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

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

InvestorPlace 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 As of this writing, he did not hold a position in any of the aforementioned securities.

  1. [Image]:
  2. “Merger Monday,”:
  3. LUK:
  4. JEF:
  5. SHW:
  6. PCP:
  7. TIE:
  8. DHI:
  9. BZH:
  10. HOV:
  11. KBH:
  12. GILD:
  13. optimistic news about hepatitis C drug trials:
  14. RIMM:
  15. JCP:
  16. CS:
  17. VRNG:
  18. DNDN:
  19. VVUS:
  20. JRCC:
  21. NS:
  22. MCP:

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