Dow Cheers Dell Buyout
Following yesterday's slide, the Dow Jones Industrial Average came roaring back today, gaining 99 points or 0.7%. For much of the day, the index traded above the 14,000 mark, but it dipped late in the session to finish at 13,979. The S&P 500 and the Nasdaq both posted gains of more than 1%.
As the Nasdaq's 1.3% gain showed, techs led the day, cheering news that a group of private investors including Michael Dell will take his namesake PC company, Dell , private in a deal valued at $24 billion. The buyout is the largest in the U.S. since the financial crisis, and it seems to spark hopes that it will encourage more private-equity activity. Mr. Dell hopes to turn around his company after years of decline, and he even received a $2 billion loan for the deal from Microsoft, which has its own stake in the survival of the PC market. Dell shares rose only slightly, by 1.1%, as the deal was first reported to be in the works weeks ago.
Notably, rival Hewlett-Packard was up 4% after hours on rumors that the board has shown interest in splitting the company up. The business-news site Quartz reported this afternoon that HP execs are "studying a breakup" and considering many options "to obtain maximum value for shareholders." The story quoted people familiar with the matter, but HP did not comment. Quartz also said there was "no overt pressure to break up HP."
Disney was also moving higher after hours, gaining 2.7% after its earnings report came out. Net income at the media conglomerate dropped 6%, as ESPN was forced to pay higher costs for TV rights to show sports. Revenues, however, edged up 5% to $11.3 billion, topping estimates, and its lower EPS of $0.77 was still a penny ahead of the Street.
Among several other stocks reporting earnings after hours, online gamer Zynga jumped 5.5% after gaining 7% during the trading session. Net loss at the once-vaunted IPO narrowed $0.06 in the quarter, compared with $1.22 a year ago in the quarter it went public. Revenue was essentially flat at $311 million, but well above estimates of $250 million.
In today's only economic report, the January ISM services index was strong at 55.2, but slightly below expectations.
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The article Dow Cheers Dell Buyout originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Walt Disney and owns shares of Microsoft and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.