Russell 2000 rises on Yahoo! bid
The Russell 2000 (NYSE: IWM) is the strongest gainer following news that Microsoft has made a $44 billion bid for Yahoo!.
At 10:07 a.m. ET, the small-cap index had climbed 14.38 points, or 2.02%, to 727.68. The Dow Jones Industrial Average (INDU) had advanced 111.12 points, or 0.88%, to 12,761.48.
Futures were pointing up and trading began on a bullish note following news that software giant Microsoft Corp. (Nasdaq: MSFT) made an unsolicited $44.6 billion bid for troubled search engine Yahoo! Inc. (Nasdaq: YHOO), according to the two companies this morning.
“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 before the opening.
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 advertising business and challenge the dominance of Google Inc. (Nasdaq: GOOG).
Sunnyvale, Calif.-based Yahoo!, which has been losing the online search battle with rival Google and recently had to cut jobs, said in a statement that it is evaluating the proposal.
The two companies have flirted in the past, but collaboration talks in 2006 and 2007 went nowhere.
With news of the potential buyout grabbing the headlines, investors appear to be disregarding a disappointing jobs report.
The U.S. Labor Department announced before the start of trading that payrolls unexpectedly fell 17,000 in January, while the figure for December was revised up sharply. The overall unemployment rate slipped to 4.9% from 5%.
The January decline is the first since August 2003 and a definite sign of a slowdown in economic growth. The drop reflects declines in construction and manufacturing, which were not offset by job growth in the health-care sector.
