On Monday, U.S. stocks gained while the main indices booked gains for the second consecutive session. This increase came in response to deal announcements as well as to dovish comments from China’s central-bank chief. In deal announcements, Teva Pharmaceutical Industries Ltd. (TEVA, +0.84%) announced on Monday that they would buy Auspex Pharmaceuticals Inc. (ASPX, +41.53%). This deal has been valued $3.2 billion and the shares of Auspex rose to $100.36 after the announcement. In other deal news, the shares of Catamaran Corp. (CTRX, -0.15%) rose 24% on Monday. This came after UnitedHealth Group Inc. (UNH, -0.21%) announced that it would buy the pharmacy-benefit manager for around $12.8 billion in cash. The shares of UnitedHealth rose 3.4 percent. At the close of U.S. trading, the Dow Jones Industrial Average (DJIA) advanced 263 points, or 1.5%, to 17,947.44. Twenty nine of the blue chip index’s 30 components ended with gains. Also on the upside was the S&P 500 index (SPX) which rose 25.22 points, or 1.2%, to 2,086.24. The biggest gainer was the energy sector which rose 2.1 percent. Following the upward trend was the Nasdaq Composite index (COMP) which gained 56.22 points, or 1.2%, to 4,947.44. Meanwhile on Sunday, the governor of the PBOC said that he saw “more room” for China to ease policy if the economy stays soft and inflation continues to weaken. As a result, on Monday, Chinese stocks closed at a seven-year high.
USD Higher on Positive U.S. Data
In currency trading on Monday, the U.S. dollar (USD) traded broadly higher against most major currencies. This came after the release of positive U.S. economic reports while comments by the Janet Yellen, Chairwoman of the Federal Reserve, on Friday, continued to support. On Friday, Yellen said in a speech that a rate hike may be warranted later this year, but she also added that weakening inflation pressures could force the Fed to delay. Meanwhile, the U.S. Commerce Department said in their report that personal spending rose 0.1% in February. This was below expectations for a gain of 0.2% while personal spending dropped 0.2% in January. Their report also showed that personal income rose 0.4 percent in February. This beat analyst expectations for a 0.3% increase. Separately, the U.S. National Association of Realtors reported that pending home sales rose 3.1% in February after rising 1.2 percent in January. This beat expectations for a 0.4% gain. The EUR/USD declined 0.39% to trade at 1.0846 while GBP/USD also traded down 0.54% to 1.4812. On Monday, the Bank of England (BoE) said that total net lending to individuals increased by ₤2.5 billion in February, up from ₤2.4 billion in January. They also reported that mortgage approvals rose to a six-month high in February. Against the Japanese yen and the Swiss franc, the USD traded higher with USD/CHF up 0.23% to 0.9646 and with USD/JPY up 0.63% to 119.90. The greenback also traded higher against the currencies in Australia, New Zealand and Canada with AUD/USD down 1.27% to 0.7657, NZD/USD down 0.44% to 0.7531 and with USD/CAD up 0.47% to 1.2667. Also, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.55% to 98.16.
Gold Declines & Trades Near $1,180
On Tuesday, gold prices declined for the third consecutive session. This came as a broadly stronger U.S. dollar (USD) dampened the appeal of the precious yellow metal. On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June touched an intraday low of $1,179.30 a troy ounce. This marked the weakest level since the 20th of March. The commodity then traded at $1,180.60 during European morning hours, down $4.70, or 0.4 percent. On Monday, gold traded up $15.40, or 1.28%, to close at $1,185.30. In March, the price of the precious metal has declined almost 3 percent. This comes as the greenback strengthens amid growing expectations for higher interest rates in the U.S. later this year. Early on Tuesday, the dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.3% to 98.61. This month, the index is on track to post a gain of 3 percent. A strong U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. In other commodity trading, and elsewhere on the Comex, silver futures for May delivery dropped 18.7 cents, or 1.12%, to trade at $16.48 a troy ounce. Also on the downside was copper for May delivery which declined 2.2 cents, or 0.78%, to trade at $2.760 a pound.
In the Spotlight – What You Need to Know Before GoDaddy Goes Public
GoDaddy is heading towards an initial public offering (IPO) and it has been approved to trade on the New York Stock Exchange with the symbol GDDY. As a company that registers Internet domains, GoDaddy is expected to set pricing for its shares on Tuesday and it has stated that it expects shares to trade between $17 and $19.
In 2014, GoDaddy had 13 million customers with revenue of $1.4 billion and a net loss of $143.3 million. This was down from $199.9 million in 2013. The company makes its money through domain products, hosting and presence services and business applications.
Before GoDaddy starts to trade, here are some things you should know. The IPO proceeds will be used by GoDaddy to pay off some of its debt. In 2011, the company was bought by private-equity firms Silver Lake and KKR & Co. as well as technology Crossover Ventures. When GoDaddy goes public, the company predicts that they will make $396 million in proceeds from shares of its stock. This is based on $18 a share. After using some of the proceeds to pay off its debt, GoDaddy will also make a payment of $3 million to Bob Parsons, its founder and former CEO. The balance of the funds will be used for general corporate expenses. GoDaddy had $1.5 billion indebtedness as of the 31st of December, 2014.
It is important to note that while GoDaddy is the largest registrar of domain names, it makes sense that the company is worried about domain-hosting competitors like Edurance, Web.com and even Google, which it says recently launched a beta domains service. However, in its S-1 filing, GoDaddy also points to some non-domain competitors like eBay and Facebook, which it says can offer small businesses other ways of marketing. GoDaddy also stated that the URL itself may by losing pertinence. In the filing, GoDaddy says as people use search engines or social media to get to a site, the domain name may not matter as much in the future. So do you think now is the time to trade GoDaddy shares?