U.S. markets sold off following the long holiday weekend, as traders felt uneasy about renewed strength in the U.S. dollar and data that could lead to a rate hike sooner than previously expected.
The dollar was up over 1%, and at its highest level against the yen in almost eight years. Federal Reserve Chairwoman Janet Yellen said on Friday that a rate hike is appropriate in 2015 if the economy improves.
In economic news, April’s durable goods order declined 0.5%, in line with expectations. However, non-defense capital goods orders, except for aircraft, rose 1% in April, above estimates for a 0.3% increase, and March was revised higher as well.
In addition, housing data was up, as April’s new homes report showed an increase of 6.8% to a seasonally adjusted annual rate of 517,ooo, about 7000 above expectations. The S&P/Case-Shiller composite index of 20 cities gained 5% in March year over year ahead of analysts’ expectations for a 4.7% rise.
The Dow Jones Industrial Average and S&P 500 were both off by 1%, with the Nasdaq Composite slipping 1.1%. All sectors were in the red today, and no real market leadership was apparent.
Despite the weak general market, mergers and acquisitions continue to boost portions of the market higher. Time Warner Cable Inc (NYSE:TWC) and Geeknet Inc (NASDAQ:GKNT) were proof of that, while Lumber Liquidators Holdings Inc (NYSE:LL), by making a big change, rounds out the list of three of today’s best stocks.
Time Warner Cable Inc (TWC)
TWC stock blasted 7% higher amid word that Charter Communications, Inc. (NASDAQ:CHTR) is buying Time Warner Cable for $55 billion in cash and stock, making the combined company the second largest cable operator in the U.S. with more than 23 million customers. The proposed deal has CHTR buying TWC stock for $195 per share.
One month ago, a proposed deal between Comcast Corporation (NASDAQ:CMCSA) and Time Warner for $45 billion fell apart when Comcast pulled out. In retrospect, that move now looks quite fortuitous for TWC shareholders. However, regulators at the Federal Communications Commission (FCC) will still have to approve the new acquisition.
Geeknet Inc (GKNT)
Wouldn’t it be nice to wake up one morning to discover your stock just doubled overnight? Shareholders of GKNT stock celebrated this morning, with GKNT blasting 115% higher after GKNT announced its acquisition by Hot Topic, Inc. (NASDAQ:HOTT) for $117.3 million. Hot Topic will pay $17.50 per share for GKNT stock, more than double the $7.90 previous closing price.
Geeknet, the parent company of online retailers ThinkGeek and ThinkGeek Solutions, is a manufacturer of clothing, toys and gadgets with “geek” appeal, mostly based on science-fiction movies. Hot Topic is a mall and web-based retailer that sells apparel and accessories of music and pop culture.
Lumber Liquidators Holdings Inc (LL)
LL stock is up more than 4% today, bouncing back after Friday’s 16% selloff, amid the sudden and unexplained resignation of CEO Robert M. Lynch. His departure, following the resignation of CFO Daniel Terrell a few weeks ago, is creating much negative speculation about the beleaguered retailer.
Thomas Sullivan, who founded Lumber Liquidators in the early 1990’s, will now become the acting CEO, and John M. Presley, LL’s lead independent director, will become the board’s non-executive chairman.
Lumber Liquidators stock has been crushed ever since the 60 Minutes report on Mar. 1, exposing the company’s practice of selling Chinese made laminate flooring containing formaldehyde levels that were 20% above California’s emissions standards. Mr. Sullivan has vehemently denied these claims
LL stock, which touched $70 before the 60 Minutes piece came out, finished at $22.04 today.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.
