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Everything Must Go! — Thursday’s IP Market Recap

Heinz, US Airways headline a big day of buyouts and mergers


InvestorPlace Market RecapDownbeat news on Europe’s still-sagging economy took a backseat to upbeat economic news and a new wave of suddenly hot M&A activityy.

Berkshire Hathaway (BRK.A, BRK.B) on Thursday announced that it will team up with 3G Capital in a $28 billion buyout of foods giant H.J. Heinz (NYSE:HNZ), which was bought at a 20% premium.

Also Thursday, the much-anticipated $11 billion airline merger between US Airways (NYSE:LCC) and American (PINK:AAMRQ) 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) altered the conditions of a buyout of Grupo Modelo (PINK:GPMCY) — including giving Constellation Brands (NYSE:STZ) 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 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, +8.6%) and Trulia (NYSE:TRLA, +5.2%), both of which rose on solid housing news and recent earnings.

Elsewhere, Cisco (NASDAQ:CSCO) 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, -1%) also was a Dow drag, continuing its recent swoon; however, rival PepsiCo (NYSE:PEP, +1.1%) gained after the beverage maker logged better-than-expected earnings.

Food producer Mondelez (NASDAQ:MDLZ) sank more than 4% after the company announced earnings that missed expectations. General Motors (NYSE:GM) also disappointed with its quarterly results, sending shares lower by 3%.

Finally, Best Buy (NYSE:BBY) shares surged ahead nearly 4% after announcing the much-discussed effort by founder Richard  Schulze to take the company private may be dead.

Three Up

  • Angie’s List (NASDAQ:ANGI): Up 23.8% ($3.24) to $16.86.
  • SunPower (NASDAQ:SPWR): Up 22.4% ($2.22) to $12.13.
  • Alpha Natural Resources (NYSE:ANR): Up 13.9% ($1.18) to $9.67.

Three Down

  • Weight Watchers (NYSE:WTW): Down 17% ($9.20) to $44.91.
  • Windstream (NASDAQ:WIN): Down 7.3% (72 cents) to $9.09.
  • Cabela’s (NYSE:CAB): Down 5.2% ($2.65) to $48.11.

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

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