A $31 billion acquisition deal by one of the largest oil corporations and a $10 billion lifeline from oil-rich Abu Dhabi extended to a Dubai company have turned stocks and exchange traded funds (ETFs) positive this morning. Abu Dhabi gave Dubai $10 billion to save Dubai World from default today, easing investor fears about the city-state’s finances. After the news was announced, the stock market climbed more than 10%, reports Adam Schreck for the Associated Press. About $4 billion of the money will be used to pay off loans from its property division; the rest will be used to shore up the company itself.
Exxon Mobil (NYSE: XOM) will by XTO Energy for $31 billion in an all-stock deal. Exxon has been moving to capitalize on the fast-growing supply of natural gas in the United States. The move has analysts thinking that more acquisitions could be coming, and potential targets include companies involved in natural gas, reports Mark Williams for the Associated Press. iShares Dow Jones U.S. Energy (NYSEArca: IYE) is up more than 1% on the news; Exxon is 25% of the fund.
Citigroup (NYSE: C) has made itself the last of the big banks to exit the TARP program after striking a deal to pay back $20 billion to taxpayers. The bank’s CEO wanted to exit the program because pay constraints were making the company subject to the poaching of its employees by rival banks on Wall Street, reports Bradley Keoun for Bloomberg. Financial Select Sector SPDR (NYSEArca: XLF) is trading flat so far this morning; Citigroup is 4%. (Read more about the financial sector here).
Industrial output in the eurozone declined in October after five straight months of growth, reports Pan Pylas for the Associated Press. The 0.6% decline was expected by analysts after reports showed that German industrial output fell 1.8% that same month. iShares MSCI EMU (NYSEArca: EZU) is trading up about 1% this morning. (More stories about Europe are here).
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.