Dow 13,265 (+.40%) S&P 1,419 (+.75%)
We know most of our readers are still recovering from their “First Quarter celebrations” over the weekend, so we’ll keep today’s summary ever more to the point now. After the major stock indices on Friday officially finished the first 3 months of 2012 with the biggest first quarter point gains in their histories, the second quarter of the year began today on a similarly promising note. An afternoon report on US manufacturing beating expectations was enough to push the Dow up 52 points to kick of the new week, month and quarter.
Manufacturing increases in US during March
The Institute for Supply Management (a not-for-profit statistics and education organization) reported that its “Manufacturing Index” for the US rose from a 52.4 to a 53.4 rating in March, beating analysts’ forecasts. The index measures a wide variety of manufacturing data (like new orders, production inventories and supplies) and economists monitor the monthly report because any rating over 50 indicates “expanding activity.” After a morning announcement that manufacturing dipped in Europe set a disappointing tone in early trading today (this was Europe’s 8th straight below-50 reading), the US news showed up like the only confident kid on the empty middle school dance floor, bringing growth and industrial stocks, like John Deere (DE) and Caterpillar (CAT), back up.
Avon stock skyrockets on speculation of acquisition
In some places it’s still customary to ask a father for permission before popping the question to an eligible maiden. The same holds true in the corporate world for mergers & acquisitions; the acquiring company must ask permission from the target company’s management before going to shareholders. Coty, the biggest perfume company on Earth, flirted with a “hostile takeover” (when a company bypasses management and goes straight to the shareholders with an offer) of Avon (AVP), the American cosmetic company. Apparently Coty called Avon’s management in March with an offer to buy the company for $23.25/share ($10 billion total), but finally made the offer public after it was ignored. Now shareholders know they could get $23.25 for every share that was worth $19.36 on Friday. This puts a lot of pressure on Avon management, who says it’s a crappy deal for shareholders and that the company is worth much more (shares were trading as high as $31.60 in May of 2011). They claim this offer is insulting, but remember that 51% of shareholders (the owners of the company) are all that is needed to take an offer. Avon’s stock was up 17.25% today on hopes that Coty will increase its bid on the company. Have no doubt though, the French-based Coty is charming – and we’ve heard it’s the fantasy of every stockholder to elope with a romantic french suitor.
- US March Factory Orders – another indicator of recent economic growth in the nation.
- Apple‘s iPad is ranked the #1 tablet by Consumer Reports - can this news push Apple stock past $1 bajillion a share in the opening minutes of trading?
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