Market Overview

Mid-Morning Market Update: Markets Tumble; Southern Co To Acquire AGL Resources For $66/Share

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Following the market opening Monday, the Dow traded down 3.93 percent to 15,813.76 while the NASDAQ slipped 4.46 percent to 4,496.11. The S&P also fell, dropping 4.06 percent to 1,890.92. China’s Shanghai Composite Index dipped 8.49 percent today.

Leading and Lagging Sectors

In trading on Monday, utilities shares fell by just 2.8 percent. Meanwhile, top gainers in the sector included AGL Resources Inc. (NYSE: GAS), up 28 percent, and TransAlta Corporation (USA) (NYSE: TAC), up 1.2 percent.

In trading on Monday, basic materials shares dipped by 5.30 percent. Top losers in the sector included Sinopec Shanghai Petrochemical Co. (ADR) (NYSE: SHI), down 14 percent, and Freeport-McMoRan Inc (NYSE: FCX), off 10 percent.

Top Headline

Southern Co (NYSE: SO) announced its plans to acquire AGL Resources Inc. (NYSE: GAS) in a $12 billion deal.

Southern will pay $66 per share in cash for AGL, representing a 38 percent premium over AGL’s closing price of $47.86 on Friday.

Equities Trading UP

AGL Resources Inc. (NYSE: GAS) shares shot up 26 percent to $60.49 after Southern Co (NYSE: SO) announced its plans to acquire AGL Resources in a $12 billion deal.

Tuesday Morning Corporation (NASDAQ: TUES) shares were also up, gaining 3 percent to $6.10. Stifel Nicolaus upgraded Tuesday Morning from Hold to Buy and announced a price target of $9.00.

Shares of TransAlta Corporation (USA) (NYSE: TAC) got a boost, shooting up 1 percent to $4.91. BMO Capital upgraded TransAlta from Market Perform to Outperform.

Equities Trading DOWN

Vital Therapies Inc (NASDAQ: VTL) shares tumbled 78 percent to $3.89 after the company reported that topline results of its VTI-208 trial failed to meet the primary endpoint for overall survival. Credit Suisse downgraded Vital Therapies from Outperform to Neutral and lowered the price target from $25.00 to $9.00.

Shares of Netflix, Inc. (NASDAQ: NFLX) were down 11 percent to $92.41. SoftBank Corp (OTC: SFTBY) will exclusively offer a fully integrated Netflix experience, including billing, when Netflix Japan launches on September 2.

Yahoo! Inc. (NASDAQ: YHOO) was down, falling 6 percent to $31.05 after dropping 3.43 percent on Friday.

Commodities

In commodity news, oil traded down 3.73 percent to $38.94, while gold traded down 0.25 percent to $1,156.70.

Silver traded down 4.78 percent Monday to $14.62, while copper fell 4 percent to $2.21.

Eurozone

European shares were lower today. The eurozone’s STOXX 600 fell 5.36 percent, the Spanish Ibex Index declined 5.11 percent, while Italy’s FTSE MIB Index dropped 5.31 percent. Meanwhile, the German DAX slipped 4.66 percent, and the French CAC 40 dropped 5.33 percent while UK shares fell 4.27 percent.

Economics

The Chicago Fed National Activity Index increased to 0.34 in July, versus a reading of -0.07 in June.

 

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