Herbalife is Investigated and Oracle Makes an Acquisition: Morning Buzzers
Stock futures apparently woke up with a hangover on Monday morning after tremendous gains on Friday. Investors are waiting for factory orders, due out at 10:00 a.m., that are expected to show about 2.4 percent growth after flat lining in November.
Futures at 8:55 a.m.: DJIA: -0.49%, S&P 500: -0.46%, NASDAQ: -0.53%.
Herbalife (NYSE:HLF) dropped as much as 9 percent in pre-market trading after a report indicates that the company is under investigation by the Federal Trade Commission. The company, which sells nutritional supplements and personal care products, has had a bumpy ride since December, when hedge-fund activist Bill Ackman announced a massive short position in the company, calling it a pyramid scheme and forecasting an investigation by regulators.
Chevron (NYSE:CVX) was off over 1 percent in pre-market trading after analysts at UBS downgraded the company’s stock from “Buy” to “Neutral” with a price target of $120. The oil and gas supermajor closed Friday at $116.50 per share after releasing relatively strong earnings last week. Chevron has been in rally mode since November and analysts could think that the run is over.
Oracle (NASDAQ:ORCL) was off about 1.3 percent after announcing that it would buy Acme Packet (NASDAQ:APKT), a provider of session border control technology, for $1.7 billion, or $29.25 per share. The price represents a 22 percent premium on the stock’s Friday closing price. “The addition of Acme Packet to Oracle’s leading communications portfolio will enable service providers and enterprises to deliver innovative solutions that will change the way we interact, conduct commerce, deliver healthcare, secure our homes, and much more,” commented Mark Hurd, president at Oracle.
Morgan Stanley (NYSE:MS) was off as much as 2.5 percent in pre-market trading. The bank’s stock has climbed nearly 20 percent since the start of the year, fueled by relatively strong performance. With over 60 percent gains over the past six months, investors may feel that the rally is running out of steam.
Factory orders data for December are due out at 10:00 a.m. on Monday, and consensus is calling for a 2.4 percent month-over-month change. This would compare to effectively no change in November. Recent market highs have spurred a lot of optimism and momentum among many investors, but others are still treading cautiously. If economic indicators like the factory orders report show that activity is low, then investors could curb their interest in related equities.