After Market: Tech Giants Make Peace; AT&T Makes a Deal

DailyFinance Staff
Updated

Tech stocks led the Nasdaq higher on Monday, but some big merger news didn't have the impact you might expect. The Dow Jones industrial average (^DJI) gained 20 points, the Standard & Poor's 500 index (^GPSC) added 7, and the Nasdaq composite (^IXIC) rose 35 points.

Apple (AAPL) and Google (GOOG), two of the biggest contributors to the Nasdaq, each gained more than 1 percent. The two companies agreed over the weekend to dismiss patent lawsuits against each other. Neither company scores a big "win," but they both remove some uncertainty overhanging their shares.

Facebook (FB) rose 2 percent, Netflix (NFLX) gained 4 percent and TripAdvisor (TRIP) jumped 5 percent each. Cyber-security firm FireEye (FEYE) rose 4 percent on upbeat product comments from a well-known tech analyst at Nomura. And Gogo (GOGO) gained 5½ percent after UBS raised its rating on the in-flight Internet company's stock to "buy" from "neutral."

On the merger front, AstraZeneca (AZN) slid 12 percent after rejecting Pfizer's (PFE) sweetened takeover bid. Pfizer added less than 1 percent. Shareholders may think the company can find a better way to spend more than $120 billion. One impetus behind the Pfizer bid is a plan to move its headquarters to Great Britain to lower its corporate tax rate.

That idea -– known as a tax inversion -- could be the motivation behind Walgreen's (WAG) expressed interest in buying out privately held Alliance Boots. Walgreen shares rose 3 percent. It already owns a 45 percent stake in the British pharmacy chain.

AT&T (T) fell 1 percent after officially announcing its $48.5 billion deal to take over DirecTV (DTV), which lost 2 percent, mostly because the acquisition was widely expected, and its approval was already baked into their stock prices. DirecTV shares have run up 30 percent over the past six months. But rival satellite TV provider Dish Network (DISH) give up early gains to end 1 percent lower, despite reports it, too, could become a takeover target, with Verizon (VZ) mentioned as a potential suitor.

Also feeling the fallout from the AT&T deal was American Movil (AMX), which fell 4 percent. AT&T plans to sell its substantial stake in the Mexican telecom company to help fund its purchase of DirecTV.

Finally, Johnson Controls (JCI) rose more than 4 percent on its plan to spinoff auto interiors business.

What to Watch Tuesday:
These major companies are scheduled to release quarterly financial statements:

  • Dick's Sporting Goods (DKS)

  • Home Depot (HD)

  • Intuit (INTC)

  • LaQuinta Holdings (LQ)

  • TJX Cos. (TJX)

  • Vodafone (VOD)

-Produced by Drew Trachtenberg.

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