Exchange traded funds (ETFs) are rising at the opening of trading Monday on corporate deal-making and expectations for a strong earnings season.
Gold and silver spot prices gained Monday, with silver trading near $42 an ounce, while gold set a fresh record in Europe before paring gains. Silver spot prices were quoted at $41.53, up 2.3% from the previous session’s close, but down from its intra-session high of $41.98 an ounce. Gold traded as high as $1,478.00, later easing to $1,474.40 an ounce in afternoon hours in East Asia, up from $1,472.70 in late Friday trades in New York. The Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) is down slightly in early trading.
The dollar posted small gains against most of its major rivals on Monday, stabilizing in part due to relief over Friday’s agreement to prevent a U.S. government shutdown. The dollar index, a measure of the U.S. unit against a basket of six major rivals, traded at 74.963, up slightly from 74.892 in North American hours late Friday after briefly pushing back above the 75 level. But the lack of a stronger rebound by the greenback indicates that the attribution of the dollar’s recent losses to budget worries was misplaced, wrote strategists at Commerzbank in Frankfurt. “In our view, it is not the U.S. budget but U.S. monetary policy which constitutes the largest negative factor for the dollar,” they said, in a research note. “The [foreign-exchange] market reaction confirms our theory.” The PowerShares DB U.S. Dollar Index Bullish ETF (NYSEArca: UUP) is trading flat early Monday.
European markets were mostly lower Monday, with shares of car makers providing downward pressure after a broker downgrade, while news of another earthquake in Japan added to investors’ jitters. The Stoxx Europe 600 index fell 0.4% to 280.57, after gaining 0.6% last week. Koen De Leus, strategist at KBC Securities Bolero in Brussels, said inflation will also be a key theme for markets this week. The U.K. releases consumer-price data Tuesday, while the Euro area and the U.S. will issue data Friday, all for March. The iShares MSCI United Kingdom Index ETF (NYSEArca: EWU) rose almost 1% on Monday.
Global Crossing Ltd, (NasdaqGS: GLBC), the Florham Park, N.J., provider of telecom services to enterprises, government and telecom carriers, definitively agreed to be acquired by Level 3 Communications Inc. (NasdaqGS: LVLT ) for stock valued at $23.04 a share. Level 3 is the Broomfield, Colo., provider of fiber-based communications services. Terms call for Level 3 to issue 16 of its shares for each share of Global Crossing. The deal price is a 56% premium to GLBC’s closing price Friday of $14.80. The deal value, the companies said in a Monday statement, is $3 billion including Level 3’s assumption of $1.1 billion of Global Crossing’s net debt. The ProShares Ultra Telecommunications ETF (NYSEArca: LTL) gained almost 4% in early trading.
Gregory A. Clay contributed to this article.
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