Daily Market Summary 11/6/06

[Portfolio Crafter]

End of Day Market Summary Monday, 11/6/2006
by Portfolio Crafter
30-day risk-free trial

Stocks rallied to a sharply higher close and allowed the Dow to break a six-session losing streak. An upbeat Fed official's remarks and a $3.7 billion takeover offer for Four Season Hotels Inc. lent cheer to the market. Additionally, there were a host of corporate deals and as investors geared up for Tuesday's congressional elections.

Today, the Dow Jones industrial average closed up 119.51 or 1% to 12,105.55, the broader S&P 500 index closed up 16.48 or 1.13% to 1,379.78, and the tech-fueled Nasdaq composite index closed up 39.04 or 1.51% to 2,365.95.

Market breadth was positive. On the New York Stock Exchange, winners beat losers three to one on volume of 1.523 billion shares. On the Nasdaq, advancers topped decliners by more than two to one as almost 1.931 billion shares changed hands.

Today's advance was sparked by a host of corporate news and reassuring morning comments from former Federal Reserve Chairman Alan Greenspan, who said the worst is over for the U.S. housing market. Some polls suggested that while the Democratic Party was likely to take control of the House of Representatives, it was not as likely to also take control of the Senate. This was comforting to investors, and the traditionally Republican Wall Street.

Chicago Federal Reserve Bank President Michael Moskow, said the U.S. economy should bounce back from the weak third quarter and average "somewhat below" a 3% real GDP growth rate over the next year. He attributed much of the slowdown in the July-September quarter to the weak housing sector, but noted that this only accounted for 5% of U.S. gross domestic product. However, he also said that more interest-rate hikes may be necessary to help keep inflation under control.

Shares of Four Seasons Hotels closed up $18.63 or 29% to $82.50, after it received a $3.7 billion management-led buyout offer. The offer is led by a group including shareholder Isadore Sharp and Triples Holdings Limited, Kingdom Hotels International, a company owned by a trust created by Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, and Bill Gates' Cascade Investment LLC. The group would acquire the outstanding limited voting shares for $82 per share in cash. The board of Four Seasons has established a special committee of independent directors to consider the offer.

Stock of Abbott Laboratories closed down $0.17 or 0.4% to $47.47, after it stated that it will buy Kos Pharmaceuticals, for $3.7 billion. Shares of Kos closed up $26.97 or 54% to $77.06. Kos Pharmaceuticals is a developer of proprietary medications for the treatment of chronic cardiovascular, metabolic and respiratory diseases.

Shares of OSI Restaurants closed up $7.32 or 23% to $39.75, after agreeing to a $3.2 billion buyout from a private equity group that includes its founders. Anadarko Petroleum Corp. has agreed to sell its interests in and around two deep-water Gulf of Mexico discoveries and one prospect to Statoil for $901 million. Kohlberg Kravis & Roberts and the private-equity arm of Goldman Sachs has agreed to pay $4.6 billion for the forklift unit of Germany's Linde. Shares of Bema Gold Corp. rose 10.3% to $5.27 after Kinross Gold Corp. agreed to acquire the mining company in a $3.1 billion deal. Shares of Kinross slumped 9.4% to $12.01. Shares of Swift Transportation closed up $5.79 or 24% to $29.84, after it received a $2.2 billion buyout offer from its largest shareholder and former CEO.

Stock of McKesson, a prescription drug distributor, closed up $1.17 or 2.4% to $49.69, after it said that it was buying Per-Se Technologies, a health administration company, for about $1.23 billion. Shares of Per Se closed up $3.10 or 12.7% to $27.55. Excluding items and the anticipated synergies, McKesson expects the transaction to be neutral to marginally dilutive to earnings in fiscal 2008 and accretive thereafter.

U.S. light crude oil for December delivery gained 88 cents to settle at $60.02 a barrel on the New York Mercantile Exchange. OPEC has suggested that members may decide to impose further production cuts at its December meeting.

Try Portfolio Crafter risk-free for 30 days.