Business in brief: Earnings slow market rally
NEW YORK – Investors are still building on a stock market rally even when the news isn’t all great.
Stocks edged higher Monday after zigzagging in subdued trading on mixed economic and corporate earnings reports.
The Dow Jones industrial average rose only 15 points. But modest moves in the market’s indicators belie larger forces at work: Investors aren’t dumping stocks, even in the face of downbeat news.
Disappointing earnings from Verizon Communications Inc., Aetna Inc. and Corning Inc. kept the market’s gains in check, adding another pause to a powerful rally that has sent major indexes rocketing 11 percent in just two weeks.
SEC makes rule permanent
WASHINGTON – Federal regulators on Monday made permanent an emergency rule aimed at reducing abusive short-selling, put in at the height of last fall’s market turmoil.
The Securities and Exchange Commission announced that it took the action on the rule targeting so-called “naked” short-selling, which was due to expire Friday.
Short-sellers bet against a stock. They generally borrow a company’s shares, sell them, and then buy them when the stock falls and return them to the lender – pocketing the difference in price.
“Naked” short-selling occurs when sellers don’t even borrow the shares before selling them, and then look to cover positions sometime after the sale.
At the same time, the SEC has been considering several new approaches to reining in rushes of regular short-selling that also can cause dramatic plunges in stock prices.
Agilent says it will buy Varian
NEW YORK – Scientific instrument maker Agilent Technologies said Monday it will buy Varian Inc. for $1.5 billion in cash, or $52 per share.
Agilent is paying a premium of 33 percent to Friday’s $39.20 closing price for Varian. Varian, of Palo Alto, Calif., reported $1.01 billion in revenue in fiscal 2008. Scientific instruments accounted for $838.7 million in sales, and the remainder came from vacuum technologies.
The boards of both companies approved the deal, which is expected to close by the end of the year pending approval from shareholders and regulators.
Santa Clara, Calif.-based Agilent said the acquisition gives it more products in the life sciences, environmental and materials businesses, and believes the deal will add to its profits in 2010.