U.S. stocks rise on takeover news
NEW YORK, July 2 (UPI) -- U.S. stock indexes closed up 1 percent Monday in the third quarter's first trading day on a flurry of takeover news.
The Dow Jones industrial average jumped 126.81 points, or 0.95 percent, to 13,535.43. The broader Standard & Poor's index added 16.08 points, or 1.07 percent, to 1,519.43. The technology-heavy Nasdaq Composite Index advanced 29.07 points, or 1.12 percent, to 2,632.30.
On the New York Stock Exchange, 2,633 stocks gained and 667 declined on volume of 2.7 billion shares traded.
Among the buyouts, the Ontario Teachers Pension Plan agreed over the weekend to buy Bell Canada parent BCE Inc. for $32.6 billion.
Carlyle Group was reported to have approached British cable operator Virgin Media with a bid worth potentially more than $20 billion.
And AT&T Inc. late Friday agreed to buy Cellular One phone operator Dobson Communications Corp. for $2.8 billion.
In London, the FTSE 100 index lost 17.30 points, or 0.26 percent, to close at 6,590.60.
Japan's Nikkei 225 index closed up 7.94 points, or 0.04 percent, to finish at 18,146.30.
The 10-year U.S. Treasury note rose 9/32, yielding 4.997 percent, while the 30-year bond was up 12/32, yielding 5.101 percent.
The U.S. dollar fell to 122.32 yen from 123.12 yen in New York late Friday. The euro, in U.S. dollars, moved to $1.3622 from $1.3535.
Schwab plans $3.5 billion restructuring
SAN FRANCISCO, July 2 (UPI) -- U.S. discount broker Charles Schwab Corp. will return $1.2 billion to stockholders through a special $1 dividend as part of a $3.5 billion restructuring.
The move Monday came a day after Schwab completed its sale of wealth management subsidiary U.S. Trust Corp. to Bank of America for about $2.7 billion after taxes.
The San Francisco financial-services company also said Monday it would buy back 84 million shares, or $2.3 billion of its equity, in a modified Dutch auction tender offer and separate stock-purchase agreement with Chairman and Chief Executive Charles Schwab, the company's largest shareholder.
Under the offer, which is to begin Tuesday, the company will pay up to $22.50 a share for its own stock -- 10 percent more than last week's closing price -- through an auction guaranteeing stockholders who sell at least $19.50 a share.
The company's shares closed at $22 Monday on the Nasdaq Stock Market, up $1.48, or 7.21 percent.
Schwab had said it would consider buying back stock and paying a special dividend to put the proceeds of the $3.3 billion U.S. Trust sale to work.
China's surplus forecast to top $100B
BEIJING, July 2 (UPI) -- China's trade surplus for the first half of the year will likely top $100 billion but then ease, the official Xinhua news agency reported Monday.
"The trade surplus reached $85.7 billion in January-May, and for the first half of the year will exceed $100 billion," the government news agency quoted National Bureau of Statistics Chief Economist Yao Jingyuan as saying.
The figure was an 84 percent jump from the same period last year.
In all of 2006, China reported a global trade surplus of $177.5 billion.
To discourage exports, Beijing ended or reduced value-added-tax rebates on nearly 40 percent of export products Sunday, Xinhua said.
Xinhua observed many exporters rushed out their shipments by Saturday before the export tax changes took effect, making the six-month surplus greater than it might normally have been.
Yao said the tax and other changes would reduce the trade imbalance but provided no targets or other details.
"A slowdown in export growth and an acceleration in imports will effectively relieve the excessive growth in the trade surplus in the second half of this year," he said.
Carlyle Group said to seek Virgin Media
LONDON, July 2 (UPI) -- The Carlyle Group is talking with Virgin Media Inc. about a bid worth potentially more than $20 billion for the British cable company, published reports said.
The talks are still early and may not lead to a bid, The New York Times reported Monday.
The offer values Virgin Media at $8 billion to $10 billion, with the offer pitched at between $30 and $35 a share, The Wall Street Journal reported. Virgin Media also has around $12 billion of debt, the Journal said.
In response to Carlyle's approach, Virgin Media has asked adviser Goldman Sachs Inc. to run an auction to gauge interest from other potential bidders, the Journal said.
Virgin Media, Carlyle and Goldman representatives declined to comment.
Virgin Media, whose largest investor is Richard Branson, lost customers this year after it stopped showing channels of rival British Sky Broadcasting Group PLC that carried programs like "Lost" and "Battlestar Galactica," the Times said.
The channels were dropped as the result of a battle over fees with satellite broadcaster BSkyB, controlled by Rupert Murdoch.
In May, the company reported its seventh consecutive quarterly loss -- $242.6 million, compared with $241.8 million a year earlier -- after subscribers defected to BSkyB.
