The markets were up for the first time this week, with the S&P up 1.18%. The Dow was up 0.61% closing at 7837.11, while the NASDAQ was up 29.05 to close at 1590.66. Prices of the 10-year were up with yields ending the day at 2.849%. Oil was up today settling at $49.38 while June gold contracts were down settling at $885.90.
Homebuilders rose today because of the morning announcement that Pulte Homes (PHM)would acquire Centex Corp. (CTX) in a stock-for-stock deal. Pulte’s acquisition of Centex will make it the largest home builder if the $1.3 billion deal goes through. The merger looks like a sure thing as directors of both companies supported the move with a unanimous vote of approval. Shareholders of Centex will get 0.975 common shares of Pulte for each share that they own of Centex, giving Centex shareholders a 32% stake in the newly formed company. Both companies’ share prices have been hurt recently, as Pulte and Centex lost $664 million and $338.3 million respectively last quarter.
In other positive news, stocks of life insurance companies climbed on hopes that the US Treasury would also give bailout funds to companies in the sub-sector. It is expected that an announcement about expanding TARP to life insurance companies will be announced in the next several days. TARP money is reportedly going to companies like Genworth Financial (GNW) and The Hartford (HIG) because these insurers own federally chartered banks. Life insurance companies are hoping for aid from TARP because they have been hurt by the financial crisis with their portfolios greatly exposed to the financial sector and losses related to variable rate annuities. Life insurance companies rallied today with this boost of consumer confidence in the industry, but TARP funds cannot eliminate the economic crisis that the industry is facing.
In tech news today, Juniper (JNPR) was up over 12% as it announced that they were expecting lower expenses due to its cost cutting efforts. This positive news outweighed the bad news that Juniper cut its first quarter revenue outlook, as it expects lower sales to service providers. Juniper expects sales to be between $760 million and $765 million, down from previous estimates of $800 million to $830 million. The down economy has affected Juniper with a decrease in information technology spending that has led corporate clients not to purchase as much from Juniper. Juniper is scheduled to release their first quarter results on April 23rd, with analyst estimating that they will report earnings of $0.17 cents per share.
Make sure to check back Thursday, for another market recap.
- Matt Shannon
Disclosure: None
