U.S. markets began the day on positive footing after an initial spike of some 5% in the price of oil. Stocks continued to do well, but the gains in oil were short-lived indeed.
The big news from the oil markets was that four oil-producing countries — Russia, Saudi Arabia, Qatar and Venezuela — had formed an alliance, agreeing to institute a freeze at January output levels. But as soon as the markets learned that was contingent upon other large exporters agreeing to join with them, the rally fizzled. By day’s end, oil markets had continued their recent decline. Markets were hoping for a non-contingent agreement to reduce supply.
The street shrugged off two negative economic reports. The February U.S. Empire Manufacturing Index had a reading of -16.6, worse than economists’ projections, but an improvement above the -19.4 from January.
In addition, the February National Association of Homebuilders/Wells Fargo Housing Market Index dropped from the revised January reading of 61 to 58. Cold weather and unfilled construction jobs were cited by builders as reasons for the decline.
The Dow Jones Industrial Average rose 1.4%, while the S&P 500 was up 1.7%. The strongest index was the Nasdaq, up 2.3%. Sectors were green across the board, with big gains in technology and financials.
ADT Corp (ADT)
ADT stock was a huge winner today after the home security company announced it is being acquired by affiliates of Apollo Global Management LLC (NYSE:APO) with an approximate price tag of $6.94 billion.
The deal stipulates that shareholders of ADT stock will get $42 per share, a substantial 56% above the closing price on Friday. ADT will then merge with one of Apollo’s companies, Prime Security Services Borrower LLC. However, ADT will retain the brand name, and still be Florida based.
The board of directors has already approved the deal, but shareholders need to vote on it as well. The company also has 40 days during which time it can seek out other suitors.
ADT rocketed up over 47% by the closing bell.
LendingClub Corp (LC)
LC stock surged more than 11% today after reporting fourth-quarter earnings of 5 cents a share, a penny ahead of street estimates. In addition, revenue of $135.52 million easily surpassed the analysts’ take for $130.6 million.
LendingClub broke its recent downtrend, jumping up 12% on strong volume. The San Francisco, California, money lending website reported an 82% rise in loan originations to $2.58 billion this quarter.
This is the second time that Lending Club, which came public near the end of 2014, reported a quarterly profit. LC stock, which traded near $26 at the start of 2015, has been crushed since then, recently touching a closing low of only $6.51.
Groupon Inc (GRPN)
GRPN stock soared 41% today after announcing late on Friday that well-known Chinese Internet commerce company Alibaba Group Holding Ltd (NYSE:BABA) bought 33 million shares of Groupon in the open market.
The huge purchase put Alibaba’s share of GRPN stock at 5.6%, to make it Groupon’s fourth biggest shareholder. A spokesperson for Groupon denied knowing anything about the purchase beforehand.
This is not the first U.S. company which Alibaba has bought with both fists. The Chinese company has previously bought stakes in Lyft Inc., Magic Leap, Inc. and Jet.com Inc.
BABA stock ended higher by nearly 9% on the day. BABA is down to the mid $60’s from a recent high near $85.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.