AIG Adds to 2010 M&A Spike

M&A activity continues to perk up in 2010, and stocks responded positively to several announced deals this morning. Earnings continue to be solid as the season winds to a close. Economic data, especially jobs, will remain in focus as winter starts to fade into spring. We continue to like the market for the long term, but a lot of uncertainty remains in the short to medium term.

The Chinese IT Stocks Index was the top performing tickerspy Index on the day, led by AsiaInfo Holdings (ASIA) with a 12% gain.

Stocks rose on the day, with the Dow up 79 points to 10,404. The S&P climbed 11 points to 1,116, while the Nasdaq rose 35 points to 2,274. Oil slipped -92 cents to $78.74 a barrel, while gold dipped -60 cents to $1,118.30 an ounce.

On the economic front, the Commerce Department reported that personal spending rose by 0.5% in January, slightly better than the 0.4% increase expected. Personal incomes, meanwhile, inched up 0.1%, well below the 0.4% rise that economists had anticipated.

In earnings news, Sotheby’s (BID) rose 9.1% after the auction house easily topped analyst estimates. For Q4, the company recorded a profit of $73.6 million, or $1.09 a share, compared with a net loss of -$9.3 million, or -14 cents a share, a year ago. Revenue climbed 31% to $218.3 million. The Wall Street consensus was for EPS of 67 cents on revenue of $210.1 million. Auction commission margins rose to 20.4% from 16.0%, while the company cut expenses by -28%. Five Pro investors counted the stock among their top-15 holdings at the start of Q1, while 60 tickerspy members included the stock in their portfolios.

Satellite TV operator Dish Network (DISH) saw its Q4 net income fall -18% to $179 million, or 40 cents per share, from $217 million, or 48 cents per share, a year earlier. That topped the consensus by 8 cents. Revenue edged up 1% to $2.96 billion, coming in just ahead of estimates. The company added 249,000 net subscribers in the quarter. The stock rose 7.7%. Fourteen Pro investors counted the stock among their top-15 holdings at the start of Q1, while 84 tickerspy members included the stock in their portfolios.

Intrepid Potash (IPI) shares rose 3.6% despite the fertilizer producer missing Q4 analyst earnings EPS expectations. For the quarter, the company earned $6.7 million, or 9 cents a share, down -70% from $22.7 million, or 30 cents a share, a year ago. Revenue fell -8% to $73.1 million, as Intrepid’s potash prices fell to $408 per short ton from $762 per short ton in the year-ago period. Analysts were looking for EPS of 11 cents on sales of $64.3 million.

In M&A news, American International Group (AIG) has agreed to sell its Asian unit, AIA Group, to British insurer Prudential PLC (PRU) in a deal valued at $35.5 billion. Prudential will pay $25 billion in cash, plus $10.5 billion in equity for the unit. AIG plans to use $16 billion of the cash proceeds to redeem $16 billion worth of preferred interests held by the Federal Reserve Bank of New York and to repay about $9 billion to a Fed credit facility. AIG shares rose 4.1%.

Tags: AIG, ASIA, BID, DISH, IPI, PRU