Feel good factor reigns!

Setting new records and then breaking it is not new for Wall Street. Once again, the Dow Jones industrials and S&P 500 have touched new peaks, while the Nasdaq closed at its highest point in six years. Investors welcomed positive readings due to growth in the rate of jobs, manufacturing and inflation, as well as a strong earnings report from Dell. All this gathered up the momentum to instigate positive results in the stock market. After a slight slump on Thursday, Friday happened to be a good day. On June 8, the Dow Jones industrial average managed to add 1.19%, the broader S&P 500 index added 1.14% and closed at a peak point, making it the index’s third record close at a stretch while Nasdaq composite gained 1.27% and ended at a new six-year high. The Russell 2000 small-cap index added 0.7%, also finishing at a new peak three days at a stretch. May was the third big month in a row for the Wall Street, with all three major weighing parameters and the Russell 2000 gaining between 3% and 4.5%. The month of June also started off on a positive note as investors welcomed the economic news, including a better-than-expected May jobs report, a strong ISM manufacturing reading and a drop in a key measure of inflation. The reports seemed to suggest the blend of rock-solid growth and gentle inflation that stock investors tend to prefer. However, gains were annoyed off by some unwillingness after the recent run – and by a big sell off in Treasury prices, which sent the yield on the benchmark 10-year note up to 5.12%.

Harry Potter sets up his world in Florida
Universal Orlando Resort is coming up with theme parks inspired by J.K. Rowling’s iconic character Harry Potter in Florida called ‘The Wizarding World of Harry Potter’. The park will have all the famous locations mentioned in the best-selling book and in the blockbuster films and will open in Universal’s Islands of Adventure theme park in Orlando by the end of 2009. According to a filing with Securities and Exchange Commission, the parks will see investment to the tune of $265 million. Universal Orlando Resort is part owned by NBC Universal, a subsidiary of General Electric Co..

Wachovia adds Edwards to its kitty
Continuing with the trend of high profile acquisitions of First Union, Prudential Securities and Golden West Financial Corp., the fourth largest bank of the US, Wachovia is now acquiring A.G. Edwards. The deal for $6.8 billion in cash and stock would make Wachovia the US’s largest retail brokerage firm after Merill Lynch. The shareholders of A.G. Edwards would receive 0.9844 Wachovia shares and $35.80 in cash per AG Edwards shareholding, valuing their stocks at a 16% premium over the last traded price. Called Wachovia Securities, it will have its headquarters in St. Louis with client assets more than $1.1 trillion and an expansive 3,300 brokerage locations. The transaction is expected to close by the fourth quarter of this year.

Suisse’s Enron suit: To pay $61.5 million
Enron Creditors Recovery Corp., (formerly known as Enron Corp.), intimated that Credit Suisse has finally agreed to pay $61.5 million to resolve a lawsuit over the bankruptcy of the former energy trading giant. Enron, entered bankruptcy proceedings in December 2001 after its accounting tricks could no longer hide the billions in debt or make failing ventures appear profitable. This payment will clear all insolvency procedures between the energy major and Credit Suisse. However, Credit Suisse denied of any liability standing to its credit, which is only subject to the approval of the U.S. Bankruptcy Court for the Southern District of New York. John J. Ray III, Enron’s Chairman expressed satisfaction over the arrangement and hopes to resolve the remaining equity transaction cases.

Dell over performs, rings ‘Wall Street’ bell
The expectations in the Wall Street about the financial results of Dell for the fourth quarter of this year were easily surpassed by the company which churned out revenue of $14.6 billion. Financial analysts had predicted the figures to be $13.95 billion or have per share income touching 26 cents but the company gave much higher returns per share at 34 cents. Dell has attributed the success to higher average selling prices that boosted its top line and that a senior leadership restructuring ‘to enhance accountability’ accounted majorly for its transformation. The company has also decided to globally bring down the headcount by almost 10% (9,000 employees). The last quarter’s performance stood at per share earnings of 33 cents on $14.22 billion revenue.

The Gate to Jobs is a matter of friendship!
A line in one of the Beatles song, “You and I have memories longer than the road that stretches out ahead,” is a favourite with one of them and that is how he describes his relationship with the other. They were the youngest when they entered the industry and they are the oldest barons of the same. The two tech titans, Bill Gates and Steve Jobs were in conversation at the D5 conference near San Diego held last month. This rare appearance of the Microsoft Chairman and Apple CEO together made waves and hit headlines everywhere. In the friendly banter, Jobs credited Gates with building the first huge soft ware company in the industry and that too at a time when nobody knew what exactly soft ware was. Complimenting Jobs, Gates went on to say that Jobs has the phenomenal quality of figuring out where the next industry movement would be. Both of them shared similar thoughts on present technology landscape, that of it being, one of the greatest period of invention. While Gates’ prediction for newer devices is that in the times to come there will be ‘A tablet and then another smaller one that you can carry around in your pocket’, Jobs is confident of the PC continuing to remain.

Starting all over again...
British Petroleum (BP) has returned to Libya after thirty long years, with its biggest exploration commitment, ever! BP along with Libya Investment Corporation, its Libyan partner, has inked a major exploration and production pact with National Oil Company (NOC) of Libya. The $900 million agreement was signed by Tony Hayward, Group Chief Executive of BP and Shokri Ghanem, the NOC Chairman. Jointly, the two companies would explore 54,000 square kilometers of Ghadames and Sirt basins, an area equal to ten of operated deepwater blocks of British Petroleum in Angola. It was in 2004, when the United States and the European Union relieved sanctions on Libya aft er it agreed not to pursue nuclear, chemical and biological weapons. This was the time when the country started attracting international oil companies.

Oracle tells SAP: See you in Court...
Oracle Corporation has imposed copyright infringement and breach of contract on Germany based SAP AG, its closest rival. SAP AG was accused of infringement on Oracle’s computers to find secret information about their product so as to have a better chance to roll in new customers. The court case charges SAP with ‘corporate theft on a magnitude scale’ – the language seemingly highlights the increasing cut-throat competition between the two. Oracle alleged that a SAP subsidiary which services Oracle soft ware posted similar solutions. The repairs that SAP suggested even contained a few minor errors that Oracle later helped to fix.

Idol guy, Fuller wants the ‘full’ share Simon Fuller, the creator of Idol series (one of the most popular shows ever) has recently launched a $1.3 billion bid to take private his employer CKX in concurrence with his boss, the US magnate Robert Sillerman. Fuller wants further control in a company where the division he runs contributes a major share of the overall profits but to his dismay, the rewards amounted to £846,000 pay in 2006 and a mere 1.6% stake. The timing of this move by Fuller is a surprise; because CKX had been expected to focus on finding out more celebrity rights to exploit, but the need of the hour is to find a more suitable structure for Fuller – which is supposedly a priority at the moment.

Arch in stone, the two-in-one deal
Archstone-Smith; the real estate investment trust, with a market capitalisation of $12.3 billion, is being acquired by a partnership between Tishman Speyer, the real estate company and Lehman Brothers, the investment bank. The $22.2 billion deal, also includes debt of US’s biggest apartment real estate investment trusts. Archstone- Smith’s portfolio boasts of areas like Washington D.C., Southern California, the New York metropolitan area, Seattle and Boston. The shareholders will receive $60.75 per share, a big premium of 18.8% over the last traded price. Though the deal has been unanimously approved by board of trustees of Archstone, shareholders’ approval is yet to be received. The deal is expected to be completed by third quarter.

Morgan Stanley’s Australian buy
Real estate acquisitions seem to be the flavour of the season. Th e real estate division of Morgan Stanley with $73 billion under management, is aiming to acquire Investa Properties, the Australian real estate firm. The $3.9 billion deal, the second one in a week’s time, would increase Morgan Stanley’s presence in Australia. Each share of Investa has been valued at A$3.08.Th rough this buy out, the New York based investment bank is adding to its portfolio, the largest publicly traded office owner of Australia that has stakes in more than 30 buildings. The total assets under management by Investa stood at A$7 billion at end 2006. The deal to be finalised requires approval by 75% of the shareholders. The shareholders meet is expected to take place in August.

Nazem bids goodbye to Yahoo!
After having spent more than a decade as Chief Technology Officer, Farhad Nazem is retiring from Yahoo Inc. in June. The 45 year old Nazem joined the company in 1996 as Senior VP – Product Development. As part of the company’s restructuring exercise, he was made the head of the technology group. Nazem was also responsible for developing the next advertising platform for Yahoo’s Panama project. Nazem had purposely delayed his retirement until this project was completed. Till the company finds his successor, Jerry Yang, Co-founder, Yahoo, would fill his place. As per a regulatory filing by Yahoo, Nazeem is entitled to receive his salary till the end of June and stock Options granted in 2004, 2005 And 2006.

BHP Billiton gets new chief
Marius Kloppers is succeeding Chip Goodyear as the CEO of BHP Billiton as announced by the company board. Presently, Kloppers holds the position of Group President – Non-Ferrous Materials and is an Executive Director of the company. Since the formation of the Group in 2001, Kloppers has also been the Chief Marketing Officer and Chief Commercial Officer. The outgoing CEO, Goodyear said, “Marius has an excellent strategic mind and delivers on his commitments. He has a very value focused leadership style and will make an excellent CEO.” The new CEO would be taking charge in the Melbourne, BHP Billiton’s headquarters.

Ceridian: Let’s divide it between us!
Minneapolis-based Ceridian, the human resource services firm, is being jointly acquired by THL Partners and Fidelity National Financial (FNF) in a $5.3 billion cash deal. Ceridian shareholders will receive $36 (a 17% premium over Feb. 12,2007 share price) for each share of common stock that they hold. As per the Ceridian board, this sale is the best strategic alternative for maximizing shareholders’ value. The deal is still waiting the shareholders’ and the antitrust’s approval. It’s probable that the private equity company, THL Partners and FNF, would bring in co-investors. While Deutsche Bank Securities and Credit Suisse are providing firm financing commitments, Weil, Gotshal & Manges LLP is acting as legal advisors to THL Partners and FNF.

EMI artistes in ‘You’r’Tube’
Following major music companies like Universal Music, Sony BMG and Warner Music, EMI has also forged a partnership with YouTube, the online video sharing site of Google. Hence it would now be possible for YouTube users to view videos of their favourite EMI artistes which include David Bowie, Cold play, The Decemberists, Fat Boy Slim, Gorillaz, Lily Allen and Norah Jones. Though the financial details of the partnership have not been disclosed, the music company has said in a statement that both the companies and their artistes “would be fairly compensated for their work.” As part of the pact, EMI would also make authorised video content available for YouTube. Earlier this year, YouTube and parent company Google was sued by Viacom, for copyright infringement.

Motorola Inc. unleashes the axe
With the aim to incur more profits, Motorola Inc. has resorted to cutting down an additional 4,000 jobs or so to say 6% of its present employees. With this move, the company would be able to save $600 million by the end of 2008. But, there is lot more which has to be done – ranking its investments, reducing wasteful expenditures and also controlling general and administrative expenses. The main instigating factor was declining trend of yearly profits – to which the company had devised a two-year cost-cutting plan (in January) to improve the sagging financial and operational results. Under this plan, it aimed at sacking 3,500 employees. This act on part of the company would help save around $400 million after the entire process is completed by June 30.

Wal-Mart’s goes on a diet!
Wal-Mart shareholders have a reason to smile. The world’s largest retailer has decided to trim down its store growth (a move to maintain its traditional focus on low prices) in areas like healthcare and environment. It has gone back on its earlier plans and will scale down the number of earlier announced US Supercenter Store openings this fiscal by more than 25%. This would help the company bring down its portion of expenditure by $1.5 billion in the current fiscal year. Moreover, it would enhance the sales of the stores as well! To cut down the fixed expenditure – Wal-Mart has plans to open 190-200 new Supercenters in the US in 2008, the average number standing at 170 for the coming three years. Wal-Mart had said last year, that it will open 265-270 Supercenters in 2008. However, now, around 80 of the Super centers that were scheduled to open next year will now be set up in 2009. Critics who had attacked the company on varied issues like healthcare to wages to buying from China were dismissed by Wal-Mart executives. Instead, Wal-Mart flaunted a bunch of recent initiatives like its $4 generic drug programme and the expansion of its in-store health clinics and much more.