Vol 181 |
| Ratio | 2.79 | 5.76 |
Stocks in the News
Network Appliance
(NTAP)
beat by 0.02 but was light on revenues.
Google (GOOG)
had 39.1 million shares unlocked and available for sale yesterday. The lockup
expiration more than doubles the shares available to trade. Over the next three
months, 277 million more shares will become eligible to trade.
SBC Communications
(
SBC |
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Chart |
News |
PowerRating) inked a $400 million deal with Microsoft for next generation TV services.
Applied Materials
(
AMAT |
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Chart |
News |
PowerRating) reports after the close. Estimates are
0.26.
Medtronic
(
MDT |
Quote |
Chart |
News |
PowerRating) reports after the close. Estimates are 0.45.
Brice Wightman