KKR, CD&R to Buy Cloudera
Topic of the day
Shares of Cloudera jumped $3.07, or 24%, to finish at $15.93. Private-equity firms KKR and Clayton Dubilier & Rice agreed to buy the software company for roughly $5.3 billion in a deal that would take Cloudera private. Founded in 2008 by a group of engineers from Alphabet Inc.'s Google, Facebook Inc., Oracle Corp. and Yahoo Inc., Cloudera was an early player in the open-source software framework Hadoop, which enables large amounts of data to be processed quickly. But it struggled to shift to the now-dominant public cloud, where it faces steep competition from much larger firms including Amazon.com Inc.'s Amazon Web Services. Cloudera's shares have had a rocky run since their public-market debut in 2017. They are trading below their initial public offering price and are down roughly 8% so far this year after closing Friday at $12.86. Still, recent results have shown improvement in the company's business. Cloudera in March reported revenue of $869 million for its fiscal year ended Jan. 31, an increase of 9%, and an operating margin of 17% compared with a negative one a year earlier. Activist investor Carl Icahn owns roughly 18% of the company and in 2019 received two board seats as part of a settlement.
After sluggish trading at the start of the week, confidence returned to the Swiss market on Tuesday. The SMI climbed to previously unseen heights. The buying mood was fueled by strong economic data from various European countries and the US. In Switzerland, the Credit Suisse Purchasing Managers' Index (PMI) for manufacturing signaled brighter sentiment in May; it rose to its highest level since it was surveyed in 1995. The SMI gained 0.6 percent to 11,435 points. Among cyclicals, ABB gained 1.2 percent and Holcim 2.7 percent. Among financial stocks, Credit Suisse gained 1.3 percent, UBS 1.4 percent. RBC had raised the price target of Richemont shares. The share gained 2.6 percent. Meanwhile, Stifel argued that competitor Swatch (+1.5%) in the luxury sector was one of the few stocks with relative revaluation potential, and here too the Chinese market played a prominent role. The leading index was slowed down by the heavyweights, which were less popular as defensive investments. Pharmaceutical stocks Novartis and Roche gained up to 0.5 percent. Nestle (+0.1%) could hardly benefit from positive statements from JP Morgan, the analysts were convinced of the growth course of the company. Outside the SMI, Logitech rose 1.6 percent after Credit Suisse raised forecasts and price target. Swiss industrial group Oerlikon acquired French coatings expert Coeurdor to expand into the growing luxury products market. The market rewarded the strategic decision, with Oerlikon rising 1.9 percent.
European stocks rose on the first day of June to new heights, with mining, oil and bank shares advancing. In late-morning trade, the Stoxx Europe 600 rose 1.1%, putting the index on track to lodge a fresh record high. The FTSE 100 added 1.2% after a three-day break. The gains came with crude-oil futures reaching the highest level in more than two years, ahead of the OPEC+ production meeting. Eurostat reported that May consumer prices rose 2% year-over-year, due to rising energy prices. The Stoxx Europe 600 rose 2% in May, its fourth consecutive monthly rise. By style, value had the best May, with the S&P Europe 350 enhanced value index rising 5%. Of stocks in the spotlight, Porsche Automobil Holding rose 4%, as speculation continued that the luxury automobile maker would be separately listed. Porsche Automobil Holdings holds 53% of Volkswagen, which controls Porsche AG, the company that makes the Porsche 911 sports car. CD Projekt shares tumbled 8%, as the Warsaw-listed videogame maker reported a worse-than-forecast 65% drop in profit, weighed down by the troubled launch of "Cyberpunk 2077," which currently is being blocked from the Sony PlayStation store due to bugs.
Major U.S. stock indexes finished Tuesday’s session roughly flat after fresh data showed that U.S. manufacturing activity, while expanding, continues to be affected by rising commodities prices, materials shortages and difficulties in the labor market. Stocks climbed after the opening bell to kick off the month of June but later pulled back and gave up their early gains. The S&P 500 ultimately lost 2.07 points, or less than 0.1% to finish at 4202.04, while the technology-focused Nasdaq Composite fell 12.26 points, or 0.1%, to 13736.48. The Dow Jones Industrial Average ticked up 45.86 points, or 0.1%, to 34575.31, its third-highest close in history. The blue-chip index pared an earlier gain of nearly 320 points. Marathon Oil rallied $1.65, or 14%, to $13.76 amid news that members of the Organization of the Petroleum Exporting Countries and their allies agreed Tuesday to pump more oil starting in July. Boeing added $7.71, or 3.1%, to $254.73, while Capital One Financial gained $5.47, or 3.4%, to $166.25. Technology stocks including Twitter pulled back, with the social media company falling 56 cents, or 1%, to $57.44. Microsoft lost $2.28, or 0.9%, to finish at $247.40. AMC Entertainment, a popular stock among individual traders, added $5.92, or 23%, to close at $32.04. The movie-theatre operator said it had sold new shares valued at $230.5 million to Mudrick Capital Management, raising cash at a premium to its closing stock price from Friday.
Midweek, the Asian stock exchanges show a mixed trend. The trading venues in Shanghai and Hong Kong recorded losses. On the other hand, the Nikkei-225 in Tokyo gained 0.5 percent to 28,944 points. The Shanghai Composite is down 0.7 percent, in Hong Kong the minus is similar, after the Hang Seng Index had recently increased three trading days in a row. Among individual stocks in Hong Kong, Alibaba is down 2.2 percent and Meituan lost 1.2 percent. The Kospi Index in Seoul closes with a plus of 0.08%.
U.S. government bonds yields rose Tuesday, pushing the 10-year benchmark bond to the highest level in almost two weeks as investors watched crude oil prices hit a two-year high and digested a report on manufacturing activity that highlighted mounting pricing pressures and supply-chain bottlenecks. The yield on the 10-year Treasury note edged up to 1.615%, from 1.584% Friday.
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