Big on today's Buffalo News Business Today cover -- and on the Front Page of The New York Times -- are stories about how a spate of big-time corporate deals may be a signal that the economy is perking up. [The Washington Post is on the story, too.]
- Stocks rise on deals by Abbott and Xerox - The Associated Press/The Buffalo News
Large acquisitions by Abbott Laboratories and Xerox Corp. vaulted shares of drugmakers and technology companies higher, and the buying spread to other parts of the market as investors hoped that the $6 billion-plus deals could be a sign that deal activity is finally picking up a year after the financial system nearly froze.
- Big Merger Deals Signal Restored Confidence - Andrew Ross Sorkin/The New York Times
What Wall Street hasn’t seen, of course, is the return of the biggest buyers in recent years — the private equity firms that propelled much of the merger mania during the debt-fueled bubble.
And that may be good news. The big deals announced recently are strategic deals, in which one company buys another to make it an integral part of its business, and they do not require the buyer to take on mounds of new borrowing to pay for the acquisition.
Here's a point that I found very interesting, from another New York Times story about the Xerox deal:
But the game is indeed changing for big technology suppliers catering to corporate customers as they shift to depend less on products and more on services. And technology companies, like Xerox, are often buying services companies to accelerate the transition.
That is, some smart people now think the way to succeed in business is by really trying to do things, not make things.
Sort of like what journalism has always been, and needs to be more of in order to survive -- a service, not a commodity.
Meanwhile, leave it to NYT sobersides David Brooks to point out that our economy needs a major, moral retooling, quoting John Adams: “Human nature, in no form of it, could ever bear prosperity."
-- George Pyle/The Buffalo News