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The top stocks to watch today (Tuesday) include investment bank Morgan Stanley (NYSE: MS), tobacco company Reynolds American Inc. (NYSE: RAI), and oil firm Clayton Williams Energy Inc. (NYSE: CWEI).
U.S. markets opened modestly lower after a holiday weekend, following overnight weakness in Japan and Europe.
Global equities trimmed losses after UK Prime Minister Theresa May's speech that Britain may still plan for a soft Brexit transition. Yet investors remain on edge with the European Central Bank meeting on Thursday, Fed Chair Janet Yellen speaking at several events later this week, and Donald Trump's inauguration on Friday.
Urgent: These Are the Best Stocks to Buy for January 2017
But today's top stocks to watch are moving on earnings and M&A activity...
Stocks to Watch Today: Morgan Stanley (NYSE: MS)
Morgan Stanley stock slipped 1.3% to $43.46 in early trading despite posting its best fourth quarter since the financial crisis.
Before the open, Morgan Stanley reported that profit jumped to $1.67 billion, or $0.81 a share, in Q4 2016. That compares with $908 million, or $0.39 a share in the same quarter a year ago. Revenue climbed 17% to $9.02 billion from $7.74 billion a year earlier. Analysts were looking for earnings per share (EPS) of $0.65 on $8.47 billion in revenue.
The firm's return on equity, a closely watched measure of profitability, came in at 8% for the year. That was up from 7.8% in 2015. However, it was shy of the 10% target laid out by CEO James Gorman.
Revenue in the firm's trading division, which trades stocks and stock-linked instruments, rose 7.4% to $1.95 billion from $1.82 billion a year ago. Meanwhile, debt-trading revenue, which has been a weak spot for Morgan Stanley, nearly tripled to $1.47 billion from $550 million a year earlier.
Morgan Stanley shares are up 3.03% year to date and 68.35% over the last year.
Stocks to Watch Today: Reynolds American Inc. (NYSE: RAI)
Reynolds American stock rose 3.68% to $58.08 in morning trading after reaching a $49 billion deal that allows British American Tobacco Plc. (NYSEMKT ADR: BTI) to acquire the 57.8% of RAI stock it does not currently own. The deal is for $59.64 per share in cash and stock.
RAI shareholders will receive $29.44 per share in cash and 0.5260 of BAT ordinary shares, which are currently worth $30.20.
BAT did not say how Reynolds would function under BAT ownership, but it is likely to be an American subsidiary based in Winston-Salem.
The transaction is subject to shareholder approval from both Reynolds American and BAT shareholders, as well as regulatory approvals. The transaction is expected to close in the third quarter of 2017 and includes a $1 billion breakup fee for both companies.
Stocks to Watch: Clayton Williams Energy Inc. (NYSE: CWEI)
Clayton Williams Energy stock jumped 36.51% to $141.82 in morning trading after agreeing to be bought by Noble Energy Inc. (NYSE: NBL) in a $2.7 billion cash and stock deal.
Under the deal's terms, Clayton Williams shareholders will receive 2.7874 shares of Noble Energy common stock and $34.75 in cash for each share of common stock held.
The move is aimed at enhancing Noble's presence in the lucrative Permian Basin oil field. The deal includes 71,000 net acres in the heart of the Southern Delaware Basin in Reeves and Ward counties in Texas, which are a part of the larger Permian Basin.
Noble Energy said the number of rigs on the new acreage is planned to increase from one to three by the end of this year.
Oil prices were up 1.66% at $53.27 in today's morning session.
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Related Articles:
- CNBC: Noble Energy to Buy Clayton Williams Energy for $2.7 Billion
- FOX Business: BAT Agrees to Pay $49 Billion to Take Control of Reynolds
- Business Insider: Morgan Stanley Beats!
