Stocks rose in a low-volume session Friday as investors looked forward to earnings reports in coming weeks. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) traded in narrow range and closed with nice gains. Financials climbed in the wake of a strong report from JPMorgan Chase; healthcare was the only sector to lose ground.
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Data source: Yahoo! Finance.
As for individual stocks, Chevron (NYSE: CVX) announced plans to buy Anadarko Petroleum (NYSE: APC) in a massive consolidation of oil and gas producers, and Walt Disney (NYSE: DIS) delighted investors with details about its upcoming streaming service.
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Chevron sets it sights on Anadarko
Chevron surprised Wall Street with a $50 billion cash-and-stock offer to buy Anadarko Petroleum, in a bid to bolster its position in oil production in U.S. shale and the Gulf of Mexico. Anadarko's shares shot up 32% to $61.78 on the news and those of Chevron slipped 4.9% to $119.76.
The deal is structured as 75% stock and 25% cash, with the oil and gas giant paying $16.25 in cash and 0.3869 newly issued Chevron shares for every Anadarko share. That values Anardarko stock at $62.60 based on closing prices today.
If the transaction wins Anadarko shareholder approval, Chevron will add to its leading position in the fast-growing Permian Basin and acquire attractive acreage in Colorado's DJ Basin. Anadarko also has complementary deepwater wells in the Gulf, liquefied natural gas facilities in Mozambique, and a strategic stake in pipeline operator Western Midstream Partners LP, whose units soared 8.4% today.
The companies expect $1 billion in operating cost savings and another $1 billion savings in capital expenditures. The deal triggered speculation of a new round of consolidation in energy companies, lifting shares of potential acquisition targets.
Disney+ gets an enthusiastic reception from investors
Disney unveiled its Disney+ streaming service at its investor day yesterday, and investors gave the company a standing ovation, lifting the stock 11.5%. The service will cost $6.99 per month, or $69.99 for an annual plan, significantly undercutting Netflix, which recently raised prices.
The service will launch Nov. 12 with significant new, original content and offerings from Disney's extensive libraries and assets coming from the Fox acquisition. In the first year, Disney+ will feature 25 original series and 10 original films, documentaries, and specials, along with 7,500 episodes and 500 movies from the company's trove of content. It will also have 30 seasons of The Simpsons from Fox available at the launch.
Disney expects the service to be profitable by 2024, when it anticipates 60 million to 90 million subscribers will be watching its offerings of 10,000 episodes and over 720 movies.
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