Pre-Market: Wal-Mart Acquires Search-Engine Marketing Company; US Trade Gap Widens
By Alex Brokaw May 06, 2014 8:58 am
Eurozone activity in April suggest a broader recovery in the region.
Stock futures pointed toward a lower open on Tuesday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures fell 0.07% to 16,433. Futures on the S&P 500 (INDEXSP:.INX) were down 0.07% to 1,874.50. Nasdaq (INDEXNASDAQ:.IXIC) futures moved lower, falling 0.8% to 3,588.
Wal-Mart (NYSE:WMT) has acquired the search-engine marketing company Adchemy, marking the global retailer's 12th and largest acquisition. Wal-Mart has been investing heavily in its online retail division. The company just announced global online sales grew by 30% in 2013, versus 20% growth for Amazon (NASDAQ:AMZN). Amazon still far outweighs Wal-Mart, with online revenues of $67.8 billion versus $10 billion, respectively.
Credit Suisse (NYSE:CS) could reportedly pay as much as $1.6 billion to resolve an investigation by the US Department of Justice into the bank's alleged role in helping Americans evade taxes. In a similar case in 2009, UBS (NYSE:UBS) paid $780 million to settle allegations. A $1.6 billion penalty far exceeds Credit Suisse's $1.02 billion fund set aside to pay possible penalties in the United States.
Merck (NYSE:MRK) has confirmed that Bayer AG (OTCMKTS:BAYRY) is buying its consumer care business for $14.2 billion. News that Bayer AG would be acquiring Merck brands such as Claritin, Afrin, and Coppertone leaked last week. Merck has said it will refocus itself on enhancing its pipeline. Shares of Merck were up 0.80% in pre-market trading.
Earnings season chugged forward on Tuesday, with notable results from UBS, Barclays (NYSE:BCS), and AIG (NYSE:AIG). UBS saw net income rise by 6.7% in the first quarter and will likely reach its main profitability target of a 15% return on equity at some point in 2016. Barclays missed estimates as its pretax profit fell 5% to $2.85 billion and announced its technology banking chief was leaving the company. AIG's profits fell by 27%, but it did come in ahead of expectations. Shares of UBS were up 1.49% in pre-market trading. Barclays fell 2.37%. AIG fell 2.90%.
Tuesday's economic indicators were led by US international trade numbers, which showed the America's international trade gap widening to $42.3 billion in February from $39.3 billion in January. International Gallup's Economic Confidence Index held at negative 16 for April, having remained virtually constant through 2014. Same-store retail sales in the US fell 2% in the week ending May 2 thanks to poor weather and flooding in the eastern United States. At 8:55 a.m. EDT, the Redbook chain store sales will be released. The results of the $29 billion, three-year note auction arrive at 1:00 p.m.
Asian stocks moved higher amid lower trading volume, as markets in Japan, Hong Kong, and South Korea were closed for holidays. In China, local governments are considering off-loading assets totaling $7 billion to lower their debt burden, as President Xi Jinping moves forward with his plan to subject China's state-owned enterprises to more competition. European stocks remained flat following two days of decline. Eurozone business activity in April grew at its fastest pace in nearly three years, signaling a broader recovery in the region. Turmoil in the Ukraine continued: Four government servicemen and 30 pro-Russian rebels were killed yesterday.
No positions in stocks mentioned.
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