S&P 500: +14.26 (+1.37%)
The news of the day was that Australia became the first G20 nation to raise interest rates since the start of the financial crisis. The surprise move by the Reserve Bank of Australia signals that the global economic recovery is gaining momentum and may lead to rate hikes in other countries, particularly in the Asia-Pacific region.
U.S. dollar declined in part due to Australia’s rate hike, which sent commodity prices higher.
Emerson Electric (EMR) gained 1.40% on news that they acquired Avocent Corp for $1.2 billion in cash. Avocent designs, manufactures, licenses, and sells hardware and software provides connectivity and centralized management of IT infrastructure. Half of Avocent’s 2008 revenue, which totaled $647 million, was generated outside the U.S.
Emerson intends to apply the company’s infrastructure management to its network of power systems, energy management, and precision cooling services. In addition, Emerson can now better address energy efficiency, which they cite as their data center customers’ most pressing challenge.
St. Jude Medical (STJ) fell 12.66% as the company said it would have lower than expected third-quarter sales. CEO Dan Starks said hospitals had cut device purchases in the quarter and said St. Jude also lost revenue due to changing foreign exchange rates.
Also weighing on St. Jude, as well as other medical device companies, is the expectation that medical device companies will be forced to pay fees based on market share in any healthcare reform.
Boeing (BA) finished flat after announcing delays to its 747-8 Freighter aircraft program. The announcement comes just two montsh after the aircraft maker said it would take a $2.5 billion charge to earnings because of production delays and additional costs associated with its development of the 787 Dreamliner.
Quick Hits
Peter J. Lazaroff, Investment Analyst
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