Sweet Enterprise Deal, Could Apple Sour for Consumers?
Sweet Enterprise Deal, Could Apple Sour for Consumers?
UnitedHealth Deal Spikes Catamaran as Stocks Rally in Midday Trading
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Today's Chart of the Day looks good – it's Apple, up more than 50% at the market's All-Star break, with investors cheering Tim Cook like he was Derek Jeter at last night's All-Star Game in Minneapolis. Apple's enterprise deal with IBM will push iPads and iPhones into the hands of sales managers and executives worldwide, a surefire long-term boost for the company's stock. However, if a KGI Securities report is to be believed, investors could be in for a stall in Apple's soaring share prices: the company may have to put the release of its iPhone 6 off until next year, creating temporary difficulties for its top line at the holidays.
Encouraging comments from China’s central bank chief on stimulating its economy and deal talks sparked a rally on Wall Street Monday. The Dow spiked more than 250 points in midday trading. UnitedHealth (UNH) was by far the best performing blue chip. The nation’s largest health insurer will buy pharmacy-benefit manager Catamaran (CTRX) for $12.8 billion. Shares of Catamaran surged 24%. Intel (INTC) was the Dow’s biggest laggard in the session as it gave back some of Friday’s gains. Altera (ALTR) also fell after rising on the Wall Street Journal’s report that Intel may be interested in acquiring it. GNC Holdings (GNC) was sharply higher after reaching a deal with the New York Attorney General. The 'wellness' retailer affirmed its products were in full compliance with the Food and Drug Administration.
An upgrade for Oracle, Microsoft is cut and Altera now seen as overvalued, all in Monday's Analysts' Actions. Oracle was upgraded to OUTPERFORM at RBC Capital. The firm increased price targets to $50 a share, arguing the company can show better cloud growth and improvement in its database business. RBC Capital felt less positive on Microsoft, cutting price targets to $47. The firm said a combination of weaker PC demand and foreign exchange challenges proved risky to earnings growth. Altera was hit by a downgrade to EQUAL WEIGHT at Morgan Stanley. Analysts said the stock looked overvalued after rocketing nearly 30% higher on Friday.
U.S. stocks looked to further their recovery from last week’s big losses at Monday's opening bell. Before the bell, investors got the latest tap into the American consumer. Personal income in February came in above expectations, rising 0.4% and Americans decided to save that money. The saving rate rose 5.8% to the highest level since December 2012. The Commerce Department's report showed consumer spending, however rose just 0.1% last month, less than economists expected. Yahoo (YHOO) and Microsoft (MSFT) decided to push back the deadline to renegotiate their 10-year search deal by about a month. The tech giants joined forces in 2010 to better compete against Google (GOOG). Yahoo’s CEO Marissa Mayer has expressed her dissatisfaction with the terms of the partnership. In an effort to consolidate and cut cost, Best Buy (BBY) is shutting down stores in Canada. The move will cut 1,500 jobs across that country.
Iran is reportedly backing away from a key detail in the nuclear deal. The deadline is Tuesday at midnight and the New York Times reports that Iran is no longer willing to ship their atomic fuel out of the country after months of tentatively saying it would do so. UnitedHealth plans to buy Cataraman for $12.8 billion in cash. The Wall Street Journal says this bulks up UnitedHealth's pharmacy benefits business as spending on cutting edge drugs is a growing concern for employers and insurers. McDonald's labor hearings begin today. The National Labor Relations Board hearings are aimed at getting McDonald's to the negotiating table.
Intel surged in late-day trading on deal talks, making it TheStreet's Move of the Day. The chipmaker is reportedly in talks to buy fellow semiconductor company Altera Corporation, according to The Wall Street Journal. If a deal comes to pass it would mark Intel's largest takeover yet. Before news of a potential deal broke, Altera's market cap clocked in at $10.4 billion. Intel has a market cap of $140 billion. Though potential deal terms could not be gleaned, the news comes at a desperate time for Intel. The industry giant is suffering weakening PC demand and a stronger U.S. dollar, both of which threaten Intel's future profit and sales growth.
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