A short week that began with three consecutive Dow Jones Industrial Average gains, which is saying a lot amid these worrisome economic times, ended with a fizzle as it slipped 7.9 points to close at 12,638.32 on Friday, with Deal Stocks following with mixed, if not tepid, performance. The broader market's modest loss can be pegged to Commerce Department reports that consumer spending had a weak 0.2% gain in April while income also grew a mere 0.2%.
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At least one retailer survived the weak consumer spending news as Restoration Hardware Inc. soared 13.14% to close at $3.96 per share. Restoration Hardware's shares have traded down in recent days, possibly on concerns that weaknesses in the retail sector pose risks to its pending $4.50 per share acquisition by private investor Catterton Partners.
US Airways Group Inc., which has gained over the past week due to relief in oil prices, sunk 7.64% to close at $3.99 on Friday on news that UAL Corp., the parent of United Airlines Inc., on Thursday walked away from merger talks in favor of pursuing an alliance with Continental Airlines Inc., whose shareholders don't appear enthused as its shares inched down 0.28% to close at $14.41 on Friday.
One group of shareholders that did seem enthused about sale talks was that of Harris Corp., which gained 6.17% to close at $65.78. However, shareholder reaction may not have mirrored that of the company's board, as initial bids for Harris were apparently lower than the board's expectations. According to a Friday Wall Street Journal report, expressions of interest valued Harris at about $10 billion, or just over $70 per share, missing the $75 to $80 per share the board had anticipated. - Michael Rudnick
