M&A Activity Has Surged

Financial News for the Week Ending February 16th

U.S. Stocks were flat for the week with the S&P 500 edging up 0.1% for its seventh straight weekly advance, while the Dow dropped 0.1%. Europe was flat and Japan rose 0.2% for the week. The Russell 2000 index of small cap stocks reached a record high over the week and is up 8.8% for the year to date.

Of the 339 S&P 500 companies that have reported 4th quarter earnings to date there has been a rise of 7.3% in profits and revenue has gained 5.9%.

M&A activity has surged so far this year after being almost nonexistent after the financial crisis. To date, $160 billion worth of deals have been announced, which is the quickest start to the year since 2005.

Comcast announced it is purchasing the remaining half of NBCUniversal two years earlier than expected as the film and entertainment company has exceeded the cable company’s expectations. The 49% purchase was for $16.7 billion.

American Airlines and USAir have agreed to a merger of the two creating the world’s largest airline.

AB Inbev offered to sell an additional portion of the company in order to salvage its deal with Grupo Modelo in order to satisfy regulators.

Berkshire Hathaway and Brazilian private equity firm 3G Capital agreed to buy Heinz for $23 billion.

Japan announced that GDP contracted at a 0.3% rate in the fourth quarter making it the third quarter in a row of contraction. The fall was more than expected and underscored the need for stimulus efforts. The government said, however, conditions were improving.

Europe’s GDP slipped more than expected in the 4th quarter contracting 2.3% on an annualized basis, its third straight quarterly contraction. It was the fastest rate of contraction since the height of the credit crisis.

Reposted from the Raffa Wealth Management Blog.

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

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