Despite some big acquisition news and a surprisingly strong regional manufacturing report US stocks closed weaker on Monday. A big fall in Chinese shares fuelled concerns about the global economy and caused investors to steer clear of risky assets.
Energy shares lead the declines following a drop in the Shanghai Composite index and after a big drop in oil prices. The Dow Jones industrial average fell 48 points to 9,496. The S&P500 Index lost 8 points to 1,021 and the NASDAQ fell 20 points to 2,009.
In economic news: The Institute of Supply Management’s Chicago Performance of Manufacturing Index rose to a read of 50 in August, up from 43.4 in July. The read surprised economists who expected a smaller rise to 47.2.
In company news: Shares in global entertainment company The Walt Disney Company (NYSE:DIS) fell 2.98 per cent to $26.04 and shares in comic book publisher Marvel Entertainment Inc (NYSE:MVL) soared 25.15 per cent to $48.37. Walt Disney says it is to buy Marvel for around $4 billion. As part of the deal Marvel shareholders will receive $30 cash and about 0.745 of a Disney share for each Marvel share they own.
In more deal news, shares in oilfield services company Baker Hughes Incorporated (NYSE:BHI) dropped 9.56 per cent to $34.45 and shares in rival BJ Services Company (NYSE:BJS) rose 4.08 per cent to $16.06. Baker is to acquire rival BJ Services for around $5.5 billion in a cash and stock deal.
Shares in home appliance manufacturer Whirlpool Corporation (NYSE:WHR) lost 2.87 per cent to $64.21. The company says it will incur around $51 million in charges related to the shutdown of its Facility in Evansville, Indiana.
Shares in mental health service provider The GEO Group Inc (NYSE:GEO) added 3.33 per cent to $18.32. The company’s mental health division is to acquire private company Just Care Inc in a deal worth $40 million. GEO also upgraded its third and fourth quarter outlooks.
Checking the NASDAQ Top 100: Making the most gains overnight was Garmin adding 1.7 per cent to $32.87. Cephalon and Henry Schein were the next best performers. Looking at the downside, Apollo Group was the worst performer, falling 4.03 per cent to $64.84, followed by Flextronics and Wynn Resorts.
