Mergers and Break-Ups Rule the Markets on Cupid's Day of Love

Today's headlining news primarily focused on different mergers and acquisitions that were announced. The leading story, in-case you missed it, was the news that Berkshire Hathaway  and privately held 3G Capital were entering into a joint venture to acquire H.J. Heinz for $28 billion.  The next big merger news was that US Airways and American Airlines have also agreed to become one. The deal has now been approved by both board of directors, and the new union will create the nation's largest airline.  

But these mergers, a few more that I will mention later, and a drop in the initial jobless claims, were not enough to pull the Dow Jones Industrial Average higher for the day. The index closed down nine points, or 0.07%, while the S&P 500 and the Nasdaq both fared slightly better, gaining 0.07% and 0.06%, respectively. The Dow now sits at 13,973, and is still up 6.63% year to date, but 16 of its 30 components closed in the red this afternoon. This morning, I explained why three of the six losers were moving into negative territory; if you would like to read who fell and why, click here. Or stick around to find out who were the Dow's big winners.

Dow stocks that moved higher
The Dow's biggest winner today was Alcoa , as shares rose 2.09%. Investors pushed the stock higher, after it was announced that, moving forward, Alcoa will be party to a three-way love triangle, which now happens to include the Chinese government. This morning, the CITIC Group, which is a Chinese state-owned enterprise, purchased a 13% stake in Australia's Alumina, for $467 million. Alcoa and Alumina have a joint venture called Alcoa World Aluminum & Chemicals. Alumina's 40% stake in the Alcoa World happens to be its main asset.  Long-term, Alcoa's new connection to the Chinese government may be a good thing, as both parties will have a common goal.


Another merger which was announced earlier in the week between American Express and Twitter, may be the reason shares of the credit card company rose 0.39% today. The new service allows cardholders to "sync" their American Express card to a Twitter account, and then they will be able to purchase items with their card by simply tweeting.  If this platform for consumer consumption takes off, American Express could realize huge returns due to an increased transaction count.

Lastly, the break-up which had investors cheering today came from JPMorgan Chase . Bloomberg reported that the company was parting ways with a number of top employees. The report stated that three managing directors and 18 executive directors were cut, while a few senior employees left after they saw bonuses shrink. The cuts were primarily on the equity trading side of JPMorgan's business, which experienced a slight revenue decline. The firm's equities business slid 1.8%, to $4.4 billion, in 2012, while the fixed-income unit rose 4%, to $15.4 billion, during the same timeframe.  

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Are you at ease ... or nervous? It's been a great five-year run for investors, with the Dow and S&P at or near all-time highs. Yet, fears abound. When will the next downturn hit? Will political gridlock lead to portfolio-killing inflation? To learn how to protect your portfolio, click here for free guidance from the Motley Fool Pro Academy

The article Mergers and Break-Ups Rule the Markets on Cupid's Day of Love originally appeared on Fool.com.

Fool contributor Matt Thalman owns shares of Berkshire Hathaway and JPMorgan Chase & Co.. Follow Matt on Twitter @mthalman5513. The Motley Fool recommends American Express and Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway and JPMorgan Chase & Co.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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