Russell 2000 futures gaining
The Russell 2000 (NYSE: IWM) futures are higher and the small-cap index will open higher on news of a major tech deal.
Software giant Microsoft Corp. (Nasdaq: MSFT) has made an unsolicited $44.6 billion bid for troubled search engine Yahoo! Inc. (Nasdaq: YHOO), according to the two companies this morning.
Sunnyvale, Calif.-based Yahoo!, which recently cut jobs and saw its chairman step down, said in a statement that it is evaluating the proposal.
“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Microsoft CEO Steve Ballmer in a statement.
The bid comes to $31 per share, a 62% premium over Yahoo!’s closing price on Jan. 31 and is an attempt by Microsoft to expand its online business and challenge the dominance of Google Inc. (Nasdaq: GOOG).
News of the potential buyout energized the bulls and lifted futures as investors appear to be disregarding disappointing economic news.
The U.S. Labor Department reported this morning that payrolls unexpectedly fell in January. The figure for December was revised up.
Nonfarm payrolls fell 17,000 in January, defying economists’ projections of an increase. That’s the first drop in more than four years and the latest sign that the U.S. economy is experiencing a slowdown in growth.
Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:
• Silicon Motion Technology Corp. (SIMO), up 15% on news of a rise in fourth-quarter revenues.
• Sierra Wireless, Inc. (SWIR), up 11% on news of a rise in fourth-quarter revenues.
• Coldwater Creek Inc. (CWTR), up 9% on news the chairman has purchased 924,099 shares of common stock.
• Franklin Bank Corp. (FBTX), down 15% on news of a wider fourth-quarter net loss.
• Trident Microsystems, Inc. (TRID), down 5% on news of a decline in fiscal second-quarter profit.
• Abaxis, Inc. (ABAX), down 5% on news of third-quarter earnings that missed Wall Street’s forecast.
