U.S. stocks meandered around the flat line on Wednesday, as traders digested the recent activity in the bond market, and a rather tepid retail report that came in below expectations.
Just as energy prices and the biotech sector have started to drive the general market higher, traders are watching the bond market to make sure that yields don’t rise to a level that would put undue pressure on stocks.
The Commerce Department’s April retail sales report was released, but it didn’t exactly excite anyone. Sales, excluding automobiles, were up only 0.1%, well below the estimates for a 0.5% gain. So much for the “better weather will bring out the consumer spending” theory.
With the flat retail sales number, JPMorgan Chase & Co (NYSE:JPM) reduced its estimate for Q2 annualized GDP growth from 2.5% to 2.0%. The good news is that the Fed is less likely to raise interest rates anytime soon with numbers like these coming out.
The Dow Jones Industrial Average and S&P 500 were off a fraction, while the Nasdaq was up 0.1%. Sectors, emulating the market, were mixed today, with technology and basic materials the strongest of the groups.
Mergers and Acquisitions continue to propel participating stocks higher. Two stocks that surged higher as a result of that activity today were Williams Partners LP (NYSE:WPZ) and Owens-Illinois Inc (NYSE:OI). Those two and Zebra Technologies Corp. (NASDAQ:ZBRA) comprise our list of 3 of Today’s Best Stocks
Williams Partners LP (WPZ)
In a slightly different twist to the current acquisition craze on Wall Street, Williams Partners stock blasted 22% higher after its parent company Williams Companies (NYSE:WMB) announced it will purchase its subsidiary, WPZ, in an all-stock deal.
The total deal was valued at approximately $13.8 billion. WMB says it will add $5.4 billion in earnings to its 2016 bottom line. The expected closing of the deal will be in the third quarter of 2015. Williams Company will also be raising its dividend over 6% to 64 cents per share at that time.
WMB stock was up over 6% on the news. InvestorPlace contributor Aaron Levitt gave WPZ a big thumbs up recently as a high-yield limited partnership play.
Owens-Illinois Inc (OI)
OI stock shocked investors today, announcing the acquisition of Mexico’s Vitro SA Mexico (OTCMKTS:VITOF) glass container business. The deal is said to be worth $2.15 billion and will give OI a stronger foothold in Mexico, which is a fast-growing country for a number of distilleries and bottlers.
Under the terms of the deal, which is expected to close within 12 months, OI will get five plants owned by Vitro in Mexico, and one in Bolivia. OI expects the acquisition to add 30 cents to 40 cents per share to its earnings within one year of the transaction, and about 50 cents per share after three years.
OI gained 9% today on a huge surge above its normal volume.
Zebra Technologies Corp. (ZBRA)
Zebra, a company that makes bar-code scanners and printers, behaved like a lion today, roaring to new highs after trouncing estimates on their first quarter earnings.
ZBRA stock gapped up 14% after reporting earnings of $1.39 per share, well ahead of Wall street estimates for $1.12 per share. Revenue of $893 million were up an astounding 210%, and beat the street’s view of $882 million.
Part of the success came from Zebra’s acquisition of Motorola Solutions Inc (NYSE:MSI) in October, 2014.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
