Overnight Market Watch

Wall Street stocks struggled throughout most of Tuesday’s session on mixed economic data that showed strength in manufacturing but a sagging housing market and weak car sales. However, the tone turned more upbeat near the close after Wall Street Journal publisher Dow Jones confirmed that it received an unsolicited bid from Rupert Murdoch's News Corp. to buy the company for US$5 billion.

The Dow closed up 73.23 or 0.56% at 13,136.14, while the S&P 500 added 3.93 or 0.27% to 1,486.30. The Nasdaq ended up 6.44 or 0.26% at 2,531.53.

After investors heard that Dow Jones was a takeover target, the company's stock surged 58%. News Corp., which owns the Fox broadcast network among many other media outlets, fell 4.2%.

Other media stocks rose on the news, with the New York Times up 5% and Journal Register up 7%.

Microsoft rose 1.5% after the software giant said it may offer somewhere "in the US$1 billion range" for internet advertising firm 24/7 Real Media, according to the newspaper. 24/7 Real Media shares surged 20.3%.

Elsewhere, Avon Products nearly tripled its fiscal third quarter earnings from the same period last year. Its shares rose 2.8%.

Another company reporting a near-threefold rise in first quarter profit was Qwest Communications, whose shares rose by 2.6%.

Procter & Gamble, one of the 30 components of the Dow industrials, reported a 14% rise in its fiscal third quarter profit, but the profit failed to top expectations. Procter & Gamble shares fell 2.2%.

Archer Daniels Midland's fiscal third quarter earnings fell short of analyst forecasts, with the country's largest ethanol producer citing higher corn costs. ADM stock fell 5.4%.

Circuit City Stores slipped 6% in active New York Stock Exchange trading after saying late Monday that it expects to report a first quarter loss.

Liz Claiborne reported a 65% plunge in first quarter net profit and said that 2007 earnings would fall well below analysts’ expectations. The clothing retailer fell 17.3%.

NYMEX light crude oil for June delivery fell US$1.31 or 1.99% to settle at US$64.44 a barrel. COMEX gold for June delivery fell US$6.20 or 0.91% to US$677.30 an ounce.

In Europe, the French and German share markets were closed Tuesday for the Labour Day holiday. In London, Britain’s key share index was weighed down by weakness in the oil sector and the absence of European investors.

Among the movers, specialty drug company Shire was among the biggest fallers in a weak London market Tuesday ahead of the expected launch of a large convertible bond issue today. Shire closed 1.4% lower.

However, media stocks managed to buck Tuesday’s weak market trend on the news of the bid approach for Dow Jones by News Corp. Shares in Pearson, owner of The Financial Times, jumped 4.6%, while news and financial information group Reuters gained 3.5%.

Standard Life was in demand after a push from a major broking house. Shares in the life assurer rose 1.8% to a record closing high after the broker reiterated its “outperform” rating ahead of next Tuesday’s first quarter new business figures.

The FTSE 100 closed 29.6 or 0.5% lower at 6,419.6.

In Asia, the Hong Kong stock market was closed for the Labour Day holiday, while Japan’s Nikkei share average edged down in slow trade as investors took profits in recent gainers ahead of market holidays on Thursday and Friday.

Kansai Electric Power fell 4.5% after it posted an 8.1% drop in net profit on Friday for the year ended 31 March 2007 due partly to high fuel costs for its thermal power plants. It expects a further fall of 21% in the current year.

The Nikkei ended down 125.43 or 0.72% at 17,274.98.

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