Market Wrap: Spain Yields Rip; Mixed Bag of Earnings; Merger Monday!; JoePa & Penn State's Darkest Hour

July 23, 2012 5:28 PM EDT
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Market wrap-up for July 23rd

End of the Day: Dow Jones down 101.1 to 12,921.46; S&P 500 down 12.1 to 1,350.52; Nasdaq down 35.2 to 2,890.15

The following is a brief summary of events moving markets today:
  • Oops, Spain did it again: Following a 20 basis point rise last Friday as investors demanded better yields to invest in Spanish debt, yields made a similar move today, reinforcing lack of confidence in the troubled nation.

    Data had 10-year Spanish Treasuries yielding 7.49 percent.

    For the rest of 2012, Spain needs to sell about €27 billion ($33 billion) more bonds to cover all of its deficits and repay maturing debt. Sales are becoming tougher as well, with domestic banks easing purchased of the debt. Spain typically relied on domestic financial institutions to buy a good chunk at each offering.

    Markets were bad enough in Spain today, that Spanish market regulators instituted a short ban for the next three months.

  • Merger Monday!: Making the most notable acquisition of the session was CNOOC Ltd. (NYSE: CEO), which announced a deal to acquire Nexen (NYSE: NXY) for $27.50 per share, or total value of $15.1 billion.

    Other notable mergers include:
    • Genesee & Wyoming Inc. (GWI) (NYSE: GWR) and RailAmerica, Inc. (NYSE: RA) have entered into an agreement under which GWI will acquire RailAmerica for an all cash purchase price of $27.50 per share.
    • NRG Energy, Inc. (NYSE: NRG) and GenOn Energy, Inc. (NYSE: GEN) signed a definitive agreement to combine the two companies in a stock-for-stock tax-free transaction.
    • DigitalGlobe, Inc. (NYSE: DGI) and GeoEye, Inc. (Nasdaq: GEOY), approved a definitive merger agreement under which the companies will combine in a stock and cash transaction valued at approximately $900 million.
    • Talisman Energy Inc. (NYSE: TLM) has reached an agreement in the North Sea with Sinopec International Petroleum Exploration and Production Corporation (Sinopec), whereby Sinopec (NYSE: SHI) will acquire a 49% equity interest in Talisman's UK North Sea business, Talisman Energy (UK) Limited (TEUK), for $1.5 billion.
    • VMware, Inc. (NYSE: VMW) today announced it has signed a definitive agreement to acquire Nicira, Inc. for $1.05 billion in cash plus approximately $210 million of assumed unvested equity awards.
  • More news on the earnings front:
    • McDonald's (NYSE: MCD) reported second quarter 2012 EPS of $1.32, missing expectations for $1.38. Comps rose 3.7 percent, outpacing views.
    • Texas Instruments (NYSE: TXN) missed Q2 earnings expectations by 3 cents, with sales of $3.335 billion also missing expectations.
    • (Nasdaq: BIDU) reported Q2 EPS of $1.24 on revs of $858.8 million, both besting views.
    • Halliburton (NYSE: HAL) reported Q2 EPS of 82 cents on revs of $7.2 billion, compared with expectations calling for EPS of 75 cents and revs of $6.97 billion.
  • Tech giant to drop a few pounds: Cisco Systems (Nasdaq: CSCO) said it was going to lay off about 1,300 employees, which amounts to 2 percent of its total workforce.

    A spokesperson for the company said the cuts were part of "a continuous process of simplifying the company, as well as assessing the economic environment in certain parts of the world."

    Cisco ended the session down 1.8 percent.

  • Short of full eradication of the program: Late Penn State coach Joe Paterno saw his title of "winningest college football coach" go up in smoke Monday, following implementation of some of the harshest fines in NCAA history. The NCAA will fine Penn State $60 million, ban it from bowl games for four years, and vacated all wins from 1998 through 2011.

    JoePa's statue was also removed last Sunday.
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