U.S. markets rose again on Tuesday morning, as higher oil prices and renewed strength in the dollar were being carefully watched ahead of the start of earnings season tomorrow. But the markets gave it all back by the end of the day to finish flat.
It was a light day for economic news, but the U.S. Bureau of Labor Statistics reported 5.1 million job openings at the end of February, slightly above Street estimates and the largest total in 14 years.
The Dow Jones Industrial Average was flat while the S&P 500 lost 0.2% and the Nasdaq Composite was off 0.1%. Sectors were mixed, with energy and healthcare looking the strongest.
Merger news again dominated the chatter on the street, with Twitter Inc (NYSE:TWTR) and FedEx Corporation (NYSE:FDX) getting the lion’s share of interest. Subsequently, those two and Ocwen Financial Corp (NYSE:OCN) are three of today’s best stocks.
Twitter Inc (TWTR)
TWTR stock rose 4% on 36 million shares today amid speculation that it could be the target of a takeover bid. Barron’s reported there are two rivals (possibly Google Inc (NASDAQ:GOOG, NASDAQ:GOOGL) or Facebook Inc (NASDAQ:FB) interested in the social media company, and the Street gossip is that Goldman Sachs has been hired by Twitter to fight off any hostile takeover attempts.
So far, this is all speculation, so investors are cautioned not to jump the gun on rumors alone. It was a great day for Twitter stock, as it broke above highs near $52.50 set last October.
FedEx Corporation (FDX)
Speaking of takeovers, FDX stock was up 2.7% after it confirmed that it will buy TNT Express NV, the Dutch delivery firm, for $4.8 billion.
Analysts are applauding the deal as a way for FedEx to expand its presence and subsequently its profits throughout Europe. The strong dollar against the euro is also aiding in U.S. companies being able to get European companies at a good price.
There were several positive analyst comments on the news, including Citigroup reiterating a “buy” rating and $200 price target, and Cowen Group Inc reiterating an “outperform” rating and $210 price target on FDX stock.
FDX stock has mostly been trading sideways to lower since last December. The stock traded up more than 4% earlier in the day before pulling back near the closing bell.
Ocwen Financial Corp (OCN)
OCN stock blasted 11% higher today after its affiliate, Home Loan Servicing Solutions, Ltd. announced it has canceled its proposed merger with New Residential Investment Corp (NYSE:NRZ)
Instead, New Residential, a real estate investment trust (REIT), will acquire most of Home Loan’s assets for a lower price. NRZ also said it has agreed to a multi-year extension of service contracts with Ocwen.
It’s been a wild ride for OCN stock since the beginning of 2014, when OCN stock traded at $55 a share. By the end of this January OCN stock had fallen to less than $6. Those who were brave enough to buy OCN stock at that level have been richly rewarded, as the stock has climbed roughly 60% since then.
NRZ stock was also 3% higher on the day.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
