Wall Street tumbles but investors remain positive
US stocks slipped yesterday as investors took a break from a four-week rally, but they remained optimistic the advance would resume as a flurry of deals suggested companies were seeing value in the market.
The Dow Jones industrial average closed down 48.22 points, or 0.44 per cent, at 10,812.04. The Standard & Poor’s 500 Index was down 6.51 points, or 0.57 per cent, at 1,142.16. The Nasdaq Composite Index was down 11.45 points, or 0.48 per cent, at 2,369.77. But in defiance of September’s track record as the worst month for stocks, Wall Street was on track for one of its best months in a decade.
Several business deal announcements lifted sentiment. Consumer goods group Unilever plans to buy US hair care group Alberto Culver for $3.7bn. Alberto Culver surged 19.6 per cent to $37.64, while Unilever’s New York-traded stock added 1.1 percent to $28.86.
Meanwhile Wal-Mart Stores the world’s largest retailer, offered to buy Massmart, South Africa’s third-largest retailer by value, for more than $4bn as it seeks to expand on the continent. Wal-Mart, a Dow component, slipped 1.1 per cent to $53.48.
AirTran Holdings jumped 61.3 per cent to $7.34 after Southwest Airlines offered to buy the regional carrier for $7.69 per share. Southwest shot up 8.7 per cent to $13.35.