US brokerage firm Charles Schwab acquires rival TD Ameritrade for $26-B

NEW YORK - The US brokerage firm Charles Schwab announced Monday it will acquire rival TD Ameritrade for around $26 billion.

Under the all-stock deal between these two huge discount brokerage houses, TD Ameritrade shareholders will receive 1.0837 shares of Charles Schwab for each share they own, the latter said in a statement.

The boards of both companies approved the terms of the deal unanimously. US regulators must still rule on it.

Charles Schwab said the price it is paying represents a 17 percent premium over the 30-day volume weighted average price exchange ratio as of November 20.

In the 1970s the two companies revolutionized the way small investors placed their money on Wall Street by taking on big established brokerages that set the rules for such transactions and often charged handsome fees for their services.

The deal comes amid stiff competition in the brokerage industry to lure small investors who are increasingly fond of financial products that are affordable and easy to use.

The companies could take between 18 and 36 months to merge. Once this is done the new company will have around 5 trillion dollars in client assets under its management.

source: news.abs-cbn.com

Wall Street tumbles to 2014 low as oil prices sink

Wall Street's recent selloff deepened on Wednesday, with the S&P 500 closing at its lowest in over a year as U.S. oil prices plummeted to 2003 lows.

The equities rout was widespread, hitting nine of the 10 major S&P sectors. The small-cap Russell's 2000 index .RUT fell 3.6 percent before reversing its loss late in the session.

The beaten-down S&P energy sector .SPNY fell 2.93 percent, leading the losers. Exxon (XOM.N) dropped 4.21 percent and Chevron (CVX.N) slumped 3.10 percent.

Collapsing oil prices and fears of a slowdown in China, the world's second largest economy and a key market for U.S. companies, have led the S&P 500 to drop 9 percent this year. In the past six months, the energy sector has fallen 26 percent.

"The fear is, 'Is tomorrow going to bring more selling?' People are not even thinking about today, they're thinking about tomorrow," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

U.S. crude sank 6.6 percent on Wednesday as a supply glut bumped up against bearish financial reports that deepened worries over demand.

But a late-day bounce in U.S. oil prices helped reduce losses in stocks.

"If you look at crude prices, they are shooting right back up," Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, said ahead of the close.

The S&P 500 .SPX ended down 1.17 percent at 1,859.33, its lowest close since October 2014. It had fallen as low as 1,812.29.

The Dow Jones industrial average .DJI ended 1.56 percent lower at 15,766.74 points.

After a brief late-day rally into positive territory, the Nasdaq Composite .IXIC lost steam and ended down 0.12 percent at 4,471.69.

The CBOE volatility index .VIX, Wall Street's fear gauge, jumped 5.9 percent to 27.59.

Strength last year in Netflix, Facebook and a handful of other technology stocks masked troubled sentiment in other S&P 500 components, said R Squared portfolio manager Riad Younes.

“You had a crowded trade on a few names that kept the average much higher than it should be,” Younes said. “It feels like a bear market for the average stock.”

IBM (IBM.N) weighed the most on the Dow, falling 4.88 percent after disappointing earnings report.

Netflix (NFLX.O) ended down 0.14 percent despite better-than-expected growth in its subscriber base.

An unusually high 12.5 billion shares changed hands on U.S. exchanges, well above the 7.8 billion daily average for the past 20 trading days, according to Thomson Reuters data.

The New York Stock Exchange recorded 2,271 stocks advancing stocks and 883 decliners. On the Nasdaq, 1,551 issues fell and 1,331 advanced.

The S&P 500 posted no new 52-week highs and 182 new lows; the Nasdaq recorded 5 new highs and 728 new lows.

source: www.abs-cbnnews.com