There was no love on the Street for stocks involved in deals during midday trading as the overall markets fell behind the backdrop of comments to the Senate Banking Commitee from Federal Chief Ben Bernake, Treasury Secretary Henry Paulson and SEC Chairman Chrisopher Cox. Overall, the Dow fell 1.14% to 12,408.85 and the Nasdaq backpedaled 1.44% to 2,339.74.
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Investors were focused on Bernake, who said the Fed will monitor the effects of the recent rate cuts and will be ready for more if signs of an economic rebound do not materialize. That was good news for dealmakers who will have access to cheaper money for acquisitions but not enough for investors to continue keep the market winning streak at four. One big deal that reached a milestone was the Department of Justice approval of Clear Channel Communications Inc. [CCU ] $19.3 billion sale to Bain Capital LLC and Thomas H. Lee Partners LP. The deal received approval on condition it sell six radio stations in four markets.
Air France-KLM [KLM] is seeing some mild turbulence after a report that it would invest in a merged Delta Airlines Co. [DAL]-Northwest Airlines Corp. [NWA]. The Deal's Lou Whiteman reported about the possible investment last week.
Meanhile, Bank of America Inc. [BAC]-Countrywide Financial Corp. [CFC] proposed deal received resistance from hedge fund investor, SRM Global Master Fund LP, who also increased its stake in the target to 5.48% from 5.19%, up to 31.7 million shares. On the earnings front, Gemstar-TV Guide International Inc. [GMST], which is in a proposed merger with Macrovision Corp. [MVSN], will announce fourth-quarter earnings after market close. - Gerald Magpily
