Mergers and acquisitions are starting to be a sign of the times. An unexpected decline in wholesale inventories wasn’t enough to put the markets in the red in early trading, thanks to a slew of M&A deals in the biotechnology and financial sectors.
Abbott Laboratories (NYSE: ABT) is going to buy Facet Biotech Corp. (NASDAQ: FACT) for $450 million. Abbott’s bid bested a failed bid from Biogen Idec Inc. (NASDAQ: BIIB). The move would add immunology and oncology to Abbott’s repertoire. These deals signal more than just the health of aspects of the biotech sector; it’s a sign of renewed confidence in the economic recovery. It wouldn’t be surprising to see more deals in this and other sectors take place in the coming months. iShares Nasdaq Biotechnology (NASDAQ: IBB) is up about 1% this morning.
Wholesale inventories took a surprise 0.2% dip in January, despite the fact that retail sales rose for a 10th consecutive month. What does it mean? Likely that despite the increase in sales, businesses are still cautious about consumer spending. After all, although unemployment remains 9.7%, it’s still historically very high. SPDR S&P Retail (NYSEArca: XRT) is up about 0.8% this morning. [ETFs for the New Retail Climate.]
Confidence in the global economy has declined for the second time this month over lingering concerns about the still-unresolved situation in Greece. The Bloomberg survey of users on six continents found that while more people were optimistic than pessimistic, sentiment in Europe has declined. It’s understandable. Even if this crisis has a firm resolution in place soon, who will be monitoring Greece after that? And what of the other economies considered at risk, particularly Spain and Portugal? So far, there’s been little discussion of a bailout package for other stressed countries. SPDR SJ Euro Stoxx 50 (NYSEArca: FEZ) is up 1.2% this morning. [More on the Situation in Europe.]
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.