Market Wrap for Tuesday, September 3rd: Acquisition Frenzy As Bankers Return From Summer In The Hamptons

On a day loaded with acquisitions, markets opened far above Friday’s close and slowly sold off, but managed to close higher.

Major Averages

The Dow Jones Industrial Average rose 23.65 points, or 0.16 percent, to 14,833.96.

The S&P 500 gained 6.8 points, or 0.42 percent, to 1,639.77.

The Nasdaq picked up a little better than 22.74 points, or 0.63 percent, to finish at 3,612.61.

The Russell 3000 added 4.02 points, gaining 0.41 percent to close at 980.85.

Acquisitions and Purchases

Of the three major acquisitions today, Microsoft’s MSFT purchase of Nokia NOK mobile is the biggest. For 7.17 billion Microsoft is taking control of Nokia Mobile’s patents, licenses, and services, adding 32,000 to the payroll. Shares of Nokia are up more than 30 percent while Microsoft shares are down roughly five percent on the day.

Second biggest on the day is Verizon VZ buying a stake of itself from Vodafone VOD. After extensive talks, Vodafone is giving up its 45 percent stake in Verizon for 130 billion, almost 60 of which will be in cash which Vodafone will use to pay down debt. Verizon fell 2.89 percent on the day while Vodafone fell 1.05 percent.

Finally, Jarden JAH Corporation will buy Yankee Candle for 1.75 billion cash. The acquisition of Yankee will add to Jarden’s portfolio of seasonal products. Jarden traded up more than ten percent today.

Manufacturing Data

The ISM manufacturing index for August came out today at 55.7, beating analyst estimates. The July reading was 55.4. The ISM manufacturing prices index showed growth for August at 54 after contracting in July.

Conversely, manufacturing PMI missed analyst estimates by 0.8 to come in at 53.1.

Biggest Stock Gainers

Rogers Communication RCI got a 6.94 percent boost to $42.35. The company was upgraded by National Bank.

Ericsson ERIC was also up, gaining 5.18 percent to $12.39 as the company announced its plans to build three global ICT Centers.

Nokia NOK rose 31.28 percent to $5.12 after the company agreed to sell its cellphone business to Microsoft MSFT for 5.44 billion euros ($7.2 billion).

Biggest Stock Losers

Verizon Communications VZ traded down 2.89 percent to $46.01 after the company agreed to buy Vodafone Group's VOD 45 percent stake in Verizon Wireless for $130 billion.

Microsoft MSFT recovered late in the day to fall just 4.55 percent to $31.88 after the company announced plans to buy Nokia's NOK cellphone business for 5.44 billion euros ($7.2 billion).

LeapFrog Enterprises LF was down 7.38 percent to $8.91 after BMO Capital downgraded the company to a Market Perform rating while lowering its price target to $10.00. The report stated that the new product was less than impressive and contained significant bugs.

Volume and Volatility

Now that Labor Day has passed, volume is finally picking up. 131.5 million shares of the SPDR S&P 500 ETF SPY compared to the 115 million share ten day average.

The Vix index, which tracks volatility in the S&P 500 fell 1.35 percent to 16.78. The index is up more than 30 percent on the month.

Commodities

Commodities were mostly unmoved today with COMEX gold futures moving up 1.22 percent to $1,413. Silver futures rose 3.6 percent to $24.36 with platinum rising 1.18 percent.

Oil was up a bit on the day with WTI at $108.55 and Brent at $115.74 at the end of the equity market close. Gasoline futures traded down 0.9 percent for the day to $286.40.

Currencies

The U.S. Dollar gained value today. The PowerShares DB US Dollar Index Bullish ETF UUP which tracks the performance of the greenback versus a basket of foreign currencies rose 0.32 percent on the day. The closely watched EUR/USD pair fell 0.13 percent percent to $1.3175. Other movers included the AUD/USD, which rose 0.84 percent and the USD/IDR (Indian Rupee), which added 2.6 percent.