No news is goods news these days. Wednesday's paltry unemployment news
coupled with late Tuesday's release of the Federal Reserve Board's December meeting minutes woke the bears, mauling the Dow Jones Industrial Average, which tanked 245.50
points to close at 8,769.70. In its wake, the market losses brought down Deal Stocks too.
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Investors were reminded of the dismal
employment picture as the ADP National Employment Report said 693,000
private sector jobs were lost in December, trumping the 476,000 for
November. Friday could be an even darker day on Wall Street as the
Labor Department Report will be released, and the unemployment rate is
expected to rise to 7% from 6.7%.
Another stark reminder of the
bleak job market was news late Tuesday that Alcoa Inc. intends to reduce
its head count by 13,500, or 13%, and cut an additional 1,700 contractor
positions. The aluminum giant also said it expects to sell a handful of
businesses, including its electrical and electronics systems unit,
global foil, cast auto wheels and its European transportation products
unit. Alcoa's shares fell 10.15% to close at $10.89.
NRG Energy
Inc. also was a big loser among Deal Stocks, falling 5.04% to close at
$23.27 per share. Chicago utility giant Exelon Corp. said Wednesday
that the holders of nearly 46% of NRG shares tendered their stock in
the $13 billion takeover offer for the power producer. While this
exceeded Exelon's expectations, it falls short of the needed majority,
so Exelon extended the offer to Feb. 25. Exelon shares fell 3.83% to
close at $55.22.
The Street has not heard much from activist
investors of late as driving events such as mergers, acquisitions and
share buybacks are difficult in the current environment. However,
private equity firm Parthenon Capital LLC spoke up, and the Street
listened. Parthenon in a Tuesday 13D filing pressed Tier Technologies
Inc. to sell or merge, and the electronic payment processor's stock
responded, ticking up 4.39% to close at $5.94. - Michael Rudnick
