On Monday, the shares of Aruba Networks (ARUN, -0.20%) declined by 1.3 percent in premarket trade. This came after the company announced a $3 billion agreement to be acquired by Hewlett-Packard (HPQ, -0.09%) which is now expected to close in the second half of H-P's fiscal 2015. This deal is expected to boost H-P’s 4.5% share in the WLAN (wireless local network) arena which has enabled employees to work remotely. Aruba currently owns 10 to 13% of the WLAN market share and according to market research firm Dell'Oro Group, the WLAN marked is estimated to grow to about $14 billion in 2019, up 40%. Based on the agreement, Hewlett-Packard will pay Aruba $24.67 in cash for each outstanding share. This is below the closing price on Friday of $24.81 a share. Last week, after the deal became public, the shares of H-P advanced 0.7% while the shares of Aruba surged by 35%. This deal will mark the biggest deal for the world’s No.2 PC maker after the company unsuccessfully acquired Britain's Autonomy Plc in 2011 and EDS in 2008. At the end of January this year, H-P's cash pile stood at $12.9 billion and the company’s shares are currently trading at $34.76 a share.
Monday saw the Nasdaq Composite Index (COMP) cross the 5,000 level. The last time the tech-heavy index traded above this level was only in 2000 while the Dow Jones also traded in record territory. These advances in the main indices came in response to disappointing economic reports out of the U.S. with investors choosing to brush off the data and to focus on the growing economy. According to data released, the consumer spending declined more than expected in January while the saving rate increased. Also, the manufacturing gauge from the Institute for Supply Management slowed in February but met expectations. Also on the downside was construction spending which declined in January. The S&P 500 index (SPX) closed higher, close to its record level with the consumer discretionary sector leading the gains. Meanwhile, the Dow Jones Industrial Average (DJIA) advanced 140 points with Visa Inc. and McDonald’s Corp as the top gainers. Also on the upside was the Nasdaq which advanced 0.7 percent to cross the 5,000 level.
Despite disappointing data out of the U.S., the U.S. dollar (USD) traded higher and extended gains. This came even after data showed that manufacturing activity in the U.S. expanded at the slowest pace in February in thirteen months while an upbeat growth report released on Friday continued to support. In their report, the Institute for Supply Management stated that their purchasing manager’s index (PMI) fell to 52.9 in February which was below expectations for a decline to 53.0. This was down from a reading of 53.5 in January. Also, in their report, the U.S. Commerce Department reported that consumer spending declined 0.2 percent in February with analysts forecasting a decline of only 0.1 percent. In Forex trading, the EUR/USD traded steady for the day at 1.1240. Against the British pound, the greenback traded higher with GBP/USD at 1.5363, down 0.49% while the Japanese yen also traded lower with USD/JPY at 120.08, up 0.42 percent. Also, the U.S. dollar index advanced to 95.43, up 0.14 percent.
On Tuesday, in Asian trading, crude oil prices advanced marginally as investors await industry data on supplies expected out of the U.S. today. The American Petroleum Institute will release its weekly estimate of crude, gasoline and distillate stockpiles while the U.S. Department of Energy will release their data on Wednesday. Crude oil for April delivery traded at $49.83 a barrel, up 0.18 percent on the NYMEX. Elsewhere, Brent oil for delivery in April delivery declined 1.81 percent, or $1.14, to trade at $61.45 a barrel on the ICE Futures Exchange in London. This decline came in response to concerns regarding supply disruptions out of Libya.