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Overnight Markets: S&P 500 rises on Heinz deal
Shares eked out modest gain as concern over shrinking economies in Europe and Japan was overshadowed by a decline in jobless claims and Warren Buffett’s deal for H.J. Heinz Co.
The Standard & Poor’s 500 Index inched higher on Thursday as concern over shrinking economies in Europe and Japan was overshadowed by a decline in jobless claims and Warren Buffett’s deal for H.J. Heinz Co.
The Dow Jones industrial average was down 10 points, or 0.07%, at 13,973. The Standard & Poor's 500 Index was up one point at 1,521. The Nasdaq Composite Index was up two points, or 0.06%, at 3,199.
Stocks declined earlier after a report showed the eurozone's gross domestic product contracted by the steepest amount since the first quarter of 2009. Moreover, Japan's GDP contracted 0.1% in the fourth quarter, crushing expectations of a modest return to growth.
Markets recovered after economic data showed that the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week.
Shares of H.J. Heinz Co surged 20% after it said Warren Buffett's Berkshire Hathaway and 3G Capital will buy the food company for $72.50 a share, or $28 billion including debt. Berkshire's class B shares rose 1.3%.
Constellation Brands soared 37% after AB InBev's deal to take over Mexican brewer Grupo Modelo was revised to grant Constellation perpetual rights to distribute Corona and other Modelo brands in the United States. US shares of AB InBev gained 5.1%.
American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 4.6%.
General Motors Co was off 3.3% after reporting a weaker-than-expected fourth-quarter profit, citing bigger losses in Europe alongside lower prices in its core North American market.
Elsewhere, Campbell Soup Co., the world’s largest soup maker, climbed 1.4% while General Mills Inc., the maker of Cheerios cereal, advanced 3.1%.
In Asia, shares retreated from an 18- month high on Friday in afternoon trade as profit reports disappointed investors and Group of 20 finance chiefs prepared to meet.
The MSCI Asia Pacific Index slipped 0.6% to 133 as of 1:24 p.m. Tokyo time. Japan's Nikkei 225 index fell 0.9%. Hong Kong's Hang Seng dropped 0.1%. South Korea's Kospi was nearly unchanged, while Australia's S&P/ASX 200 was flat. Mainland China and Taiwan were closed for Lunar New Year holidays.
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by Gavin Lumsden on Dec 10, 2013 at 16:51