Merger Speculation and BP Prepares for Court: Morning Buzzers
U.S. stock futures edged up on Tuesday morning, taking a cue from European markets that surged following unexpectedly positive sentiment reported by German investors.
Futures at 9:00 a.m.: DJIA: +0.14%, S&P 500: +0.20%, NASDAQ: +0.27%.
Here’s what’s buzzing on Tuesday morning:
OfficeMax (NYSE:OMX) and Office Depot (NYSE:ODP) posted tremendous pre-market gains of 20 percent and 29 percent, respectively, after news got out that the office-supply retailers were in merger talks. Speculation that the two companies would merge has been building for a while, and analysts have suggested that such a move would be necessary in order to compete with rival Staples (NASDAQ:SPLS). Staples was also up about 13 percent in the pre-market.
BP (NYSE:BP) was off about 1.2 percent in pre-market trading. BP is preparing to head to court because the oil and gas company failed to reach a settlement over allegations of negligence related to its operation of the Deepwater Horizon rig. If found guilty of gross negligence, the financial penalty that BP will face per barrel of oil spilled during the disaster will increase from $1,100 to $4,300.
Novartis (NYSE:NVS) announced on Tuesday that it will cancel the non-compete agreement and all related compensation — 72 million Swiss francs, or $78.2 million — for outgoing chairman Daniel Vasella. The decision was made largely because shareholders thought the compensation package was unreasonably large.
Wal-Mart (NYSE:WMT) will be in the spotlight this week after emails leaked on Friday revealed that February sales were off to a bad start. The expiration of the payroll tax holiday is being credited for the worst February sales start in seven years. The massive retailer is seen as a bellwether for consumer spending at large, and bad sales could foreshadow another period of slow economic growth.
Nestlé is pulling two products off its shelves in Italy and Spain because of a horse-meat scandal that is sweeping across Europe. About a dozen countries are caught up in product recalls, according to The New York Times, and major food companies are testing all of their products for horse DNA, which had been found in meat provided by a German beef supplier.
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