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

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

IPMarketRecap Not Enough Spark From 'Merger Monday'    Monday's IP Market Recap[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

Three Down

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.

Endnotes:
  1. [Image]: http://www.investorplace.com/hot-topics/investorplace-market-recap/
  2. “Merger Monday,”: http://investorplace.com/2012/11/merger-monday-is-making-a-slow-comeback/
  3. LUK: http://studio-5.financialcontent.com/investplace/quote?Symbol=LUK
  4. JEF: http://studio-5.financialcontent.com/investplace/quote?Symbol=JEF
  5. SHW: http://studio-5.financialcontent.com/investplace/quote?Symbol=SHW
  6. PCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=PCP
  7. TIE: http://studio-5.financialcontent.com/investplace/quote?Symbol=TIE
  8. DHI: http://studio-5.financialcontent.com/investplace/quote?Symbol=DHI
  9. BZH: http://studio-5.financialcontent.com/investplace/quote?Symbol=BZH
  10. HOV: http://studio-5.financialcontent.com/investplace/quote?Symbol=HOV
  11. KBH: http://studio-5.financialcontent.com/investplace/quote?Symbol=KBH
  12. GILD: http://studio-5.financialcontent.com/investplace/quote?Symbol=GILD
  13. optimistic news about hepatitis C drug trials: http://www.marketwatch.com/story/gilead-shares-jump-on-hepatits-c-drug-results-2012-11-12
  14. RIMM: http://studio-5.financialcontent.com/investplace/quote?Symbol=RIMM
  15. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  16. CS: http://studio-5.financialcontent.com/investplace/quote?Symbol=CS
  17. VRNG: http://studio-5.financialcontent.com/investplace/quote?Symbol=VRNG
  18. DNDN: http://studio-5.financialcontent.com/investplace/quote?Symbol=DNDN
  19. VVUS: http://studio-5.financialcontent.com/investplace/quote?Symbol=VVUS
  20. JRCC: http://studio-5.financialcontent.com/investplace/quote?Symbol=JRCC
  21. NS: http://studio-5.financialcontent.com/investplace/quote?Symbol=NS
  22. MCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=MCP

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