Deal Stocks and the broader market sagged Tuesday due in part to a
National Association of Realtors report of the seventh existing home
sales decline in eight months, coupled with continued news of soaring
oil prices as light sweet crude oil for May delivery neared $120 per
barrel in Tuesday trading. The Dow Jones Industrial Average
sunk 104.79 points Tuesday to close at 12,720.79.
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Oil woes looked to have weighed down Delta Air Lines
Inc.'s and Northwest Airlines Corp.'s stock despite news that union
leaders representing Delta pilots said in a late Monday letter that
the group would be
open to using arbitration
to accelerate the integration of the two airlines' pilot union groups,
which has been viewed as one of the major hurdles of Northwest's
pending $3.6 billion acquisition of its rival. Delta's stock fell
17.07% to close at $6.80 per share Tuesday and Northwest slid 17.55% to
$7.47.
CIT
Group Inc., yet another victim of the subprime lending debacle, fell
15.62% Tuesday to close at $1.99 per share. CIT said on Monday that
it would
raise $1.5 billion
from selling common and convertible preferred stock, increasing the
allotment from $1 billion announced on Tuesday. The troubled lender, which has $9 billion in subprime exposures in late March, drew down its
entire $7.3 billion of bank lines to help pay back commercial paper and
other debt and is looking at select asset sales.
Not
all was bleak among deal stocks. Clear Channel Communications Inc. rose
4.39% to $29.74 per share on news that lenders for the $25 billion
buyout by Bain Capital LLC and Thomas H. Lee Partners LP
have offered to arbitrate their dispute over the debt financing. -
Michael Rudnick
