Skip to Content
Midday Market Update

Stocks Higher on More M&A Activity

Mentioned: , , , , ,

U.S. Market    
Stocks were up at midday after the holiday weekend as another large merger could be in the works, this time among office-supplies retailers  OfficeMax (OMX) and  Office Depot (ODP), which could be a sign of even more merger and acquisition activity to come elsewhere. 

Stocks also got a lift from an index that exceeded expectations for the German economy, with a reading of 48.2 compared with January's 31.5. Expectations were low for current conditions in the country, but long-term expectations were strong. 

Despite the positive stock movement, U.S. homebuilder confidence fell this month to a housing-market index reading of 46, a one-point drop from January and the opposite of the expected one-point gain. Although conditions are still perceived as more or less poor, with an index of less than 50, the current reading is still near seven-year highs, and homebuilders still expect a modest rise during the year. 

The Dow and the Nasdaq were each 0.3% higher at midday, and the S&P 500 was up by 0.5%. 

Stocks on the Move
OfficeMax and Office Depot shares had jumped by 23.6% and 12.9% by midday following a report that the  two firms were in discussions to merge their businesses. Competitor  Staples (SPLS) also saw its shares jump 11.3% on the news. 

 Medtronic (MDT) posted a 5.7% gain in third-quarter profit and a 2.8% year-over-year increase in revenue. Sales were in line with expectations, while earnings beat them. Shares were down by 2.3% at midday. 

Late Monday,  Express Scripts (ESRX) announced a 74% jump in fourth-quarter net income along with a sharp gain in revenue. The firm also announced a full-year earnings-per-share forecast to be at or above Wall Street expectations. Shares were 2.3% higher at midday. 

 General Mills (GIS) shares were 1.5% higher at midday after the firm said it plans to return more cash to shareholders and pare back on acquisition activity

Foreign Markets
Shares in Asia slipped with the Shanghai Composite falling 1.6% and the Hang Seng losing 1.0%. The Nikkei 225 fell by 0.3%. 

European stocks all gained, with the FTSE 100 rising by 1.0%, the Paris CAC moving 1.9% higher, and the DAX gaining 1.6%. 

Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.