Futures Rise As Microsoft Corporation (MSFT) Buys 1/2 of Nokia Corporation (ADR) (NOK)

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

Labor Day weekend is a popular shopping holiday, and this year businesses splurged as well. Two corporate deals were announced over the weekend totaling more than $137 billion. The deal-making is pushing the Dow Jones Industrial Average solidly higher this morning: Stock index futures as of 7:20 a.m. EDT pointed to an 85-point bounce at the opening bell.

Microsoft Corporation (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFTannounced today that it is buying its way into the handset market. The company reached an agreement to purchase Nokia Corporation (ADR) (NYSE:NOK)‘s devices and services business. It plans to scoop up that division, along with licenses to Nokia’s patents and mapping services, for about $7.2 billion in cash. Close to 32,000 Nokia Corporation (ADR) (NYSE:NOK) employees will transfer to Microsoft Corporation (NASDAQ:MSFT), including current leader Stephen Elop, who was previously a Microsoft Corporation (NASDAQ:MSFT) executive in charge of the business division. Elop’s name has been suggested as a potential replacement for CEO Steve Ballmer, and this deal makes that even more likely. Altogether, Microsoft Corporation (NASDAQ:MSFT) is acquiring businesses that generated 50% of Nokia Corporation (ADR) (NYSE:NOK)’s sales last year. In premarket trading, Microsoft Corporation (NASDAQ:MSFT)’s stock is down by about 5%, while Nokia Corporation (ADR) (NYSE:NOK)’s shares have surged about 46%.

Not to be outdone, fellow Dow component Verizon Communications Inc. (NYSE:VZ) finalized a deal with Vodafone Group Plc (ADR) (NASDAQ:VOD) that, at $130 billion, is the second-largest purchase ever. Verizon Communications Inc. (NYSE:VZ) will get full ownership of its wireless business, which logged $76 billion in revenue last year and boasts 100 million customers. But it had to pay up for that prize. Verizon had reportedly wanted to spend closer to $100 billion, but it relented as spiking interest rates threatened to raise borrowing costs too high to finance the deal. For its part, Vodafone Group Plc (ADR) (NASDAQ:VOD) plans to distribute much of the windfall to shareholders, rather than its own splashy acquisitions. Verizon and Vodafone are down by 4.5% and 1.5%, respectively, in premarket trading.

Economic data released over the weekend continued to point to a steady global recovery, as economies in Europe and Asia are showing evidence of stronger growth ahead. The United Kingdom’s purchasing manufacturers’ index surged to 57.2, the highest level since early 2011, while China’s PMI hit a 16-month high.

Closer to home, investors will get a key reading on the U.S economy today. The ISM factory index, due for release at 10 a.m. EDT, is expected to read 54, indicating continued expansion in the manufacturing sector.

The article Dow Futures Surge After Microsoft Buys Half of Nokia originally appeared on Fool.com and is written by Demitrios Kalogeropoulos.

Fool contributor Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Vodafone. The Motley Fool owns shares of Microsoft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!