by Marc Bastow | July 29, 2013 4:59 pm
[1]Investors returned from the weekend with eyes focused on a full calendar week’s worth of both economic and earnings news.
The week’s economic reports — which include May’s S&P Case-Shiller home price index (Tuesday), and the U.S. Employment Report for July (Friday) — got started Monday with a 0.4% drop in pending home sales, according to the National Association of Realtors.
The combination of the early news and concerns over future reports brought a wait-and-see mind-set to the markets, with all three major indices heading lower. The Nasdaq led the way down, falling 0.39% to close at 3599.14, while the S&P 500 fell 0.37% to 1685.33, and the Dow Jones Industrial Average declined 0.24% to 15521.97.
Merger news took center stage[2], as U.S. advertising giants Omnicom Group (OMC[3]) and Paris-based Publicis Group (PUBGY[4]) agreed to merge, creating the world’s largest advertising company with 130,000 employees and a market value of more than $35 billion. Surprisingly, the merger news did little for the stocks; OMC finished ahead fractionally while PUGBY finished down.
In the pharmaceutical space, Perrigo (PRGO[5]) agreed to purchase biotechnology firm Elan (ELN[6]) for $16.50 per share — an 11% premium to ELN’s Friday closing price. Perrigo investors did not like the news, however as PRGO shares fell more than 6% on the day.
Meanwhile, retailer Saks (SKS[7]) agreed to a purchase[8] by Canadian retailer Hudson’s Bay (HBAYF[9]) for $16 per share — a 4.5% premium to its Friday closing price.
Facebook (FB[10]) continued to gain following last week’s blowout earnings report, rising more than 4% to get within 7% of its IPO price.
Caterpillar (CAT[11]) stock bounced back by more than 1%, representing the Dow’s biggest gain, after announcing a new $1 billion share buyback plan just a month after completing another $1 billion stock repurchase plan. CAT will buy back 11 million shares within the next few days from Societe Generale (SCGLY[12]), and expects to complete the entire purchase plan by September.
Finally, fresh off a disappointing earnings[13] report last week, Amazon (AMZN[14]) announced it will look to fill 7,000 jobs[15] in 13 different states for its fulfillment and customer service centers. The news did little for investors, who chopped nearly 2% off the stock by day’s end.
Notable earnings releases for Tuesday include Aflac (AFL[16]), Merck (MRK[17]), Pfizer (PFE[18]) and UBS (UBS[19]).
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he does not hold a position in any of the aforementioned securities.
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