Call it an end of Summers celebration. Stocks surged early this morning on the news that Larry Summers withdrew himself from consideration for the job as Federal Reserve Chairman. Summers sent a letter last night to President Obama saying his nomination for Fed Chair would create too many troubles for the administration and the nation. Vice Chair Janet Yellen now emerges as the sole frontrunner to replace Ben Bernanke at the end of his term. The Dow moved within 1% of its all-time high and the S&P 500 once again topped 1,700, before paring some gains late in the session. The Nasdaq closed slightly negative.
Package and paper maker Boise (BZ) skyrocketed 26% percent to $12.55 a share on news that Packaging Corporation of America (PKG) is offering exactly that amount in a bid to acquire the company. Packaging Corp, also rose more than 10% on news of the deal, which has a total price tag of $1.27 billion. The deal would raise Packaging Corp's. volume in the corrugated products business by about 30%. The deal is expected to close by year's end.
Internet security company Qihoo (QIHU) fell more than 5% as it lost the chance to buy Sohu's (SOHU) popular Sogou search business. Meanwhile, Sohu rose 6% on the same news, which is that Tencent Holdings is investing $448 million in the company. Qihoo is now China's second most popular search engine and is trying to mount a challenge to leader Baidu (BIDU). The stock has tripled so far this year.
Vornado Realty Trust (VNO) rose but J.C. Penney (JCP) fell 1% on news that the former is selling its 6% stake in the retailer. Vornado's Chairman and CEO Steve Roth has also resigned from the Penney board of directors. The move traces the exit of activist investor Bill Ackman who also resigned from the board and subsequently sold his stake in the troubled retailer. At one point Vornado had a 9.9% stake in J.C. Penney, but it unloaded a substantial portion of its holdings at a loss in March.
Both Las Vegas Sands (LVS) and Wynn Resorts (WYNN) closed flat despite a downgrade. ISI Group moved both companies to neutral from buy. Sands stock has risen 30% so far this year. Wynn stock has climbed 27% in that time.
- Investment & Company Information
- Larry Summers
- Janet Yellen
- President Obama