Mid-Morning Market Update: Markets Open Lower; Aetna To Acquire Humana For $230/Share

Following the market opening Monday, the Dow traded down 0.32 percent to 17,673.62 while the NASDAQ slipped 0.24 percent to 4,997.41. The S&P also fell, dropping 0.29 percent to 2,070.86.

Leading and Lagging Sectors

Energy shares jumped by 0.98 percent on Monday. Meanwhile, top gainers in the sector included VAALCO Energy, Inc. EGY, up 11 percent, and Pacific Drilling SA PACD, up 6 percent.

In trading on Monday, utilities shares slipped by 1.65 percent. Meanwhile, top losers in the sector included NiSource Inc. NI, down 63 percent, and Huaneng Power International Inc (ADR) HNP, off 2 percent.

Top Headline

Humana Inc HUM aagreed to be acquired by Aetna Inc AET for $37 billion.

Humana also issued a weak profit outlook. Humana projected Q2 adjusted earnings of $1.60 to $1.65 per share, and full-year adjusted earnings of $7.75 per share. Analysts expected Q2 earnings of $2.36 per share and full-year earnings of $8.64 per share.

Equities Trading UP

Weight Watchers International, Inc. WTW shares shot up 21 percent to $4.93 on takeover talks.

Shares of Catabasis Pharmaceuticals Inc CATB got a boost, shooting up 16 percent to $14.42 after the company reported that it has received the FDA Fast Track designation for CAT-1004 for the treatment of Duchenne Muscular Dystrophy.

Versartis Inc VSAR shares were also up, gaining 14 percent to $16.61 after the company announced the removal of the FDA partial clinical hold and continuation of VRS-317 Phase 3 clinical trial.

Equities Trading DOWN

HORSEHEAD HOLDING CORP. ZINC shares tumbled 20 percent to $9.19 after the company issued an update on operations at its Mooresboro, North Carolina zinc production facility.

Shares of Silicom Ltd. SILC were down 22 percent to $28.42 after the company updated its second quarter guidance. The company expected Q2 revenue of $16.8 million to $17.2 million.

Allot Communications Ltd ALLT was down, falling 17 percent to $5.90. Allot Communications issued a weak Q2 and FY revenue guidance.

Commodities

In commodity news, oil traded down 2.50 percent to $54.12, while gold traded up 0.15 percent to $1,165.30.

Silver traded up 0.08 percent Monday to $15.58, while copper fell 3.95 percent to $2.53.

Eurozone

European shares were lower today. The eurozone’s STOXX 600 fell 1.17 percent, the Spanish Ibex Index dropped 2.30 percent, while Italy’s FTSE MIB Index declined 3.65 percent. Meanwhile, the German DAX dropped 1.47 percent, and the French CAC 40 dipped 1.99 percent while UK shares slipped 1.40 percent.

Economics

The services PMI came in at 54.80 in June, versus a prior reading of 54.80.

The ISM services index climbed to 56 in June, versus a May reading of 55.7. Economists were expecting a reading of 55.