Today's headlines include a bid from United Technologies (UTX), a new head man at E*Trade Financial (ETFC), an upgrade for Kohl's (KSS), and a lost contract at Boeing (BA). Here's what you need to know about today's stocks on the move.
United Technologies
Late last night, United Technologies (UTX: sentiment, chart, options) presented a proposal to acquire Diebold. The North Canton, Ohio-based Diebold (DBD: sentiment, chart, options) produces automatic teller machines, voting terminals, retailing systems, and other technology. UTX's bid checks in at $40 per share, or $2.63 billion. The bid is 66% higher than DBD's Friday close of $24.12, and the stock is 65% higher in pre-market trade at $39.83.
UTX went public with this offer after DBD's board refused an earlier takeover proposal. In addition, UTX has stated that it could conduct a due-diligence financial review, adding that it might be prepared to boost the $40 deal price.
As stated earlier, DBD is trading slightly below the bid price in pre-market trade. UTX is trading slightly lower, but is set to give the 70 level a stern test today. This level has provided support in the past, and is slightly north of UTX's 20-month moving average. If 70 can hold as support, it could allow the 20-month trendline to bolster any support.
E*Trade Financial
This morning, E*Trade Financial (ETFC: sentiment, chart, options) announced that it is appointing Donald Layton as its new chief executive officer. Layton has been acting as chairman for the embattled online brokerage since November, when Citadel Investment Group added $2.5 billion to ETFC's coffers. Layton previously served as vice chairman of investment bank J.P. Morgan Chase. The terms of Layton's new contract state that his sole compensation for the current and next calendar years will come solely in the form of equity.
The shares are set to open slightly higher this morning, but will still be looking up at the $5 level once the opening bell sounds. Moreover, the equity's 20-week moving average is descending into the picture and is poised to continue in an oppressive role.
Kohl's
Retailer Kohl's (KSS: sentiment, chart, options) was awarded an upgrade by J.P. Morgan this morning, 2 days after the retailer reported fourth-quarter earnings. On Thursday, KSS announced that fourth-quarter earnings dropped 15% as sales edged 1% higher. This morning's upgrade cited the belief that the firm can achieve its guidance and has a "smart growth plan amid a difficult retail environment." The brokerage also stated, "while dark clouds still surround the consumer today, Kohl's has built this into its 2008 budget, which should limit excess inventory build and gross profit margin erosion." Finally, the analyst noted that KSS's fiscal 2008 earnings guidance of $3.15 to $3.30 per share is "realistic and achievable," even though the top rail of the guidance is 9 cents short of the consensus estimate.
The shares are set to open slightly higher, taking out potential resistance at the 45 level. Such a move would allow this level to act as support, as it has in the past.
Boeing
Aerospace firm Boeing (BA: sentiment, chart, options) finds itself trading more than $3 lower in pre-market action thanks to news that the U.S. Air Force awarded a $35-billion contract to 2 of the firm's competitors. Although the contract was expected to go to BA, European Aeronautic Defense and Space Co., along with Northrop-Grumman, were given the deal. One analyst noted that Northrop may finally shed its "Charlie Brown" image of being the "good company that can't get the big awards."
This news prompted 2 analysts to predict a $2 drop in the regular trading session. One of the analysts stated the belief that BA lost the contract because it has struggled to fill tanker orders in recent years. Word has it that BA may protest the decision, but there is likely to be no reversal from the Air Force.
For more commentary on today's market-moving news from me and my colleagues Andrea, Jocelynn, Elizabeth, Joseph and Beth, please visit our Schaeffer's Daily Market Blog section throughout the trading day.
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