King Pharmaceuticals Inc. said it is prepared to take its bid for Alpharma Inc. directly to shareholders after the company rejected King's $1.4 billion buyout overture. King disclosed the $33 a share offer publicly for the first time Friday. Alpharma surged $10.47, or 44 percent, to $34.51, while King rose 95 cents, or 8.5 percent, to $12.19.
Stocks jump as oil plunges, Bernanke indicates Fed won't likely raise interest rates soon
NEW YORK (AP) -- Wall Street capped a volatile week with sharp gains Friday as oil prices tumbled and after Federal Reserve Chairman Ben Bernanke said inflation pressures are likely to moderate. The Dow Jones industrial average rose nearly 200 points.
Speculation that Lehman Brothers Holdings Inc. could be sold helped buoy the financial sector and the overall market. Analysts warned this week that the investment bank could book large write-downs for bad debt. But reports Friday that Korea Development Bank is considering buying the company sent investors rushing for the stock. Lehman rose 69 cents, or 5 percent, to $14.41 but finished well off its highs of the session.Investors also appeared cheered by an inflation forecast from Bernanke who said at the Kansas City Fed's annual economic symposium that inflation pressures should moderate this year amid tepid economic growth. But he also added that the inflation forecast remains "highly uncertain."John Massey, senior portfolio manager at AIG SunAmerica Asset Management, said investors are encouraged by Bernanke's comments on interest rates and by the possibility of a buyer for Lehman."We're seeing the potential for maybe another white knight," he said, referring to prospects of a deal to acquire all or part of the investment bank.The health of the financial sector and rising inflation are two of the market's greatest concerns. Although Bernanke refrained from making predictions about inflation, the market was mollified when light, sweet crude plunged $6.59 to settle at $114.59 a barrel on the New York Mercantile Exchange, after surging by more than $5 a barrel on Thursday.The Dow rose 197.85, or 1.73 percent, to 11,628.06, near its highs of the session.Broader stock indicators also rose. The Standard & Poor's 500 index rose 14.48, or 1.13 percent, to 1,292.20, and the Nasdaq composite index rose 34.33, or 1.44 percent, to 2,414.71.The run-up Friday left stocks with mostly modest losses for the week that again saw a series of triple-digit moves in the Dow. The Dow is down 0.27 percent, the S&P 500 is off 0.46 percent and the technology-heavy Nasdaq is down 1.54 percent.Bond prices pulled back as investors rushed from the safety of government debt to stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.87 percent from 3.83 percent late Wednesday.The dollar rose against other major currencies, while gold prices fell.Massey cautioned against making too much of the market's moves given the light volume this week. With traders squeezing in late-summer vacations, Wall Street has shown erratic trading. The Dow industrials lost more than 300 points over Monday and Tuesday before ending moderately higher Wednesday and finishing mixed Thursday."The light volumes are really sort of the reasons behind why you've got some outsize moves. I think the issues over all for the economy and the market are fairly well understood," he said. "The market is of this mind-set that we're going to continue to be flattish to down."He doesn't expect the stock market to more accurately reflect investor sentiment until after Labor Day, when trading volumes should pick up. Until then, he'll be looking next week at readings on consumer confidence and unemployment to determine where the economy might be headed.Remarks Friday from Bernanke and investor Warren Buffett appeared to dim Wall Street's hopes that mortgage financiers Fannie Mae and Freddie Mac might be able to get by without a government bailout. While such a move could help prop up the government-chartered companies, which together hold or back nearly half the nation's mortgage debt, it could also wipe out shareholder equity.While Bernanke didn't mention them by name he said he said one of the critical questions facing the country is how to strengthen the financial system and guard against the "moral hazard" of companies making risky choices thinking that the government will ultimately offer a safety net.Buffett said on CNBC that Fannie and Freddie are too big to fail but that shareholder equity in those companies can be lost.Fannie Mae rose 15 cents to $5, while Freddie Mac fell 35 cents, or 11 percent, to $2.81.Linda Duessel, the equity market strategist at Federated Investors, said the financial sector is key to a broader recovery on in stocks, which are down more than 10 percent this year."We need to absolutely find a bottom in financials to really believe that the bear can be behind us," she said, referring to the pullback in stocks since last fall.While most sectors gained ground Friday, some materials companies pulled back as commodity prices fell. United States Steel Corp. fell $5.44, or 3.9 percent, to $133.76, while miner Freeport-McMoRan Copper & Gold Inc. declined $3.06, or 3.3 percent, to $90.60.In corporate news, Gap Inc. rose 87 cents, or 4.6 percent, to $19.88 after reporting late Thursday that profits in the most recent quarter rose 51 percent from a year earlier, thanks to tight inventory and cost control.
Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where consolidated volume came to a light 3.62 billion shares compared with 3.94 billion shares traded Thursday.
The Russell 2000 index of smaller companies rose 12.35, or 1.70 percent, to 737.60.
Overseas, Japan's Nikkei stock average fell 0.68 percent. Britain's FTSE 100 rose 2.52 percent, Germany's DAX index rose 1.69 percent, and France's CAC-40 advanced 2.23 percent.
The Dow Jones industrial average ended the week down 31.84, 0.27 percent, at 11,628.06. The Standard & Poor's 500 index finished down 6.00, or 0.46 percent, at 1,292.20. The Nasdaq composite index ended the week down 37.81, or 1.54 percent, at 2,414.71.
The Russell 2000 index finished the week down 15.77, or 2.09 percent, at 737.60
The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended Friday at 13,185.26, down 86.62 points, or 0.65 percent, for the week. A year ago, the index was at 14,896.21.
Garment makers cash in on big foreign orders
The orders, which amount to a three-year high for the industry, were made out to 30 local garment manufacturers, said Henrietta Lake, the senior consultant of U.S. agency for international development project Senada, on Thursday.
"The quality of Indonesian garment products are better than other countries, including
She said
The orders were place by companies including Abercrombie & Fitch, Dewhirst, HanesBrands, J.Crew, JCPenney, GAP, Jones Apparel, Li & Fung, Linmark, Liz Claiborne, Nike, PIERS, Ralph Lauren, Target, Vanity Fair and Walmart.
Executive director of national textile research institute Indotextiles Redma Gita Wirawasta said GAP had placed an order for 12 million to 14 million items worth $100 million and Walmart had ordered 11 million to 13 million items valued at $80 million.
SOT and Marks & Spencer submitted orders for 8 million items, worth $60 million.
"Orders from other global garment manufacturers like Target, Nike, Adidas, Levi's, Arrow, Van Houesen, only reach less than $50 million... However, their orders grow by an average of 10 percent annually," said
The country is the global garment market's 10th biggest provider and the
The country's garment exports reached $2.1 billion in the first semester of this year, up 6 percent from last year.
The country's textile and garment industries are enjoying a revival after being devastated by the 1997 Asian financial crisis, which left companies unable to expand capacity and invest in new machines.
Last year, the Industry Ministry disbursed Rp 255 billion (US$27.87 million) in interest rate subsidies and soft loans to 92 textile and garment manufacturers for purchasing new machinery.
Stocks jump on prospect of Lehman buyout
Stocks jumped Friday as oil retreated from this week's rally and as speculation grew that Lehman Brothers Holdings Inc. could be sold.
Worries about the embattled Lehman re-emerged this week as analysts lowered their estimates for the investment bank and forecast large additional write-downs. However, a Ladenburg Thalmann analyst upgrade on Lehman to "buy" helped stocks finish mixed on Thursday; he said he believed Lehman has become a hostile takeover candidate.
And on Friday, after the previous day's media reports that discussions between Lehman and a group of Korean banks had fallen through, another report emerged that Korea Development Bank is considering buying the company. Lehman rose $1.37, or 10 percent, to $15.09.
Investors appeared cheered by an inflation forecast from Federal Reserve Chairman Ben Bernanke who said at the Kansas City Fed's annual economic symposium in
John Massey, senior portfolio manager at AIG SunAmerica Asset Management, said investors are encouraged by Bernanke's hints that he's not likely to soon raise interest rates and by the possibility of a buyer for Lehman.
"We're seeing the potential for maybe another white knight," he said, referring to prospects of a deal to acquire all or part of the investment bank.
In midday trading, the Dow rose 138.17, or 1.21 percent, to 11,568.38 after being up more than 200 points.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 9.94, or 0.78 percent, to 1,287.66, and the Nasdaq composite index rose 22.85, or 0.96 percent, to 2,403.23.
Light, sweet crude fell $2.51 to $118.67 a barrel on the New York Mercantile Exchange, after surging by more than $5 a barrel on Thursday.
Bond prices pulled back as investors rushed from the safety of government debt to stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.88 percent from 3.83 percent late Wednesday.
The dollar rose against other major currencies, while gold prices fell.
Massey cautioned against making too much of the market's moves given the light volume this week. With traders squeezing in late-summer vacations, Wall Street has shown erratic trading. The Dow industrials lost more than 300 points over Monday and Tuesday before ending moderately higher Wednesday and finishing mixed Thursday.
"The light volumes are really sort of the reasons behind why you've got some outsize moves. I think the issues over all for the economy and the market are fairly well understood," he said. "The market is of this mind-set that we're going to continue to be flattish to down."
He doesn't expect the stock market to more accurately reflect investor sentiment until after Labor Day, when trading volumes should pick up. Until then, he'll be looking next week at readings on consumer confidence and unemployment to determine where the economy might be headed.
Remarks Friday from Bernanke and investor Warren Buffett appeared to dim Wall Street's hopes that mortgage financiers Fannie Mae and Freddie Mac might be able to get by without a government bailout. While such a move could help prop up the government-chartered companies, which together hold or back nearly half the nation's mortgage debt, it could also wipe out shareholder equity.
While Bernanke didn't mention them by name he said he said one of the critical questions facing the country is how to strengthen the financial system and guard against the "moral hazard" of companies making risky choices thinking that the government will ultimately offer a safety net.
Buffett said on CNBC that Fannie and Freddie are too big to fail but that shareholder equity in those companies can be lost.
Fannie Mae fell 44 cents, or 9.1 percent, to $4.41, while Freddie Mac fell 62 cents, or 20 percent, to $2.54.
While most sectors gained ground Friday, some materials companies pulled back as commodity prices fell. United States Steel Corp. fell $5.06, or 3.6 percent, to $134.14, while miner Freeport-McMoRan Copper & Gold Inc. declined $1.54 to $92.12.
In corporate news, Gap Inc. rose 99 cents, or 5.2 percent, to $20 after reporting late Thursday that profits in the most recent quarter rose 51 percent from a year earlier, thanks to tight inventory and cost control. The results were better than expected.
King Pharmaceuticals Inc. said it is prepared to take its bid forApharma Inc. directly to shareholders after the company rejected King's $1.4 billion buyout overture. King disclosed the $33 a share offer publicly for the first time Friday. Alpharma surged $10.17, or 42 percent, to $34.21, while King rose 78 cents, or 6.9 percent, to $12.02.
Road block lifted, Bayan unit resumes coal mining operations
PT Bayan Resources announced on Friday the mining operations of a subsidiary in
Bayan director Jenny Quantero said the subsidiary, PT Perkasa Inakakerta, could transport coal again after a road connecting parts of its mining area and Lubuk Tutung port in Bengalon had been blockaded by forest rangers for 12 days.
"The blockade has been lifted by the Forestry Police, so PT Perkasa Inakakerta's trucks can once again transport coal to the port as usual," Jenny said on Friday.
A joint team of rangers closed the roads Aug. 10, after Interim East Kutai Regent Irsan Noor ordered Perkasa to halt its operations in some of their concessions in
Irsan had also ordered PT Kaltim Prima Coal, a subsidiary of PT Bumi Resources, to halt its production for the same reason.
In a media statement, Perkasa received confirmation from the Forestry Ministry that "the disputed area falls under a so-called multiple-use concession, and therefore Perkasa had complied with all appropriate regulations".
Multiple-use concession refers to forest areas designated for commercial purposes other than wood-related industries.
Jenny said the blockade did not damage the company's coal production.
"Our distribution was disrupted slightly (because of the road block), but overall our production remained fairly normal. The blockade had no impact on Bayan's total production as Perkasa is a new mine and is not one of our major production sources."
Perkasa begun operating in April 2007 in an area covering more than 20,037 hectares, and is one of eight mining subsidiaries of Bayan.
Through its mining subsidiaries, Bayan owns the rights to a total 81,265 hectares of land in East and South Kalimantan, and is
The company is expecting to increase its coal production to 9 million tons this year from 4.7 million tons last year.
The 2008 projected sales volume is 9.9 millions tons, up from 7.1 million tons last year.
The company estimates its revenue to almost double to US$700 million, from $376 million last year. Net profit is expected to reach $100 million this year, more than tripple last year's profit of $27.5 million.
