Some disappointing earnings reports overshadowed fresh mergers and acquisitions speculation, forcing stocks slightly lower to end the week.
On Friday, the S&P 500 lost 0.01% while the Dow Jones Industrial Average dropped 0.1%. The Nasdaq Composite finished higher by 0.3%.
McDonald’s Corporation (MCD)
Shares of McDonald’s Corporation, the world’s largest hamburger chain, jumped 2.6% on heavy volume after the company delivered third-quarter results that beat Wall Street expectations.
MCD, a member of the Dow Jones Industrial Average, earned $1.50 per share during the third quarter, slightly ahead of analysts’ estimate of earnings of $1.48. Illinois-based MCD said third-quarter sales were $6.42 billion. Analysts expected $6.27 billion.
While sales growth in the U.S. remains slow, MCD said third-quarter same-store sales climbed 3.5% across all geographies. Strong growth in Japan helped offset some weakness in China, reports CNBC.
McDonald’s shares are off almost 4% this year.
Reynolds American, Inc. (RAI)
Tobacco giant Reynolds American, Inc. surged 14% on volume that was nearly 15 times above the daily average after the company received a takeover offer from rival British American Tobacco plc.
British American is offering $47 billion for RAI, which makes Camel cigarettes, among other well-known brands. The British company already owns 42% of RAI. BAT is offering a mix of cash and shares of Reynolds American.
“The British group said its offer valued Reynolds’s shares at $56.50, of which $24.13 would be in cash and $32.37 would be in BAT shares, representing a premium of 20 percent over the closing price of Reynolds stock on Thursday,” according to Reuters.
If completed, the deal would bring more well-known brands from RAI into the fold for BAT to sell those products in some parts of Emerging Europe where U.S. cigarettes remain popular.
Time Warner Inc (TWX)
Shares of cable giant Time Warner Inc soared 7.8% on more than 10 times the average volume following reports that AT&T Inc. (NYSE:T) is in talks to acquire the company.
The Wall Street Journal deemed the talks between TWX and AT&T “advanced,” noting that a deal could be unveiled as soon as this weekend.
TWX owns HBO as well as cable properties including TNT, TBS and CNN. AT&T acquired DirecTV for $50 billion last year.
As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities.