Deal talk took a backseat to oil talk Wednesday afternoon as crude oil rose to more than $123 a barrel. The rising cost of oil pulled the plug on the markets causing the Dow to drop 206.48, or 1.59%, to 12,814.35, while the Nasdaq fell 44.82, or 1.80%, to 2438.49. Some Deal Stocks, especially ones in the airline industry, showed no confidence as prospects of continued higher energy costs could put a monkey wrench in some possible mergers.
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U.S. Airways Group Inc. [LCC], which reportedly has been considering a merger with United Airlines, lost some altitude from the news of higher oil prices. UAL also was weighed down because the head of United Airlines' pilots union said Wednesday that combining with US Airways should be only a last resort for the carrier, asserting it could take as long as seven years to integrate the two. Overall, U.S. Airways fell 66 cents, or 8.59%, to $7.34. Meanwhile, Northwest Airlines Inc. [NWA], which is merging with Delta Airline Inc. [DAL], dropped 20 cents, or 2.54%, to $7.67.
Despite the broader market drop, WellCare Health Plans Inc. jumped, rising, $2.82, or 6.46%, to $46.49 as Fortune reported the company may be in merger talks with UnitedHealth Group Inc. The rumor follows talk earlier this year reported by Dealscape that WellCare was going on the auction block, which coincided with the planned departure of three executives. - Gerald Magpily
