Despite over 3 hours of trading suspension on the New York Stock Exchange (NYSE) due to a software bug today, markets proved to be resilient and was not significantly impacted. For example, investors were still able to trade I.B.M. or Target shares, which are listed on the NYSE. The lack of impact shows the growing complexity of the U.S. stock market and thus its ability to become robust. Part of this is attributed to the increasing number of private stock trading platforms - dark pools - which allow investors to trade without affecting the broader markets. Dark pools now make up 40% of all stock trading volume. The fragmentation of markets is also a factor; today, NYSE and Nasdaq account for 24% and 19% of the volume, respectively. In contrast, the 2 exchanges handled 80% in 1997.
Private Equity Firm K.K.R. Raises $3.1 Billion for Infrastructure Investments
Kohlberg Kravis Roberts stated that it has raised $3.1 billion for a new fund to invest in infrastructure projects, such as roads, water systems and energy pipelines. The announcement reflects growing interest of private equity firms toward infrastructure improvement, as it can offer steady cashflows for multiple years. Despite political opposition and lack of funds by local governments for such projects, the investment companies have taken part on less visible projects such as renewable energy plants. This new fund is the second to K.K.R. to be focused on infrastructure; the firm raised $1 billion in 2012.
Oil Futures Decline By Over 1%
Crude futures in the U.S. fell over 1% on Wednesday as the U.S. Energy Information Administration announced that stockpiles had increased for crude, gasoline and distillates. The statement surprised investors, who were expecting oil inventories to decrease. The news adds to current worries on Greek debt, possibility of Iran to re-enter the oil market, and China's equity plunge, all of which has had a negative impact on the commodity. Earlier in the week, oil prices had fallen to a 3-month low. However, as crude fell, gasoline rallied due to expectations for high fuel demand through the summer driving season.
Microsoft Writes Off Nokia a $7.6 Billion
Software giant Microsoft has decided to write off its acquisition of Nokia, a $9.5 billion deal made by the previous CEO Steve Ballmer. The agreement had included $1.5 billion of acquired cash and $2 billion to license Nokia's patents. However, Microsoft has deemed the acquirement a failure, as 7,800 personnel are being laid off along with the write-off. Microsoft's write-downs for M&A deals now total at about $14 billion over the past 3 years, including $6.3 billion for digital advertising agency aQuantive. Nevertheless, current CEO Satya Nadella has also followed Ballmer's footsteps to acquire external growth, as he spent over $2 billion on Minecraft maker Mojang last year.
Sources:
http://blogs.reuters.com/breakingviews/2015/07/08/microsoft-gets-7-6-bln-wakeup-call-from-nokia/
http://www.nytimes.com/2015/07/09/business/dealbook/an-offline-nyse-makes-barely-a-ripple-in-a-days-trading.html
http://www.nytimes.com/2015/07/09/business/dealbook/kkr-raises-3-1-billion-to-invest-in-road-and-other-infrastructure-projects.html
http://www.nytimes.com/2015/07/09/business/dealbook/an-offline-nyse-makes-barely-a-ripple-in-a-days-trading.html
http://www.nytimes.com/2015/07/09/business/dealbook/kkr-raises-3-1-billion-to-invest-in-road-and-other-infrastructure-projects.html
