News Column

Daily Wrap: Mixing chicken and sausage

May 27, 2014

By David Nicklaus, St. Louis Post-Dispatch

May 27--TODAY'S INDEXES -- Dow industrials 16,675.50 + 69.23

S&P 500 1911.91 +11.38

Nasdaq 4237.07 + 51.26

FOOD FIGHT: Poultry producer Pilgrim's Pride wants to call off the marriage of Jimmy Dean and Mrs. Butterworth. Pilgrim's Pride, which is majority owned by Brazilian company JBS, made an unsolicited offer today for Hillshire Brands, which makes Jimmy Dean sausage and other meat products. As part of JBS' proposal, Hillshire would have to call off its plan to buy Pinnacle Foods, which makes Mrs. Butterworth's and a long list of other well-known grocery brands. Pinnacle shares fell 5.4 percent and Hillshire soared 8 percent to $45.19, which is above Pilgrim's Pride's$45-a-share offer.

ANOTHER RECORD: The S&P 500 gained 0.6 percent for its second straight record close. The broad market index is now up 3.4 percent for the year. The Dow Jones industrial average remains 40 points below the record it set two weeks ago.

DO-OVER: Bank of America shares rose 3.4 percent on news that the big bank had resubmitted its capital plan to the Federal Reserve. It had to withdraw its original plan -- which includes a request for dividends and stock buybacks -- last month after finding accounting errors.

BOEING IS BUYING: Aerospace giant Boeing acquired AerData Group, a Dutch software firm, for an undisclosed sum, gaining expertise in lease management, engine fleet planning and records management. Boeing shares rose 1.3 percent

HOT WIRES: Electric utilities FirstEnergy and Exelon were among the market's biggest gainers after a late Friday report from PJM Interconnection, a regional power grid operator, said utilities are about to get higher payments for their generating capacity. FirstEnergy jumped 5.6 percent and Exelon rose 3.6 percent.

LOCAL INDEX: The Bloomberg St. Louis Index gained 0.7 percent, about the same as the broader market.


Allied Healthcare 12.0% Mallinckrodt -1.5%

Centene 4.3% First Clover Leaf -1.3%

FutureFuel 3.7% Reliv International -1.2%

LOCAL GAINER: Centene shares climbed on a bit of takeover speculation that has two strong St. Louis angles. Modern Healthcare reported that Ascension Health, the hospital system headquartered in the St. Louis area, is looking to buy a health insurer, and that the two leading candidates are Wellcare Health Plans and Centene. Wellcare, based in Tampa, rose 2.9 percent.

ANALYST'S INSIGHTS: Lisa Gill of JPMorgan issued a series of reports on Express Scripts last week, and in one of them she reports on a proprietary survey of 50 large employers. Express Scripts got high marks for customer service, she writes: "Express saw the highest overall satisfaction level of respondents in the past four years. 44 percent of the ESRX customers in our survey were very satisfied and none were unsatisfied. We believe this is reassuring given recent concerns in the marketplace around service."

THE DAY AHEAD: Brown Shoe reports first-quarter earnings before the market opens. Analysts are expecting a profit of 30.5 cents a share, which would be a 4.7 percent decline from a year ago, but Bloomberg notes that Brown has surpassed expectations for eight quarters in a row.

David Nicklaus is business columnist at the St. Louis Post-Dispatch. Subscribe to his Facebook page or follow him on Twitter @dnickbiz.


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Source: St. Louis Post-Dispatch (MO)

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