The markets Monday looked like a beat-up old Chevy running on empty. Stocks slumped, growling slowly almost seemingly running in reverse, fueled by the dismissal of General Motors Corp. CEO Rick Wagoner and President Obama's warning that the clock is ticking for the automaker and its rival, Chrysler LLC, to come up with restructuring plans or face bankruptcy. Overall, the Dow cratered 254.16, or 3.27%, to 7,522.02, while the Nasdaq dropped 43.4, or 2.81%, to 1,501.80 despite a slew of deal activity that normally would buoy stocks.
In deal news, shares of Sara Lee Corp. (NYSE:SLE) dropped nearly 1.7% as it announced it was examining its strategic options for its European-based International Household & Body Care unit. The company is looking to reduce exposure to Europe's sluggish economy that caused a 2% drop in net sales in the second quarter.
Meanwhile, Walt Disney Co. (NYSE:DIS) fell 4.57% after reportedly nearing a deal to make its content available through Google Inc.'s YouTube video portal. According to paidContent.org, the transaction would trump an earlier deal in the works with Hulu.com, in which Disney was reportedly negotiating an equity stake. Under terms of the Google deal, programming from ABC and Disney would be available on YouTube on a pay-for-play arrangement.
Lastly, shares of BHP Billiton plc (NYSE:BHP), the world's largest miner, fell 6.55% after rumors surfaced it could make a new bid for its smaller rival Rio Tinto Group. The Sunday Telegraph of England claimed that there had been "informal dialogue" between BHP and Rio's advisors. - Gerald Magpily
See Dealscape: Rio Tinto-BHP merger, part II
See Dealscape: Sara Lee continues restructuring
See Corporate Dealmaker: Disney's new Web strategy may include YouTube
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