Tuesday’s quick post-holiday bump — built on solid economic news in housing and consumer confidence — fell flat Wednesday as investors instead showed unease about changes to the Federal Reserve’s easing policies.
Wall Street also was focused on the International Monetary Fund, which cut its projected growth rate for China, and the OECD, which said it expected Europe’s economy to contract 0.6% in 2013, compared to its original 0.1% projection.
The end result was a down day across the board. The S&P 500 led the way down with 0.7% losses to 1648.36, the Dow Jones Industrial Average declined 0.69% to close at 15302.80, and the Nasdaq lost 0.61% to 3467.52.
Amid the recent spike in 10-year Treasury yields to above the 2% mark, income-producing Dow staples like Pfizer (PFE, -2.5%), Procter & Gamble (PG, -2.4%) and Johnson & Johnson (JNJ, -2.2%) took a hit, as did Colgate-Palmolive (CL, -3%) and Clorox (CLX, -2%).
There was big news on the mergers and acquisition front, as Chinese meat processor Shuanghui agreed to purchase U.S. based-pork producer Smithfield Foods (SFD) for $4.27 billion, or $34 per share — a 31% premium to SFD’s closing price Tuesday. Smithfield rival Tyson Foods (TSN) improved just more than 2%.
Lastly, Houston-based Service Corporation (SCI), which provides funeral services and products, agreed to buy rival Stewart Enterprises (STEI) for $1.4 billion, or $13.25 per share — a 36% premium — with the deal subject to regulatory approval. SCI shares also moved up 4% on the day.
- Sonus Networks (SONS): Up 12.5% (32 cents) to $2.89.
- Aruba Networks (ARUN): Up 6.9% (94 cents) to $14.66.
- Tata Motors (TTM): Up 5.5% ($1.48) to $28.33.
- Orbitz Worldwide (OWW): Down 16.8% ($1.46) to $7.25.
- Chico’s (CHS): Down 7.1% ($1.38) to $17.96.
- Cliffs Natural Resources (CLF): Down 5.8% ($1.16) to $18.92.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long JNJ.