Investors guess Fed’s actions, push stocks up
NEW YORK — Investors on Wall Street are playing a guessing game with the Federal Reserve.
On Monday, they guessed that the central bank will continue trying to prop up the economy and sent stocks higher.
The major stock indexes all rose about 1 percent in early trading and stayed there for most of the day, before dipping slightly in the afternoon. The Dow Jones industrial average ended the day up 109 points, or 0.7 percent, at 15,179. The Standard & Poor’s 500 index rose 12 points, or 0.8 percent, to 1,639 and the Nasdaq composite rose 28 points, or 0.8 percent, to 3,452.
Lowe’s seeks to buy Orchard Supply for $205 million
MOORESVILLE, N.C. — Lowe’s plans to expand its California presence with an acquisition of Sears spinoff Orchard Supply Hardware Stores for about $205 million in cash.
Orchard Supply filed a voluntary Chapter 11 bankruptcy petition on Monday, so the offer from Lowe’s will become the “stalking horse” bid for an auction of Orchard’s assets. Such a bid sets the floor for an auction process that lets competitors make better offers.
The California market is key since it has been a strong market for home improvement retailers recently. In its most recent earnings report Lowe’s reported net income that rose 3 percent but missed expectations, hurt by a rainy and cool spring. However its larger rival Home Depot Inc., with a bigger presence in California, reported better-than-expected results.
Mooresville, N.C.-based Lowe’s Cos. Inc. said Monday it will acquire at least 60 of Orchard’s 91 stores, and alternative bids must top Lowe’s offer by at least $12 million. Lowe’s also will assume responsibility for money owed to nearly all of Orchard’s suppliers.
Google settles suit, clears way for stock split
SAN FRANCISCO — Google has resolved a shareholder lawsuit blocking a long-delayed stock split, clearing the way for the Internet search leader to issue a new class of non-voting shares later this year.
The settlement announced Monday came on the eve of a scheduled Delaware chancery court trial that threatened to cast an unflattering light on Google co-founders Larry Page and Sergey Brin.
The class-action by the Brockton Retirement Board in Massachusetts and another Google shareholder, Philip Skidmore, alleged that Page and Brin engineered the stock split in a way that unfairly benefits them while shortchanging the rest of the company’s shareholders.
Starboard says Smithfield sale undervalues company
RICHMOND, Va. — One of Smithfield Foods Inc.’s largest shareholders says a $4.72 billion takeover bid from China’s largest meat producer falls short of what the company would be worth if sold off piece by piece.
In a letter to the Smithfield, Va.-based pork producer’s board of directors on Monday, the New York-based investment firm Starboard Value LP estimated the company’s value at $9 billion to $10.8 billion, or about $44 to $55 per share. Starboard owns about 5.7 percent of Smithfield’s common stock.
Under the deal struck last month with Shuanghui International Holdings Ltd., Smithfield will sell itself for $34 per share. The deal, which remains subject to regulatory and shareholder approvals, would be the largest takeover of a U.S. company by a Chinese firm, valued at about $7.1 billion, including debt. Smithfield’s stock will no longer be publicly traded once the deal closes, which is expected in the second half of the year.