Private sector hires 294,000 Saudis during last 9 months    Saleh Al Shehri strike seals Al Ittihad's Sea Derby win over Al Ahli    HONOR unveils pre-order of the stunning HONOR MagicBook Art 14 Featuring an ultra-slim design, HONOR Eye Comfort Display and AI Cross-OS WorkStation    Economy minister emphasizes global partnerships to address pressing challenges Private investments in non-oil sector soar 70%    Saudi Arabia's GDP grows 2.8% in Q3, driven by non-oil sectors    PIF, HKMA sign MoU to establish $1 billion investment fund    Israeli soldiers forced Palestinian men to take off clothes as they evacuated war-torn Jabalya    North Korea fires suspected intercontinental missile    India celebrates Diwali, the festival of lights    Saudi Arabia and India agree to study feasibility of establishing power grid    Saudi Awwal Bank records SR5.9 billion net profit after Zakat and Income Tax for YTD Q3    'It was like a tsunami': Spaniards recount horror of deadly floods    Bahrain Crown Prince receives Saudi Interior Minister    Derby Week makes its debut in the Roshn Saudi League    HR Ministry takes penal action against 568 violators of Domestic Workers' Regulation    Al Nassr eliminated from King's Cup after a defeat to Al Taawoun    Teri Garr, Young Frankenstein and Tootsie star, dies at 79    Othman Al Omeir receives Legacy of Change Medal at the UK Parliament for advocacy in media    Neymar joins Saudi fashion trend, donning traditional attire at Al Hilal match    Indonesia Days event celebrates cultural diversity at Al Suwaidi Park    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







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Microsoft's $8.5 billion Skype deal lifts stocks
Published in The Saudi Gazette on 11 - 05 - 2011

NEW YORK: Corporate deals and strong earnings have been credited with driving stocks higher this year — and Tuesday saw a bit of each.
The biggest news, that Microsoft Inc. said it would buy Internet telephone service Skype for $8.5 billion in cash, is another sign that cash-rich companies are starting to spend. Corporations built up a record amount of cash over the last several years, and they have started using it to purchase rivals, pay dividends and also expand their businesses. That, in turn, has led to increased confidence among money managers and other investors that stocks are going to continue to rise.
Large companies also want to put their cash stockpiles to work because they're getting minimal returns on them, said Oliver Pursche, president of Gary Goldberg Financial Services. Interest rates for short-term savings pay less than 1 percent. “The crisis is behind us,” he said.
Companies “don't need this much cash anymore.” Microsoft had $50.15 billion in cash and short-term investments at the end of March.
The Skype purchase would be Microsoft's largest in its 36-year history. It follows AT and T Inc.'s announcement in March that it would buy T-Mobile USA for $39 billion and Johnson and Johnson's $21.3 billion deal announced last month to acquire Synthes, a maker of medical instruments and implants.
CKx Inc., which owns the rights to the names and images of Muhammad Ali and Elvis Presley, jumped 22 percent after it agreed to be bought by private equity investors. The buyout group will pay about $511 million for the company, which also owns the “American Idol” television show.
Also Tuesday, dairy producer Dean Foods Co. and Medifast Inc. reported earnings that beat analysts' expectations. Dean had a stronger start to the year than it expected and raised its forecast for full-year earnings.
The company also said it would raise prices to help combat falling milk sales. Dean jumped 11 percent.
Medifast, which operates a weight-loss program, rose 17 percent.
Boston Scientific Corp. sank 9 percent after the medical device company said its president and CEO, Ray Elliott, will retire at the end of the year. The company is looking for his replacement.
The Dow Jones industrial average rose 75.68 points, or 0.6 percent, to close at 12,760.36. The Standard and Poor's 500 index rose 10.87 points, or 0.8 percent, to 1,357.16. The Nasdaq composite index gained 28.64 points, or 1 percent, to 2,871.89.
Stocks have risen sharply in 2011, driven by strong earnings reports from major US companies such as heavy equipment maker Caterpillar Inc. and Apple Inc. The S and P 500 is up 8 percent, more than it gained in five of the last 10 full calendar years.
Companies in the S and P 500 are on track to report first-quarter earnings growth of 19 percent, according to FactSet. That's far ahead of the 11 percent that analysts were forecasting at the end of 2010. Nearly nine out of ten companies in the index have reported results already. Crude oil wavered but gained $1.33 to settle at $103.88 per barrel. The Bureau of Labor Statistics said Tuesday that higher fuel costs drove prices for imports into the United States up 2.2 percent last month. It's the first time import prices have topped 2 percent in consecutive months since June 2008.


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