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Published April 2, 2008 at 12:41 PM
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While the markets took a humongous leap Tuesday, investors are more reserved on Wednesday as they ponder whether the advances can be maintained. Deal Stocks such as Bank of America Corp., J.P. Morgan Chase & Co., Bear Stearns Cos. and Clear Channel Communications Inc. are stuck in neutral, following the trend of the overall markets. Meanwhile, investors were analyzing the words of Fed Chairman Ben Bernanke, who was giving his overview of the economy, testifying to the Joint Economic Committee of Congress. Overall, the Dow is up 29.07, or 0.23%, to 12,683.43, and the Nasdaq is up 15.91, or 0.67%, to 2,378.66 in Wednesday midday trading.
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Financial Deal Stocks, which had an upbeat Tuesday with Bank of America [BAC], J.P. Morgan [JPM] and Bear Stearns [BSC] on the rise, were cautiously down as Fed Chairman Ben Bernanke admitted: "It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly."
Meanwhile, Clear Channel [CCU] was up in early morning trading, thanks to a rumor on the blog theflyonthewall.com that the sponsors, Bain Capital LLC and Thomas H. Lee Partners LP, and the banks were close to a settlement. However, when it became clear the report was either premature or false, the stock dropped slightly. The Deal's Scott Stuart and Chris Nolter reported on the situation Tuesday.
The major gainers of Deal Stocks include:
- IStar Financial Inc. (SFI) rose nearly 10% following the announcement of the close of its $1.7 billion sale, including debt of its TimberStar Southwest joint venture and the venture's 900,000-acre portfolio of forestland and related assets. IStar expects to net $400 million from the sale, while its equity partners will receive the rest.
- Meanwhile, Dillard's Inc. [DDS] is up also nearly 10% as it decided to elect four new directors to avoid a proxy fight with activist shareholder group, Barington Capital Group LP and its affiliate, Clinton Group Inc., which own 5.4% of shares. Although the directors weren't all the Voices of the activist group, the move prompted Barington and Clinton to stop their efforts to elect their slate and to vote for the company's nominees.
- Gerald Magpily
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