Mid-Day Market Update: Capella Education Climbs Following Merger Deal; Gravity Shares Plummet

Midway through trading Monday, the Dow traded down 0.08 percent to 23,415.51 while the NASDAQ climbed 0.35 percent to 6,724.77. The S&P also fell, dropping 0.08 percent to 2,578.90.

Leading and Lagging Sectors

On Monday, the energy shares climbed by 0.93 percent. Meanwhile, top gainers in the sector included CARBO Ceramics Inc. CRR, up 6 percent, and Chesapeake Energy Corporation CHK, up 6 percent.

In trading on Monday, cyclical consumer goods & services shares fell 0.64 percent. Meanwhile, top losers in the sector included Iconix Brand Group Inc ICON, down 24 percent, and Gravity Co., LTD. (ADR) GRVY down 15 percent.

Top Headline

Lennar Corp LEN announced plans to buy CalAtlantic Group Inc CAA for around $9.3 billion in a stock-and-cash deal, including $3.6 billion in debt.

The implied transaction value of $51.34 per share represents a 27 percent premium over CalAtlantic's closing price on Friday.

Equities Trading UP

Supercom Ltd SPCB shares shot up 44 percent to $3.93 after the company reported strong results for its third quarter.

Shares of Capella Education Company CPLA got a boost, shooting up 29 percent to $84.75. Strayer Education Inc STRA and Capella Education agreed to an all-stock merger. Capella Education also posted upbeat quarterly earnings.

Micronet Enertec Technologies Inc MICT shares were also up, gaining 26 percent to $0.849 after the company reported a $3.1 million order for its SmartHub-TREQr5 product.

Equities Trading DOWN

Iconix Brand Group Inc ICON shares dropped 24 percent to $3.71 as the company issued a business update and reported amendment to its term loan. The company announced the winding down of the DanskinNow brand at Walmart, and the dismissal of pending securities class action lawsuits filed against the company.

Shares of Gravity Co., LTD. (ADR) GRVY were down 15 percent to $47.85 following Q3 results. Gravity posted Q3 earnings of $0.34 per share on sales of $20.76 million.

Office Depot Inc ODP was down, falling around 12 percent to $3.28. JP Morgan downgraded Office Depot from Neutral to Underweight.

Commodities

In commodity news, oil traded up 0.37 percent to $54.10 while gold traded up 0.12 percent to $1,273.30.

Silver traded up 0.08 percent Monday to $16.765, while copper rose 0.13 percent to $3.1075.

Eurozone

European shares were mostly higher today. The eurozone’s STOXX 600 gained 0.11 percent, the Spanish Ibex Index rose 2.42 percent, while Italy’s FTSE MIB Index gained 0.26 percent. Meanwhile the German DAX climbed 0.09 percent, and the French CAC 40 slipped 0.02 percent while U.K. shares fell 0.08 percent.

Economics

Consumer spending gained 1 percent in September, versus economists’ expectations for a 0.8 percent growth. Personal income increased 0.4 percent last month.

The Dallas Fed manufacturing business index rose to 27.60 in October, versus prior reading of 21.30. Economists expected a reading of 21.00.

Data on farm prices for September will be released at 3:00 p.m. ET.