The stock market moved higher on Tuesday morning, with most investors watching closely as the Federal Reserve began its two-day monetary policy meeting. As of 11:45 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up 135 points to 26,049. The S&P 500 (SNPINDEX: ^GSPC) climbed 12 points to 2,845, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 30 points to 7,745.
Big corporate moves have played a key role in the market's performance lately, and the media industry has been a popular place for consolidation. Twenty-First Century Fox (NASDAQ: FOX) (NASDAQ: FOXA) today started trading in its new form following a massive asset sale to Walt Disney (NYSE: DIS), beginning a new era for the film and television company. Meanwhile, Ford Motor (NYSE: F) made moves to bulk up its production of popular large sport utility vehicles, adding jobs and pointing to what's been an important area of strength for the automaker.
Image source: Fox.
Fox moves forward
Twenty-First Century Fox said this morning that it had completed its separation into two separate companies. Under the terms of the deal, the media giant distributed shares of a newly formed entity known as Fox Corporation to its existing shareholders. The next step will involve Disney acquiring the remaining Twenty-First Century Fox business as of Wednesday.
Disney is buying a huge chunk of what made up Fox's old business. The company's film studio and television content development business will become part of Disney, along with international networks. Fox will also give up its 30% stake in Hulu to the House of Mouse, giving Disney a majority stake in the streaming-video company.
Going forward, Fox's remaining assets will give it highly concentrated exposure to television. The Fox News, Fox Business, and national sports networks will remain with the new Fox entity, as will the primary Fox broadcast network. Many investors are excited about the potential that the new Fox has for growth, but it's clear that Fox will be a very different company than it's been historically.
Ford adds jobs
Meanwhile, Ford Motor shares rose 3% following an announcement that the automaker will make moves to bolster production of its in-demand sport utility vehicle lines. Ford's production plant in Louisville will increase its production rate by 20% in July, allowing for higher output of its popular Ford Expedition and Lincoln Navigator vehicles.
The move marks the second time that Ford has increased its production of these large SUVs. That's consistent with consumer demand, and it's also made easier by low gas prices, as well as moves from the federal government not to require higher fuel efficiency standards from U.S. automakers.
The impact on Ford from higher demand for the Expedition and Navigator models could be huge. They typically fetch anywhere from $60,000 to $80,000, which is far above the overall average among Ford vehicles of less than $40,000. Other automakers have also focused on the larger end of the vehicle market, with General Motors moving to secure its leadership position in the niche by introducing updated versions of its Suburban, Tahoe, and Yukon models in the coming year.
For investors, Ford stock has been a disappointment, but moves like this to capitalize on continued high demand could help increase profits. Eventually, if the automaker's efforts in this area are successful, shareholders hope that they'll be reflected in the stock.
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