Transatlantic Holdings, the reinsurer formerly owned by the American International Group, surged 9.5 percent after agreeing to merge with Allied World Assurance Company Holdings of Switzerland. Timberland, the footwear maker, rallied 44 percent as the VF Corporation announced plans to buy it for $1.8 billion. Halliburton and Freeport-McMoRan Copper and Gold slumped at least 1.2 percent amid falling commodity prices.
The Standard Poor’s 500-stock index rose 0.85 of a point, or 0.07 percent, to 1,271.83. The Dow Jones industrial average climbed 1.06 points, or 0.01 percent, to 11,952.97 after sliding for six straight weeks, the longest stretch since 2002. The Nasdaq composite index average fell 4.04 points, or 0.15 percent, to 2,639.69.
“Corporate managers are more positive on their prospects than investors, which we see expressed in the deals today,” said Timothy A. Hoyle, director of research at Haverford Trust in Radnor, Pa. “People came in this morning and saw these good deals,” Mr. Hoyle said.
More than $1 trillion has been erased from United States markets since the S. P. 500-stock index peaked on April 29, leaving the measure trading at about 12.8 times its companies’ estimated earnings for 2011. That is the cheapest valuation since last August.
The S. P. 500 fell 6.8 percent from the end of April through June 10 as sales of used homes unexpectedly declined, the unemployment rate rose and concern about the European debt crisis increased.
Transatlantic rallied 9.5 percent, to $48.19 Monday after agreeing to merge with Allied World Assurance in a $3.2 billion deal that creates a reinsurer with operations in 18 countries.
Timberland climbed 44 percent, to $43.20, after agreeing to be bought for $43 a share.
Graham Packaging jumped 17 percent, to $25.63. Graham, a maker of plastic containers controlled by the Blackstone Group, said it had received an unsolicited proposal from an unidentified bidder to acquire all of its shares for $25 a share in cash. The company agreed in April to be bought by Silgan Holdings for about $4.1 billion including debt.
Ness Technologies, a computer services provider based in Israel, rose 14 percent, to $7.60, after agreeing to be acquired by Citi Venture Capital International for $307 million in cash.
Energy shares fell 1.4 percent, the most among 10 S. P. 500 industry groups. Materials makers lost 0.6 percent, the second most in the benchmark index.
Crude oil for July delivery fell 2 percent, to $97.30 a barrel on the New York Mercantile Exchange, after declining to $96.13, the lowest intraday level since May 20. The Thomson Reuters/Jefferies CRB Index of commodities slipped 1 percent.
Stocks retreated before rebounding and oil extended losses as Standard Poor’s cut Greece’s credit rating to the world’s lowest debt grade.
Greece’s credit rating was cut by three levels to CCC, and S. P. said on Monday that Greece was “increasingly likely to restructure its debt.” That probably would “result in one or more defaults under our criteria,” S. P. said. Moody’s Investors Service decided this month to grade Greece only one level higher.
The European Central Bank president, Jean-Claude Trichet, and the German finance minister, Wolfgang Schäuble, remained at odds over investors’ role in the second Greek rescue in 14 months. The dispute turns on how politicians keep a promise to push creditors to pay some of the cost, a step that Mr. Trichet said on June 9 could be an “enormous mistake.”
Finance ministers have called a meeting for Tuesday as they try to avoid what Olli Rehn, the European economic and monetary affairs commissioner, called a “Lehman Brothers catastrophe on European soil.”
Interest rates were steady. The Treasury’s benchmark 10-year note fell 3/32, to 101 7/32, and the yield rose to 2.98 percent, from 2.97 percent last Friday.
Article source: http://www.nytimes.com/2011/06/14/business/14markets.html?partner=rss&emc=rss
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