It seems like it's the early 1990s all over again: There's a lame duck president in office with the last name Bush, "American Gladiator" is back on television with new episodes, and the stock market is in a bipolar mood. The markets were downright giddy in early afternoon trading Tuesday, reveling on news of billionaire Warren Buffett's proposed buyout of bond insurers' liabilities. The exhuberence lifted stocks involved in deals such as Dell Inc., Coca Cola Co., BHP Billiton Ltd. and Darden Restaurants Inc. Overall, the Dow was up 1.69%, and the Nasdaq was up .86%.
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With the backdrop of Buffett reinsuring some $800 billion of municipal bonds, investors were feeling the love on several stocks involved in some notable deals:
- BHP Billiton gained 3.75 % [BHP] as chairman Don Argus assured shareholders the merger would "unlock value" for investors in both companies but could take some time.
- Coca Cola [KO] was up 1% on expected rise in earnings due partly to its acquistion of Energy Brands Inc.'s Glaceau Vitaminwater last year for $4.1 billion. The fourth quarter was the first that Vitamenwater was under the Coke umbrella. Continuing to bolster its beverage market outside of traditional soft drinks, Coke paid $49 million last week for a 40% stake in Honest Tea.
- Darden Restaurants Inc. [DRI] rose 5.6%. The company said cost savings from its recent purchase of Rare Hospitality International Inc. may exceed its expectations.
- Dell [Dell] was doing a balancing act toward the green, up .5% on news that it acquired e-mail services provider Message Once Inc. for $155 million. The co-founder of the target also co-founded the Austin, Texas-based company. The acquisition is the third M&A deal for Dell as of late. In November, the company said it would pay $1.4 billion for storage software maker EqualLogic Inc. of Nashua, N.H.
Meanwhile, there wasn't love on the Street for all deal stocks. Yahoo! Inc. [
YHOO] was down slightly after it announced it would be acquiring Maven Networks Inc. for
$160 million. The addition hopes to enhance Yahoo!'s ability to allow companies to publish video online. Investors are also potentially shying away from Yahoo! because it announced Monday that it would reject Microsoft Corp.'s $44.6 billion offer. -
Gerald Magpily
Comments
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