Market Overview

Markets Tumble; Dollar Tree To Acquire Family Dollar For $8.5 Billion

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Markets Tumble; Dollar Tree To Acquire Family Dollar For $8.5 Billion

Following the market opening Monday, the Dow traded down 0.37 percent to 16,897.57 while the NASDAQ tumbled 0.44 percent to 4,429.79. The S&P also fell, dropping 0.41 percent to 1,970.23.

Leading and Lagging Sectors

Utilities shares surged 0.63 percent in trading on Monday. Meanwhile, top gainers in the sector included Korea Electric Power (NYSE: KEP), up 6.7 percent, and Calpine (NYSE: CPN), up 2 percent.

In trading on Monday, non-cyclical consumer goods & services shares were relative laggards, down on the day by about 0.52 percent. Top decliners in the sector included Cal-Maine Foods (NASDAQ: CALM), down 6.5 percent, and Omega Protein (NYSE: OME), off 3.4 percent.

Top Headline

Dollar Tree (NASDAQ: DLTR) announced its plans to buy Family Dollar (NYSE: FDO) for around $8.5 billion in a cash-and-stock deal.

The transaction value of $74.50 per share represents around 23% premium to Family Dollar's closing price of $60.66 on Friday.

Equities Trading UP

Trulia (NYSE: TRLA) shares shot up 7.70 percent to $60.69 after Zillow (NASDAQ: Z) announced its plans to buy Trulia for $3.5 billion in stock.

Shares of Family Dollar Stores (NYSE: FDO) got a boost, shooting up 22.20 percent to $74.13 after Dollar Tree (NASDAQ: DLTR) announced its plans to buy Family Dollar for $8.5 billion.

Tyson Foods (NYSE: TSN) shares were also up, gaining 4.81 percent to $41.44 after the company reported upbeat third-quarter revenue and announced its plans to sell its Mexican and Brazilian chicken businesses for $575 million. The company reported weaker-than-expected quarterly net income and announced an offering of 24 million Class A shares.

Equities Trading DOWN

Shares of Armstrong World Industries (NYSE: AWI)) were down 7.53 percent to $51.20 after the company reported weaker-than-expected Q2 results and lowered its FY14 forecast.

Sohu.com (NASDAQ: SOHU) shares tumbled 3.56 percent to $55.35 after the company posted a loss in the second quarter. The company posted a quarterly loss of $45 million, or $1.16 per share, versus a loss of $69 million in the earlier quarter. Non-GAAP net loss came in at US$0.88 loss per share.

Cummins (NYSE: CMI) was down, falling 3.55 percent to $144.82 on Q2 results. The company reported better-than-expected second-quarter earnings and lifted its revenue outlook for the full year.

Commodities

In commodity news, oil traded down 0.78 percent to $101.29, while gold traded up 0.08 percent to $1,306.30.

Silver traded up 0.21 percent Monday to $20.68, while copper fell 0.02 percent to $3.24.

Eurozone

European shares were mostly lower today. The eurozone’s STOXX 600 dropped 0.03 percent, the Spanish Ibex Index declined 0.12 percent, while Italy’s FTSE MIB Index fell 0.26 percent. Meanwhile, the German DAX declined 0.08 percent and the French CAC 40 gained 0.34 percent while UK shares rose 0.11 percent.

Economics

The flash reading of Markit PMI services index came in at 61.00 in July, versus a prior reading of 61.00. However, economists were expecting a reading of 59.80.

The pending home sales index fell to 102.7 in June, versus a revised 103.8 in May. Pending home sales dropped 1.1% June.

The Dallas Fed general business activity index for July will be released today.

The Treasury is set to auction 4-week, 3-month and 6-month bills. The Treasury will also auction 2-year notes.

 

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