Stock Market News for June 14, 2011 - Market News

The benchmarks ended flat on Monday, as mergers and acquisitions prevented the markets from sliding yet again on euro-zone debt concerns. Mergers and acquisitions were the major factor responsible for market movement in a choppy session of trading, amidst the lack of any economic data.

The Dow Jones Industrial Average (DJIA) gained 0.01% to settle at 11,952.97. The Standard & Poor 500 (S&P 500) closed at 1,271.83, after climbing 0.1%. The Nasdaq Composite Index shed 0.2% and ended at 2,639.69, The Dow and the S&P 500 are up 3.2% and 1.1% year to date, respectively, but Nasdaq washed out its yearly profit and is down 0.5%. On the New York Stock Exchange (NYSE), Amex and Nasdaq volumes remained tight at 6.85 billion shares, below the daily average of 7.59 billion shares. On the NYSE, the advance decline ratio was 1,344 to 1,674.

The Dow registered a better performance yesterday, compared with its previous trading day when only Bank of America Corporation BAC, JPMorgan Chase & Co. JPM and AT&T, Inc. T managed to move higher among the 30 Dow components. On Monday, advancing stocks outnumbered the decliners as 19 of the 30 components ended in the green while the rest settled in the negative zone. Bank of America, JPMorgan and AT&T were once again the gainers and they surged 1.6%, 1.5% and 0.7%, respectively. Other major gainers included American Express Company AXP, Kraft Foods Inc. KFT, Microsoft Corporation MSFT, Pfizer Inc. PFE and Verizon Communications Inc. VZ and they were up 1.1%, 1.0%, 1.4%, 1.7% and 1.3%, respectively.

The S&P 500 gained for just the second time in nine trading days. The S&P 500 had earlier dropped below its technical level of 1, 300 and experts' opined that the index might trace back to its March low of 1,250. On Monday, the index closed almost at the levels it had opened, while the Nasdaq continued to remain above its 200-day moving average.

Amidst a lackluster day devoid of any economic reports, mergers and acquisition news was the primary factor influencing the markets, though another downgrade of the Greece's credit rating limited the gains. As the earnings season is still a month away, corporate deals will significantly affect investor sentiments, along with several economic reports lined up for the week.

Coming to mergers and acquisitions news, Allied World Assurance Company Holdings Ltd. AWH and Transatlantic Holdings Inc. TRH announced their merger in a deal worth $3.2 billion. Shares of Allied World Assurance Company plunged 4.5%, while Transatlantic Holdings soared 9.5%.

Shares of Timberland Co. TBL sky-rocketed 44.1% as V.F. Corporation VFC agreed to buy the outdoor clothing and footwear company for $2 billion, or $43 per share. Additionally, Honeywell International Inc. HON agreed to acquire EMS Technologies Inc. ELMG for $491 million, or $33 per share. Shares of Honeywell International gained 0.3% while shares of EMS Technologies soared 32.3%.

Separately, news of Wendy's/Arby's Group, Inc. WEN selling its Arby's Restaurant Group to private-equity firm Roark Capital Group's, for $430 million, pushed the shares of the former up by 0.9%.

However, optimism from these deals was negated to a certain extent after Standard & Poor's, downgraded Greek debt by three notches to CCC. This makes it the lowest-rated country in the world in the agency's rankings. Standard & Poor's also warned any restructuring would be considered default and said: “In our view Greece is increasingly likely to restructure its debt in a manner that, under the conditions of any package of additional funding provided by Greece's official creditors, would result in one or more defaults under our criteria”. In such a scenario, S&P would lower the nation's credit rating to "selective default," and the ratings on the country's debt instruments will be lowered to “D”.