Stocks Rise on Higher Commodites, Merger News

(page 2 of 2)

American International Group (AIG) shares fell after the company annouced a deal to sell a portion of its investment advisory and asset management business to Bridge Partners, L.P., a company owned by Pacific Century Group, for about $500 million. AIG is retaining its in-house investment operation that oversees about $480 billion of assets under management. Credit Suisse downgraded AIG to underperform and cut its target price to $15.

Chartered Semiconductor Manufacturing Ltd. (CHRT) agreed to be acquired by Advanced Technology Investment Co. LLC of Abu Dhabi (ATIC) in a $1.8 billion deal. The estimated amount of consideration for each ADS is $18.64; the actual amount will depend on the applicable prevailing exchange rate, less the amount of applicable ADS depositary's fees, taxes and expenses. Separately, Chartered raised $388 million (+/- $6 million) third quarter midpoint revenue guidance to $410 million (+/- $5 million) and narrows third quarter $0.26 basic loss per share (+/- $0.05) to $0.07 loss (+/- $0.04).

Smithfield Foods (SFD) reported a fiscal first quarter loss of $0.56 per share, excluding nonrecurring items, a penny worse than the First Call consensus of a loss of $0.55. Revenues fell 13.6% year-over-year to $2.72 billion, shy of the $2.82 billion consensus. The pork producer said that the hog production industry "will very likely continue to incur losses until an industry-wide liquidation occurs."

General Electric (GE) moved up after JP Morgan reportedly upgraded the stock to overweight.

Harley-Davidson (HOG) shares also rose, fueled by an upgrade at Citigroup.

Shares of McGraw-Hill Companies (MHP) (which owns Standard & Poor's and BusinessWeek) lost 8% and Moody's (MCO) continued to fall following last week's ruling whereby a judge rejected the credit ratings agencies' claim that their opinions are free speech protected.

Osiris Therapeutics (OSIR) shares skidded after the company announced preliminary results for two phase III trials evaluating Prochymal for the treatment of acute graft versus host disease (GvHD). It says Prochymal showed significant improvements in response rates in difficult-to-treat liver and gastrointestinal GvHD, however, neither trial reached its primary endpoint.

McCormack is senior producer for BusinessWeek.com's Investing channel.

Business Exchange

Track and share business topics across the Web.