Wednesday, 25 March 2015 20:47
NEW YORK: Blue chips and tech stocks sagged after solid opening gains on Wall Street Wednesday, but shares in Kraft Foods soared 32 percent on the announcement of its merger with Heinz.
About 50 minutes into trade, the Dow Jones Industrial Average was down 28.22 points (0.16 percent) at 17,982.92
The broad-based S&P 500 was barely up by 0.49 point (0.02 percent) at 2,091.99, while the tech-rich Nasdaq Composite Index fell 21.73 (0.44 percent) to 4,973.00.
Kraft surged 32.5 percent to $ 81.26 as HJ Heinz’s owners 3G Capital and Berkshire Hathaway agreed to pay about $ 10 billion in a special dividend of $ 16.50 per share to Kraft shareholders in the merger deal, representing a 27 percent premium to Kraft’s closing price on Tuesday.
The deal will create North America’s third-largest food and beverage conglomerate.
Berkshire head Warren Buffett said the deal is good for Kraft investors.
“When we made the deal, we felt that the Kraft shareholders would come out very well. I think, so far, the market feels the same way,” he told CNBC television.
Berkshire’s B shares were up 0.1 percent at $ 144.42.
Shares in Tesla fell 3.3 percent after CLSA downgraded the stock, citing higher costs expected for the luxury electric carmaker.
Among other more heavily traded listings, Schlumberger gained 1.5 percent and Merck 0.9 percent while Microsoft fell 1.4 percent and IBM lost 1.3 percent.
Bond prices were slightly lower. The yield on the 10-year US Treasury rose to 1.88 percent from 1.87 percent late Tuesday, while the 30-year edged up to 2.47 percent from 2.46 percent. Bond prices and yields move inversely.
Copyright AFP (Agence France-Presse), 2015
