by Marc Bastow | February 14, 2013 5:05 pm
[1]Downbeat news on Europe’s still-sagging economy took a backseat to upbeat economic news and a new wave of suddenly hot M&A activity[2]y.
Berkshire Hathaway (BRK.A[3], BRK.B[4]) on Thursday announced that it will team up with 3G Capital in a $28 billion buyout of foods giant H.J. Heinz (NYSE:HNZ[5]), which was bought at a 20% premium.
Also Thursday, the much-anticipated $11 billion airline merger[6] between US Airways (NYSE:LCC[7]) and American (PINK:AAMRQ[8]) was finalized, creating the world’s biggest airline. LCC shareholders weren’t too happy with the deal, as their holdings dropped 5%.
Meanwhile, Anheuser-Busch InBev (NYSE:BUD[9]) altered the conditions of a buyout of Grupo Modelo (PINK:GPMCY[10]) — including giving Constellation Brands (NYSE:STZ[11]) the permanent right to distribute Corona beer and other Grupo Modelo beer brands in the U.S. — to help the deal win U.S. approval. The move sent STZ shares soaring 37%, while BUD advanced more than 5% on the day.
Despite the increased M&A activity — and improvements in both home foreclosure rates[12] and unemployment claim filings — gains were muted Thursday. The S&P 500 and Nasdaq rose fractionally to 1,521.38 and 3,198.66, respectively, while the Dow Jones Industrial Average struggled in dropping a fraction to end at 13,973.39.
The bright sector spot in the market was in real estate search engine sites Zillow (NASDAQ:Z[13], +8.6%) and Trulia (NYSE:TRLA[14], +5.2%), both of which rose on solid housing news and recent earnings.
Elsewhere, Cisco (NASDAQ:CSCO[15]) shares declined just under 1%, dragging on the Dow, after CEO John Chambers telegraphed a cautious future outlook even as the company reported earnings in line with forecasts. Dow component Coca-Cola (NYSE:KO[16], -1%) also was a Dow drag, continuing its recent swoon; however, rival PepsiCo (NYSE:PEP[17], +1.1%) gained after the beverage maker logged better-than-expected earnings.
Food producer Mondelez (NASDAQ:MDLZ[18]) sank more than 4% after the company announced earnings that missed expectations. General Motors (NYSE:GM[19]) also disappointed with its quarterly results, sending shares lower by 3%.
Finally, Best Buy (NYSE:BBY[20]) shares surged ahead nearly 4% after announcing the much-discussed effort by founder Richard Schulze to take the company private may be dead[21].
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.
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