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Pre-Market: Apple Moves to Buy Beats Electronics; $35 Billion Omnicom-Publicis Merger Falls Apart


Casino stocks led Asian markets higher overnight.

Stock futures pointed toward a lower open for the week's final trading session. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures fell 0.17% to 16,482. Futures on the S&P 500 (INDEXSP:.INX) were down 0.22% to 1,869.40. Nasdaq (INDEXNASDAQ:.IXIC) futures moved lower, falling 0.37% to 3,535.50.


Apple (NASDAQ:AAPL) is very close to buying high-end headphone maker Beats Electronics for $3.2 billion, The Financial Times reported late last night. News of the deal quickly made its rounds on the Internet, with many wondering exactly why Apple would spend so much money on a company that didn't offer any clear strategic advantages. Some speculate that Apple is more interested in Beats' new streaming-music service, which launched in January, than in its popular hardware offering. The acquisition would be a departure for Apple, which traditionally doesn't dish out big money to buy other companies -- the most it has spent is $400 million for NeXT in 1997. Shares of Apple were down 0.63% in pre-market trading.

A proposed $35 billion merger between the two of the world's biggest advertising agencies, Omnicom Group (NYSE:OMC) and Publicis Groupe (OTCMKTS:PUBGY) has been called off after the companies couldn't overcome numerous obstacles. Differing corporate cultures, a complicated tax structures, and quibbles over who would serve as the merged companies' CEO were reportedly behind the breakdown. Britain-based WPP will remain the world's largest advertising agency after the deal fell apart. Shares of Omnicom were flat ahead of the opening bell. Publicis shares rose 1.25% overnight.

Among the latest crop of freshly reported earnings, Spain's Telefonica (NYSE:TEF) missed first-quarter earnings estimates, as sales in Europe fell sharply and European currencies weakened. Hilton Worldwide (NYSE:HLT) reported a surge in profits from $89 a year ago to $123 million in the first quarter, significantly beating expectations and setting a strong outlook for the second quarter. CBS (NYSE:CBS) delivered a higher net income in the first quarter, despite a 12% drop in advertising sales due in part to the company not having the rights to show the Super Bowl this year. Shares of Telefonica were down 3.09% in pre-market trading. Hilton rose 1.55%. CBS fell 2.34%.


Friday's economic calendar begins with the Department of Labor's Job Openings and Labor Turnover Survey, which will be published at 10:00 a.m. EDT. The JOLTS report records the number of job opening that remain unfilled by the end of the month. Wholesale trade numbers, reported by the US Census Bureau, will also be reported at 10:00 a.m. At noon, Dallas Fed President Richard Fisher will deliver a speech on monetary policy in New Orleans.

Global Markets

Macau casino operators, including Galaxy Entertainment Group Ltd. (OTCMKTS:GXYEY) and Sands China Ltd. (OTCMKTS:SCHYY), led Asian markets higher overnight. Gains came as analysts said that fears of authorities cracking down on illegal money transfers were exaggerated. In China, inflation slowed more than expected in April, falling to an 18-month low, while China's consumer price index rose 1.8% (versus a 2.4% gain in March) and the producer price index fell 2%. In Europe, news of Telefonica's earnings helped push stocks off a six-year high. German exports saw their largest decline in almost a year in March, and imports fell, too, sending the country's trade surplus down to $20.4 billion. German Chancellor Angela Merkel met with French President Francois Hollande to discuss the Ukraine crisis, among other issues. In the Ukraine, clashes were reported between pro-Russian separatists and government forces in the southern city of Mariupol. Meanwhile, Russian President Vladimir Putin visited Crimea to take part in a holiday celebration.

Twitter: @brokawbrokaw
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