Market News: ArthroCare, AT&T, Jos. A. Bank

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The stock markets in the United States suffered the highest declines since June today after data on manufacturing in the country dropped more than expected.

According to Bloomberg, the benchmark measure of equities in the United States fell 3.6% last month, the worst opening month since 2010. The gauge declined during the final three weeks of January, which was the longest losing trend since 2012.

The Institute for Supply Management reported that the manufacturing index for the month of January declined to 51.3% from the seasonally adjusted reading of 56.5% in December. The ISM also reported new order dropped from 64.4% to 51.2%.  The figures show that the manufacturing industry is growing at a slower rate. Economists surveyed by Bloomberg estimated that the manufacturing index will decrease to 56%.

Bill Schultz, chief investment officer at McQueen Ball & Associates commented, “Everyone walked in this year expecting a continuation of a least growing economic activity, and the latest data we’ve been seeing throw a bit of cold water on that theory.” He added, “Economic activity was not as strong as people expected. People are taking a pause, reassessing where they stand.”

On the other hand, Douglas Cote, chief market strategist at ING U.S. Investment Management said the market is reacting to the tapering of the Federal Reserve’s monthly bond-buying program. He said, “The market is adjusting to the Fed taking the punch bowl away.” However, he believes that fundamentals are still solid. According to him, “Even though we’re in the correction phase, ultimately the path for the market is up.”

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 15,376.07 (-2.06%)
  • S&P 500- 1,742.17 (-2.27%)
  • NASDAQ- 3,997.03 (-2.60%)
  • Russell 2000- 1,094.58 (-3.21%)

European Markets

  • EURO STOXX 50 Price EUR- 2,963.96 (-1.66%)
  • FTSE 100 Index- 6,465.66 (-0.69%)
  • Deutsche Borse AG German Stock Index DAX- 9,186.82 (-1.29%)

Asia Pacific Markets

  • Nikkei 225- 14,619.13 (-1.98%)
  • Hong Kong Hang Seng Index- 22,035.42 (-0.48%)
  • Shanghai Shenzhen CSI 300 Index- 2,202.45 (-1.14%)

Stocks in Focus

The stock price of ArtroCare Corporation (NASDAQ:ARTC) surged more than 8% to $49.04 per share after the company agreed to sell itself to Smith & Nephew (NYSE:SNN) Plc for $48.25 per share or $1.7 billion in cash. The proposed acquisition price is 20% premium in the average price of the stock over the past 90 days.  Smith & Nephew CEO, Olivier Bohuon said, “We wanted to acquire in high-growth businesses and sports medicine is definitely one of them.” He added that the expertise of ArthroCare in treating shoulder joints will complement his company’s strength in knee surgery.

AT&T, Inc (NYSE:T) declined more than 4% to $31.90 per share after the company announced a cut in its family plan pricing amid strong competition .The telecommunications company is now offering $160 for a family with four smartphones with unlimited talk, text, and a shared 10GB data if they will switch their service. According to the AT&T, a family paying $260 for a similar plan on Verizon Communications Inc (NYSE:VZ) will be able to save $100 a month if they switch to its new offer. Verizon also declined more than 3% to $46.41 a share.

The shares of Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) plunged nearly 5% to $53.49 per share on reports it will not enter any buyout negotiations with its rival The Men’s Wearhouse, Inc (NYSE:MW) as it is looking for other companies to acquire including Eddie Bauer.  The stock price of Men’s Wearhouse also dropped more than 7% to $44.31 per share today.

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