Not Enough Spark From ‘Merger Monday’ — Monday’s IP Market Recap

by Marc Bastow | November 12, 2012 5:02 pm

[1]Good news on the homefront this week was led by the return of “Merger Monday,”[2] as the day saw a number of big deals go down.

Leucadia National (NYSE:LUK[3]) bought investment bank and brokerage firm Jefferies Group (NYSE:JEF[4]) in a deal valued at $3.7 billion. Paint titan Sherwin-Williams (NYSE:SHW[5]) announced a $2.3 billion deal to buy Comex Group, a coatings maker based in Mexico. And lastly, Precision Castparts (NYSE:PCP[6]) announced a $2.9 billion deal for Titanium Metals (NYSE:TIE[7]).

Still, despite the excitability in the M&A market, stocks otherwise maneuvered through Monday nervously, dipping back and forth in a narrow range before ending on a mixed note. The Dow Jones and Nasdaq finished down fractionally at 12,815.16 and 2,904.26, respectively, while the S&P eked out a marginal gain to close at 1,380 on the nose.

The “Fiscal Cliff” and its automatic across-the-board cuts in spending and the expiration of prior tax cuts continues to take center stage. Newly re-elected President Obama is scheduled to meet with Democratic and Republican leaders during the week, with the result of those meetings closely watched for any sign of movement toward a resolution.

European troubles continue to form a backdrop, too, with finance ministers from the 17 eurozone countries meeting in Brussels to discuss Greece’s economic reforms. Greece took a big step forward as its parliament approved a fiscal 2013 budget — a step toward unfreezing bailout funds.

Decent news in the homebuilder space didn’t help stock prices, as both DR Horton (NYSE:DHI[8]) and Beazer Homes (NYSE:BZH[9]) posted mixed results that had investors fleeing the sector. BZH was clubbed by 18% and DHI finished down nearly 7%. Heading lower with them were Hovnanian (NYSE:HOV[10], -8.1%) and KB Home (NYSE:KBH[11], -6.5%), among others.

In corporate news, shares of Gilead Sciences (NASDAQ:GILD[12]) surged almost 14% after the biotechnology giant announced some optimistic news about hepatitis C drug trials[13], while Research In Motion (NASDAQ:RIMM[14]) shares headed 3% higher after the company announced it will launch its BlackBerry 10 on Jan. 30.

On the negative side, JCPenney (NYSE:JCP[15]) shares continue to sink, down 13% and falling to a new 52-week low after the stock was downgraded by Credit Suisse (NYSE:CS[16]). The struggling retailer was the worst performer on the S&P 500 for Monday.

Three Up

• Vringo (AMEX:VRNG[17]): Up 7.7% (26 cents) to $3.66.
• Dendreon (NASDAQ:DNDN[18]): Up 6.4% (26 cents) to $4.31.
• Vivus (NASDAQ:VVUS[19]): Up 4.8% (52 cents) to $11.36.

Three Down

• James River Coal (NASDAQ:JRCC[20]): Down 11.5% (31 cents) to $2.39.
• NuStar (NYSE:NS[21]): Down 7.1% ($3.01) to $39.13.
• Molycorp (NYSE:MCP[22]): Down 4.4% (33 cents) to $7.17.

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities.

Source URL: https://investorplace.com/2012/11/not-enough-spark-from-merger-monday-mondays-ip-market-recap/

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