Monday was a positive day for the stock market, with major market benchmarks picking up between 0.5% and 1% on the day. Earnings season is hitting its peak this week, and several of the most important stocks in the market are set to report their latest results. Investors are looking forward to seeing whether major companies have sustained their success over the summer months, and fairly dovish comments from Federal Reserve officials about the future path of interest rates also helped support stocks. In addition, some stock-specific news helped boost some names, and among the best performers were B/E Aerospace (BEAV), Luxottica Group (LUXTY), and Sprint (S).
Image source: B/E Aerospace.
B/E Aerospace soars on takeover bid
B/E Aerospace jumped 16% after the aerospace company received a buyout offer from Rockwell Collins (COL). The deal will pay B/E Aerospace shareholders a combination of stock and cash with a total value of roughly $62 per share, which is well above the stock's Friday close of just over $50. By making the purchase, Rockwell hopes that it can boost the amount of systems and components that it provides to major aircraft manufacturers, with Rockwell focusing largely on avionics and electronics while B/E has traditionally focused on airplane interior furnishings like seats and onboard restroom facilities. Rockwell shares lost ground, likely because of the opportunity for arbitrage, but many are optimistic that the move should help prospects for both companies going forward.
Luxottica reassures investors of a strong finish to the year
Luxottica Group picked up 7% in the wake of its reiterating that it would manage to match its full-year sales target. The luxury sunglasses manufacturer said that its sales rose 1.2% in the third quarter, with retail sales gains outweighing a slight decline in revenue from Luxottica's wholesale wing. At the same time, investors keyed in on CEO Massimo Vian's comments that the company would hit its revenue guidance, which it had reduced three months ago. Even though Luxottica also said that sales growth would likely lag bottom-line performance, shareholders seemed to be comfortable with the situation. Though some fear that the high-end retail market in the U.S. could hurt Luxottica, the company is in a good position to succeed if it can continue to focus on its best growth possibilities.
Sprint moves upward in sympathy
Finally, Sprint climbed 6%. The entire telecom industry was at the center of most investors' attention today as a result of the deal for AT&T to buy Time Warner in a huge $85 billion takeover. The move threatens to create a vertically integrated empire whereby a single company could both produce interesting content and then deliver it to customers through wireless networks. Because of the competitive pressure the merger would put on industry peers, some believe that content creators will want to buy up wireless networks of their own, and that puts Sprint in a potentially strong position to court would-be buyers. It's too early to tell whether the deal will actually go through, let alone spawn copy-cat buyouts that might involve Sprint. Nevertheless, investors weren't afraid to bet on greater interest going forward.