Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
Wall Street and the S&P 500 (SNPINDEX:^GSPC) today decided to take a breather from the rampant volatility of the past week, with the index gaining modestly in anticipation of a slew of earnings and economic data later this week.
After Wednesday, we can expect weekly initial jobless claims figures, which fell back below a seasonally adjusted 350,000 last week, as well as retail sales figures for January, industrial production for last month, and the Thomson Reuters/University of Michigan consumer sentiment reading for February. With all of this data expected to come out Thursday or Friday, the march to Valentine's Day could be volatile.
On the earnings front, it's a huge week for the materials and energy sector, with names like Apache, Cliffs Natural Resources, Mosaic, and Total all reporting in the next few days.
With little in the way of overseas economic news, the S&P 500 coasted into a 2.82 point gain (0.16%) to close at 1,799.84, its third straight day of gains.
Leading all stocks to the upside today was Augusta Resource (UNKNOWN:AZC.DL), which gained 29.4% after rival HudBay Minerals (NYSE:HBM) made a tender offer to acquire the development-stage mining company over the weekend. Under the terms of the all-stock deal, Augusta shareholders would receive 0.315 shares of HudBay for each common share of Augusta, with the market value of the deal, when announced, being roughly $489 million in enterprise value. With HudBay down notably today and Augusta up well beyond the buyout offer price, investors' view is that a higher bid may be needed to purchase Augusta. While I believe that Augusta's Rosemont project, which is projected to possess just shy of 6 billion pounds of copper, will be an eventual success, I wouldn't bet on HudBay boosting its premium or another suitor stepping up to the plate at this point in time. Augusta's board plans to weigh the offer this week.
Sticking with buyout offers, shares of digital map content and navigation-based solutions provider AutoNavi Holdings (UNKNOWN:AMAP.DL) soared 24.4% after Alibaba offered to purchase its remaining unowned stake in the company for $1.58 billion. The tender offer values AutoNavi at $21 per share, about a 27% premium to its closing price on Friday, and would be conducted in cash. AutoNavi's board, like Augusta's board, plans to discuss the offer this week. Shareholders, however, should be thrilled with the offer considering that AutoNavi's sales are headed backward and the company is largely expected to lose money for the foreseeable future.
Finally, fuel-cell system developer Plug Power (NASDAQ:PLUG) shot higher by 14.5% after announcing a new contract order with a major North American retailer to supply more than "1,500 GenDrive [proton exchange membrane] fuel cell power units coupled with multi-year contracts for GenFuel hydrogen, GenFuel fueling infrastructure, and GenCare service." Plug Power's GenDrive, which will be used to replace existing lead-acid batteries in forklifts, will be installed across six distribution centers within the U.S. over the next two years. The move, as Plug Power noted, should help this unidentified retailer reduce costs and improve productivity. Plug Power itself is still a long way from being profitable, but this is another key step in demonstrating the viability of its alternative energy solution.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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