Markets to drive off deals
RTGAM
Deals and talk of deals are helping power investor sentiment early Friday, along with knockout quarterly results from Research In Motion.
Merrill Lynch, still reeling from the biggest loss in its 93-year history, is in talks for a cash injection from Singapore's state investment firm, joining a list of other financial sector companies tapping international money to recover from writing down risky subprime mortgages.
RIM's results should drive the technology sector as Bear Stearns upgraded the stock to "outperform" from "peer perform," setting a price target estimate of between $150 (U.S.) and $170.
"Anxiety over economic concerns and potential slowdown in U.S. enterprise spending is overstated in view of the secular phenomenon of smart phones," the brokerage points out.
Merrill Lynch also bumped up its price estimate on RIM by 7 per cent to $150.
"Research In Motion's results show that quality companies can continue to deliver even in a toughening economic environment." Ed Wallace, who helps oversee global equities at London's Gartmore Investment Management, told Bloomberg.
And in the moribund M&A sector, Respironics won't get any sleep after Royal Philips Electronics agreed to buy the maker of medical devices to combat sleep disorders for $5.2-billion, reflecting a 24 per cent premium to Thursday's closing price.
"Companies with strong balance sheets and cash to spend are still willing to participate in mergers and acquisitions despite broader credit concerns," Mr. Wallace added.
At 7:30 a.m. EST, Dow Jones industrial futures are up 76 points, S&P 500 futures up 10 points and Nasdaq 100 futures up 17 points.
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