Mid-Morning Market Update: Markets Down; Targa To Acquire Atlas Pipeline, Atlas Energy

Following the market opening Monday, the Dow traded down 0.13 percent to 16,523.35 while the NASDAQ tumbled 0.51 percent to 4,254.26. The S&P also fell, dropping 0.31 percent to 1,900.19.

Leading and Lagging Sectors

Basic materials shares gained 1.32 percent on Monday. Top gainers in the sector included Cliffs Natural Resources CLF, up 4.3 percent, and Randgold Resources GOLD, up 5.4 percent.

In trading on Monday, cyclical consumer goods & services shares were relative laggards, down on the day by about 0.51 percent. Top losers in the sector included Lithia Motors LAD, down 16 percent, and Luxottica Group SpA LUX, off 8.9 percent.

Top Headline

Targa Resources Partners LP NGLS and Targa Resources Corp TRGP announced the purchase of Atlas Pipeline Partners LP and Atlas Energy LP ATLS for $7.7 billion.

Atlas Pipeline Partners LP will be purchased for a total consideration made up of $5.8 billion in cash and $1.8 billion in debt. Each Atlas Pipeline holder will receive 0.5846 units of Targa Resources Partners LP and a one-time cash payment of $1.26 per unit for a total consideration of $38.66 per APL unit.

Equities Trading UP

Atlas Energy, L.P ATLS shares shot up 21.23 percent to $39.29 after Targa Resources Partners LP NGLS and Targa Resources Corp TRGP announced the purchase of Atlas Pipeline Partners LP APL and Atlas Energy LP for $7.7 billion.

Shares of CSX CSX got a boost, shooting up 12.47 percent to $33.67. Canadian Pacific Railway CP has reportedly approached CSX about a potential merger, that would create a $62 billion North American railway powerhouse, according to sources, as reported by WSJ. The approach made in the past week, was rebuffed by CSX, according to people familiar with the matter.

Alnylam Pharmaceuticals ALNY shares were also up, gaining 17.39 percent to $85.52 after the company reported six-month clinical data from patisiran phase 2 OLE study in patients with familial amyloidotic polyneuropathy.

Equities Trading DOWN

Shares of Lithia Motors LAD were down 16.42 percent to $67.58 after the company lowered its Q3 earnings forecast.

DryShips DRYS shares tumbled 18.55 percent to $1.52 after the company announced the withdrawal of its public senior secured notes offering. Imperial Capital downgraded DryShips from Outperform to Underperform and lowered the price target from $4.00 to $1.40.

Shutterfly SFLY was down, falling 8.53 percent to $42.96 as Bloomberg reported that Silver Lake Management LLC has decided not to pursue acquisitions of Shutterfly, as well as Snapfish from Hewlett-Packard Company HPQ, after failing to reach an agreement, according to a source.

Commodities

In commodity news, oil traded down 1.34 percent to $84.67, while gold traded up 0.46 percent to $1,227.30.

Silver traded up 0.50 percent Monday to $17.39, while copper rose 0.08 percent to $3.04.

Euro zone

European shares were higher today. The eurozone’s STOXX 600 gained 0.34 percent, the Spanish Ibex Index rose 0.72 percent, while Italy’s FTSE MIB Index climbed 0.82 percent. Meanwhile, the German DAX surged 0.60 percent and the French CAC 40 rose 0.39 percent while UK shares rose 0.44 percent.

Economics

Chicago Federal Reserve Bank President Charles Evans is expected to speak today.