Stock Market Today: Why Covidien and DreamWorks Stocks are on the Move
The Dow Jones Industrial Average has lost 31 points in pre-market trading, suggesting a negative start to the market today. World indexes ticked lower overnight, led by a 1% drop in Japan's Nikkei. European shares were off by 0.5% as of 8:30 a.m. EDT.
Meanwhile, breaking news on Covidien and DreamWorks Animation could spur heavy trading in both stocks today.
Covidien's shares were up 29% in pre-market trading after the health-care technology giant agreed over the weekend to be purchased by Medtronic . The proposed deal is worth $43 billion and values Covidien's stock at roughly $93 a share. However, a big chunk of the purchase price will be delivered to Covidien shareholders in the form of Medtronic stock -- and that's making for some interesting pre-market action. Investors also bid up Medtronic's shares by 5.5%, which explains why Covidien's stock was already trading just above the announced purchase price. Medtronic said in a press release that this deal will create a medical tech and services company with almost $30 billion in annual sales and a massive global reach to over 150 countries. The merger should start kicking in higher cash earnings in fiscal 2016, with per-share earnings growth slated for 2018, according to Medtronic.
DreamWorks Animation investors can breathe a sigh of relief. How to Train Your Dragon 2 opened to a solid $50 million in weekend receipts at the box office, which puts the animated film on track to beat the original movie's blockbuster $217 million domestic haul. While this weekend's opening wasn't as high as the $65 million that some analysts were targeting, it was far from a flop. And that win reverses an uncomfortable string of poor showings for DreamWorks: Mr. Peabody & Sherman last quarter joined 2013's Turbo and 2012's Rise of the Guardians as financial losers for the company. Audiences gave Dragon 2 high reviews (the film notched an A rating on CinemaScore), which should give it some staying power over the next few months. And a less crowded movie slate this summer means that the path is clear for the film to rack up some significant revenue for DreamWorks. The stock was down 6.8% in pre-market trading.
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The article Stock Market Today: Why Covidien and DreamWorks Stocks are on the Move originally appeared on Fool.com.Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Covidien and DreamWorks Animation. The Motley Fool owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
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