MarketWatch.com - Pre-Market Indications

Friday, December 10, 2010

Indications: U.S. stock futures edge higher; Tenet in focus

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By Simon Kennedy, MarketWatch

LONDON (MarketWatch) â€" U.S. stock futures edged higher, with Tenet Healthcare Corp. likely to be among the big movers after the company rejected a takeover bid.

S&P 500 futures /quotes/comstock/21m!f:sp\z10 (SPZ10 1,233, +4.20, +0.34%)  rose 2.9 points to 1,230.80 and Nasdaq 100 futures /quotes/comstock/21m!f:nd\z10 (NDZ10 2,200, +0.75, +0.03%)  were up 3.5 points at 2,203.25.

Asia's week ahead

The Bank of Japan's latest quarterly Tankan survey next week is likely to reveal that sentiment among large manufacturers has weakened. MarketWatch's Myra Saefong reports.

U.S. markets ended the day mostly higher on Thursday as a drop in claims for unemployment benefits helped improve sentiment.

The S&P 500 index rose 0.4%, while the Dow Jones Industrial Average was effectively flat.

Analysts at J.P. Morgan on Friday said they are expecting the S&P 500 to deliver at least a 15% rise over the course of 2011. They set a target for the index of 1,425 by the end of the coming year.

“History suggests an even stronger 20%-plus gain,” said analyst Thomas Lee in a note to clients.

He said the combination of the third year of an expansion and the third year of a presidential term has generated an average return of 20.6% in the past.

On the data front Friday, figures on the October trade balance are due at 8:30 a.m. U.S. Eastern Time, followed by a December consumer-confidence reading once markets are open.

The dollar edged lower, falling 0.3% against the yen to ¥83.566, while the euro rose 0.1% to $1.32593.

Community Health Systems Inc. /quotes/comstock/13*!cyh/quotes/nls/cyh (CYH 31.64, -0.11, -0.35%)  said Tenet Healthcare /quotes/comstock/13*!thc/quotes/nls/thc (THC 4.29, +0.03, +0.70%)  has rejected a takeover offer valued at $6 a share of cash and stock, or a roughly 40% premium to Thursday’s closing price.

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Community Health said the equity value of the offer was $3.3 billion and that the total value would be $7.3 billion including the assumption of $4 billion of debt. See full story on Community Health’s offer.

The offer appears to have become hostile very quickly, said Wells Fargo Securities analysts. They added, however, that Tenet shareholders will find it difficult to walk away from the offer and, with a bidding war unlikely, it likely will be in Tenet’s best interests to accept this offer or a slightly improved one.

Shares in Tenet jumped 47% in premarket trading to $6.30, while Community Health fell 3.6%.

In other deal news, The Wall Street Journal reported that Beckman Coulter Inc. /quotes/comstock/13*!bec/quotes/nls/bec (BEC 57.09, -0.34, -0.59%)  has put itself up for sale. The company had a market value of just under $4 billion at Thursday’s closing price and could fetch more than $5 billion in a sale, the newspaper said, citing people familiar with the matter. Shares in the company rose 16% in premarket trading.

In earnings news, National Semiconductor Corp. /quotes/comstock/13*!nsm/quotes/nls/nsm (NSM 14.97, +0.23, +1.56%)  late Thursday reported second-quarter earnings of 34 cents a share, topping the 32 cents-a-share consensus figure. The group’s revenue forecast for the current quarter, however, fell short of expectations.

Standard & Poor’s also announced changes to the composition of its indexes. F5 Networks Inc. /quotes/comstock/15*!ffiv/quotes/nls/ffiv (FFIV 138.92, +1.75, +1.28%) , Netflix Inc. /quotes/comstock/15*!nflx/quotes/nls/nflx (NFLX 191.05, +2.82, +1.50%)  and Newfield Exploration Co. /quotes/comstock/13*!nfx/quotes/nls/nfx (NFX 70.04, -0.03, -0.04%)  will all move from the S&P MidCap 400 to the S&P 500, replacing The New York Times Co. /quotes/comstock/13*!nyt/quotes/nls/nyt (NYT 9.74, +0.05, +0.52%) , Office Depot Inc. /quotes/comstock/13*!odp/quotes/nls/odp (ODP 4.95, -0.08, -1.59%)  and Eastman Kodak Co. /quotes/comstock/13*!ek/quotes/nls/ek (EK 5.31, +0.54, +11.32%) .

Cablevision Systems Corp. /quotes/comstock/13*!cvc/quotes/nls/cvc (CVC 33.36, +0.06, +0.18%)  will also join the S&P 500, replacing King Pharmaceuticals Inc. /quotes/comstock/13*!kg/quotes/nls/kg (KG 14.21, 0.00, 0.00%) /quotes/comstock/13*!kg/quotes/nls/kg (KG 14.21, 0.00, 0.00%) , which is being acquired by Pfizer Inc. /quotes/comstock/13*!pfe/quotes/nls/pfe (PFE 16.76, +0.04, +0.23%) .

In international markets, European stocks edged mostly higher, while Asian markets ended the day mostly lower. See Europe Markets.

The French CAC 40 index rose 0.1% in midday trading, while Japan’s Nikkei 225 closed down 0.7%.

Simon Kennedy is the City correspondent for MarketWatch in London.

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