A New Low. Meanwhile, the number of pending home sales has fallen to 7.7%, a new low set in January. The National Association of Realtors seasonally adjusted index of pending sales contracts fell 7.7% to 80.4 in January from a downwardly revised December reading of 87.1.
Economic hardships such as job loss, instability and falling home values are turning potential buyers away from the housing market. Pending sales were down in every region but the West, where soaring foreclosures have made prices especially attractive for buyers.
Takeover Bid. In an aggressive attempt to defend the company, Genentech claimed that the $42 billion bid from Roche greatly undervalued the biotechnology company and would undermine the innovative culture. Three independent Genentech directors advised shareholders to reject Roche’s latest proposal to buy the 44% of the company it does not own at $86.50 a share, after rejection of its $89 bid last summer.
Andrew Jack and Jennifer Macintosh for The Financial Times report that the offer conditions give Roche the option to cancel or amend its offer, which is scheduled to expire on March 12, on a number of grounds including if any one of four indexes – including the Nasdaq or S&P 500 – lose more than 15% from Feb. 6. By yesterdays’ close, the S&P 500 had lost 19%.
- Biotech HOLDRs (BBH): down 8.3% year-to-date; up 0.6% for three months; Genentech is 41.9% of assets