What’s the Story

by CC August 27, 2012 9:20 am • Commentary


U.S. stock futures rose, following the first weekly drop in about two months for benchmark indexes, as Apple (AAPL) Inc. rallied on a $1 billion verdict and investors awaited indications on Federal Reserve stimulus measures.

Apple, the world’s most valuable company, climbed 2.8 percent after a jury found Samsung Electronics Co. infringed six of seven patents for its mobile devices. Google Inc. (GOOG), which offers the Android mobile software, declined 2 percent. Dollar Thrifty Automotive Group Inc. advanced 7.3 percent after Hertz Global Holdings Inc. struck a deal to buy the company for about $2.6 billion in cash. Hertz increased 14 percent.


Gasoline climbed to the highest in almost four months and oil gained the most in a week after a refinery explosion in Venezuela killed 39 people and Tropical Storm Isaac shut rigs in the Gulf of Mexico. U.S. stock futures rose as shares of Apple Inc. rallied.

Gasoline futures jumped 3.3 percent to $3.18 a gallon at 8:21 a.m. in New York and oil advanced 1.3 percent. Nasdaq 100 Index futures rose 0.7 percent as Apple increased 3 percent after its $1 billion court victory over Samsung Electronics Co., which plunged the most in almost four years. The Stoxx Europe 600 Index (SXXP) added 0.4 percent and the euro rose versus 13 of 16 major peers. Spain’s 10-year bonds halted a three-day drop.

About 24 percent of U.S. oil production and 8.2 percent of natural gas output from the Gulf of Mexico has been halted as Isaac strengthened. Venezuela’s Amuay plant, the country’s largest refinery, was shut as firefighters tackled flames following the Aug. 25 blast.


Spain expects to use about 60 billion euros, or $75 billion, of the 100 billion euros of bank rescue financing offered by European finance ministers in June, according to the Spanish economy minister, Luis de Guindos.

Mr. de Guindos also said Madrid could make stronger fiscal commitments if the European Central Bank eased Spain’s borrowing costs by buying its government bonds.

Next month could prove decisive for Spain and other ailing economies at the heart of the euro debt crisis. A proposal for an ambitious bond-buying program will be on the agenda of the central bank’s governing council meeting on Sept. 6.


Samsung Electronics shares slumped 7.5 percent on Monday, wiping more than $12 billion off the South Korean giant’s market value, as a sweeping victory for Apple (AAPL) in a U.S. patent lawsuit raised concerns about its smartphone business — its biggest cash cow.

Samsung, which says it will contest the verdict, was ordered to pay $1.05 billion in damages after a San Jose jury found it had copied critical features of the hugely popular iPhone and iPad and could face an outright sales ban on key products…

… Apple’s triumph was also seen as a blow to Google (GOOG), whose Android software powers the Samsung products that were found to infringe on Apple patents.


Tiffany [TIF  58.50        ] –  The luxury goods retailer is reporting second-quarter profit of $0.72 per share, one cent shy of estimates, with sales also falling short of consensus. Tiffany cites economic weakness in a number of key weakness.

AOL [AOL  32.92        ] – AOL is declaring a special dividend of $5.15 per share, as part of a move to return $1.1 billion to shareholders. That’s the amount AOL received when it sold about 800 patents to Microsoft [MSFT  30.56        ]back in April.

Apple [AAPL  663.222        ] – The company is hitting all-time highs once again, following its legal victory over Samsung Electronics late Friday in the ongoing patent dispute between the two. Apple has been awarded over $1 billion after a jury found that Samsung infringed a number of Apple patents. (Read More: Samsung Shares Slump, but No Need for Panic Yet.)

Nokia [NOK  3.08        ] – Nokia shares are getting a positive bump following the Apple/Samsung verdict, on hopes that it may benefit from Samsung’s setback. Investors are speculating that Nokia could gain market share if some Samsung smartphones are forced off the market.

Deltek [PROJ  14.01        ] – The enterprise software company is being bought by private equity firm for $1.1 billion in cash, or $13 per share. The price is actually under the Friday close of $14.01, but 24 percent above Deltek’s price on June 11, just before it disseminated information on its sales process to interested parties.

ASML Holding [ASML  57.77        ] – The Dutch chipmaker has a new stakeholder — none other than Samsung, which has taken a 3 percent stake. It’s following in the footsteps of Intel [INTC  24.91        ], which bought 15 percent of ASML in July, and TSMC, which bought 5 percent earlier this month.

United Parcel Service [UPS  75.72        ] – The delivery company expects to take a third-quarter charge of $896 million related to the restructuring of its pension plans.

Sanofi [SNY  40.89        ] – Researchers say the drugmaker’s best-selling insulin treatment Lantus may slow the buildup of deposits which clog heart arteries. Lantus currently has worldwide sales of about $5 billion.

Dollar Thrifty [DTG  81.00        ] – The car rental company is being bought by Hertz Global [HTZ  13.15        ] for $2.3 billion in cash or $87.50 per share. That’s an 8 percent premium over Friday’s closing price for Dollar Thrifty shareholders. Separately, Hertz says it’s selling its Advantage car rental unit to Franchise Services of North America and Macquarie Capital for an undisclosed amount.

IAC/Interactive [IACI  51.50  —  UNCH    ] – IAC is buying information website About.com from The New York Times Co. [NYTA  Unavailable      ()   ] for $300 million in cash. About.com will be absorbed by IAC’s Ask.com unit.