Category: Stock Market News

Shares of Oclaro Inc. soared 23% in premarket trade Monday after the optical components company agreed to be acquired by Lumentum Holdings Inc. in a deal valued at $1.8 billion. Under terms of the deal, Oclara shareholders will receive $5.0 in cash and 0.0636 Lumentum common shares, which based on Friday closing stock prices represent would value Oclara shares at $9.99 each, or a 27% premium. Oclaro’s stock hasn’t closed as high as at that level since July 26, 2017. The deal is expected to generate over $60 million in annual synergies within 12 months to 24 months of closing, which is expected to be in the second half of 2018. Lumentum said it plans to fund the deal with cash on hand from the combined company’s balance sheet and $550 million in debt financing. Oclara’s stock had lost 8.2% over the past 12 months through Friday, while Lumentum shares had soared 50.6% and the S&P 500 had gained 17.5%.

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U.S. stock futures moved sharply higher on Monday, indicating Wall Street may extend gains seen late last week after data showed a strong increase in jobs created, but weaker-than-forecast wages. Dow futures rose 156 points, or 0.6%, to 25,516. S&P 500 futures gained 14.7 points, or 0.5%, to 2,803.50. Nasdaq 100 futures jumped 47 points, or 0.7%, to 7,171. On Friday, the Dow Jones Industrial Average soared 440.53 points to 25,335.74, finishing above the 25,000 level for the first time since Feb. 28. The S&P 500 and Nasdaq Composite rose 1.7% and 1.8%, respectively. Asia tracked Wall Street higher on Monday, with several indexes adding gains of 1% or more. The dollar index was flat and gold was modestly lower. Oil prices were drifting south.

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Tesla Inc. confirmed it suspended production of Model 3 cars for a week during February, Bloomberg News reported Sunday. The Feb. 20-24 shutdown at the Fremont, Calif, auto plant was planned, Tesla told Bloomberg, and used to “improve automation” and “address bottlenecks.” Tesla has been under pressure to increase production of its Model 3 electric sedans. Earlier in February, Tesla said it expected to produce 2,500 Model 3 units per week by the end of the first quarter, and 5,000 a week to the end of the second quarter. Tesla had hoped to be producing 5,000 a week by the end of the first quarter. In January, Tesla reported lower-than-expected deliveries in its fourth quarter. Tesla shares have gained 5% this year, compared to the S&P 500’s 4.2% increase.

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The biggest initial public offering ever is likely to be delayed until 2019, according to the Financial Times. Saudi Aramco, the state-owned Saudi Arabian oil giant, had intended to go public in late 2018, but is likely to push back its IPO into next year due to difficulties in setting up the complex offering, which is valued at an estimated $2 trillion, FT reported Sunday. The company has been shrouded in secrecy, and advisers are struggling to achieve the valuation sought by Saudi Crown Prince Mohammed bin Salman, the FT said. Exchanges around the world have vied to host the listing, with the New York Stock Exchange and London Stock Exchange seen as the top contenders.

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Shares of Broadcom Ltd. jumped Friday afternoon after a report that Intel Corp. has considered making a bid for the company if its hostile takeover attempt of Qualcomm Corp. succeeds. According to The Wall Street Journal, Intel — the world’s largest chipmaker — would see a combined Broadcom and Qualcomm as a serious competitive threat, and has been planning potential approaches were it to be successful. The report, which cited multiple anonymous sources, said that Intel has considered making its own bid for the combined company, and was working with advisers. Broadcom stock jumped 7% in after-hours trading following the report’s release, while Intel and Qualcomm stocks were trading down less than 1% from their closing prices. Broadcom stock is up 14.3% in the past year, as the S&P 500 index has gained 15.8%.

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Stocks ended sharply higher on Friday after the February employment report showed a strong jobs number but muted wage gains, easing concerns about a flare-up in inflationary pressures. S&P 500 rose 48 points, or 1.7%, to 2,787. Dow Jones Industrial Average advanced 441 points, or 1.8%, to 25,336. The Nasdaq Composite Index climbed 133 points, or 1.8%. For the week, the S&P 500 was up by 3.5%, the Dow up by 3.3%, and the Nasdaq up by 4.2%. The tech-heavy Nasdaq notched its first closing record since Jan. 26. All three benchmark indexes posted their best weekly performance in three weeks. The U.S economy added 313,000 jobs in February, the biggest gain since mid-2016, while average hourly earnings rose by 0.1%.

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President Donald Trump pardoned a Navy sailor who took photographs of the classified areas of a nuclear submarine, White House press secretary Sarah Sanders told reporters Friday. Kristian Saucier pleaded guilty to taking photos of the USS Alexandria’s propulsion system while working in its engine room in 2009. Saucier has served a 12-month sentence and Sanders said Trump appreciated his service to the country.

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Oil prices rallied Friday to score a gain for the week, as the potential for a meeting between the U.S. president and North Korea’s leader helped to ease some geopolitical risk in the market. Data revealing the first weekly decline in seven weeks in the number of active U.S. oil rigs also contributed to the rise in prices. April WTI crude added $1.92, or 3.2%, to settle at $62.04 a barrel on the New York Mercantile Exchange. It rose roughly 1.3% for the week.

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President Donald Trump wants to see “concrete steps and concrete actions” by North Korea before meeting leader Kim Jong Un, White House press secretary Sarah Sanders said Friday. Thursday, a senior South Korean official said the meeting could be held by May, but Sanders said a time and place “have not yet been determined.” The U.S. is pressing North Korea to give up its nuclear weapons program.

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Former drug-company executive Martin Shkreli on Friday was sentenced to 7 years in prison, according to media reports. He was also ordered to pay a fine of $75,000 in addition to the more than $7 million he previously had been ordered to forfeit. Shkreli was convicted in August of defrauding hedge-fund investors and earlier this week prosecutors had asked for a sentence of at least 15 years, saying he was unrepentant. Shkreli’s lawyers had asked for a sentence of less than two years. He first came to fame for buying the rights to a life-saving drug and then immediately raising the price to $750 a pill from $13.50.

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