Thursday's gains evaporated as a wave of pessimism engulfed the markets Friday, triggered by a jump in the unemployment rate and the rising price of oil. One company that should benefit in the spike in the price of fuel is oil and natural gas producer Concho Resources Inc., which agreed to buy Henry Petroleum's energy holdings in the Southwest for $565 million in cash. Overall, the Dow fell 289.37, or 2.29%, to 12,316.06, and the Nasdaq fell 49.70, or 1.94%, to 2,500.35 in Friday midday trading.
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Concho [CXO] jumped $4.74, or 13.74%, to $37 following its acquisition of energy producing properties in New Mexico and Texas. Concho estimates that 70% of the proved reserves contain oil. The demand for oil has spiked with more demand from developing countries China and India, partly contributing to higher prices. Oil jumped more than $6.10 a barrel, or about 5%, to $133.89 in Friday morning trading.
Meanwhile, the unemployment rate spiked to 5.5% as corporations continued to streamline in this slowing economy. One deal that reached a step closer to closing and would certainly layoff redundant positions is Bank of America Corp.'s [BAC] proposed purchase of Countrywide Financial Corp. [CFC]. The Federal Reserve approved the BofA-Countrywide merger. Next on the calendar for the proposed deal is a Countrywide special shareholder vote on the deal on June 25.
Lastly, Yahoo Inc. [YHOO] inched forward while Microsoft Corp. [MSFT] dipped as activist investor Carl Icahn reportedly continued his campaign to force Yahoo! to sell to the software giant. Icahn is now imploring Yahoo! to sell itself for $34.375 per share, or about $49.5 billion. - Gerald Magpily
