U.S. markets were moderately lower to mixed today, as investors kept a wary eye on Chinese economic reports, as well as a slew of earnings reports expected out this week.
One stock weighing down Wall Street was Morgan Stanley (NYSE:MS), which fell more than 5% after badly missing estimates on both earnings and revenue.
China reported third-quarter GDP of 6.9%, the slowest its GDP has been since 2009. The September industrial output at 5.7% was worse than expected, but a 10.9% increase in retail sales was above expectations.
The lower industrial numbers brought U.S. material stocks lower, and crude oil dropped 2.5%. However, the National Association of Home Builders’ (NAHB) monthly sentiment index rose 3 points to 64, the highest figure in 10 years. The index is up 10 points over the past year.
The Dow Jones Industrial Average rose 0.1%, while the S&P 500 was flat and the Nasdaq up 0.4%.
Mergers and acquisitions, whether real or speculative continue to propel many stocks higher, including Weight Watchers International, Inc. (NYSE:WTW), Diebold Inc (NYSE:DBD) and PMC-Sierra Inc (NASDAQ:PMCS). These three were some of today’s best stocks.
Weight Watchers International, Inc. (WTW)
Ah, the Oprah touch. Investors believe everything Oprah Winfrey touches turns to gold, and today WTW stock soared 105% after it was reported that Oprah Winfrey had purchased 10% of the company and will now be a board member.
In addition, Weight Watchers announced it will add “Happy Living” and “Healthy Living” programs to their services, broadening away from their long-time image of being simply a weight-loss program.
WTW stock has had a nice rebound from the July lows around $4, and today’s action pushed the stock above the 200-day moving average for the first time in two years. Perhaps better times are ahead for WTW.
Diebold Inc (DBD)
There has been no formal announcement of a merger yet, but The Wall Street Journal reported that Diebold in talks to purchase Wincor Nixdorf AG (ETR:WIN) — a German company that also manufactures ATMs, safes, and cash recycling systems for banks — in a deal valued at more than $1.9 billion.
The two companies had already made a non-binding agreement on September 24 in which Diebold would hold a public tender offer on all of Wincor’s outstanding stock, with the price of 52.50 euros per share. The deal would give Diebold a much larger presence in Europe, to add to its core business in the United States.
DBD stock rose more than 6%, while Wincor was up over 20% in trading on the German market.
PMC-Sierra Inc (PMCS)
And speaking of takeovers, PMCS surged more than 14% higher today after receiving a new buyout offer of $11.50 per share from Microsemi Corporation (NASDAQ:MSCC). Microsemi’s offer comes on the heels of a previous offer from Skyworks Solutions Inc (NASDAQ:SWKS) for $10.50 per share and an enterprise value of $2 billion.
Microsemi’s offer would have 76% in cash and the remainder in Microsemi stock shares. The total market value would be $2.4 billion and $2.2 billion in enterprise value.
PMCS’ board of directors has already approved the offer from Skyworks, so it would be an almost certainty that the company would approve the new offer; it just remains to be seen if Skyworks decides to up their bid. PMCS stockholders are more than happy to see a bidding war take place.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
