U.S. Stocks Close Slightly Lower, US Air And AMR Near $11 Billion Merger

Category: Markets / Finance / Feb 11, 2013 5:28PM EDT
U.S stocks ended a quiet session with slight moves on Monday (February 11) as investors found few reasons to keep pushing shares higher following a six-week advance, though the longer-term trend was still viewed as positive. The benchmark index is up more 6.4 percent in 2013, putting both the S&P 500 and Dow industrials near multi-year highs. The S&P is less than 4 percent from its all-time intraday high of 1,576.09, hit in October 2007. Volume was light, with about 4.812 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, well below the daily average so far this year of about 6.48 billion shares. Wall Street was modestly lower throughout the session but regained some ground in the final hour of trading as Google Inc rebounded off earlier losses. Shares of the Internet search giant dipped 0.4 percent to $782.42 (USD), recovering from earlier declines of 1 percent after the company said in a filing former chief executive Eric Schmidt is selling roughly 42 percent of his stake in the company. The Dow Jones industrial average was down 21.81 points, or 0.16 percent, at 13,971.16. The Standard & Poor's 500 Index was down 0.92 points, or 0.06 percent, at 1,517.01. The Nasdaq Composite Index was down 1.87 points, or 0.06 percent, at 3,192.00. President Barack Obama will describe his plan for spurring the economy in his State of the Union address on Tuesday (February 12). He is expected to offer proposals for investment in infrastructure, manufacturing, clean energy and education. About 53 percent of stocks traded on the New York Stock Exchange closed lower while slightly more Nasdaq-listed stocks closed in negative territory. In stock-related mergers, US Airways Group Inc and AMR Corp are nearing an $11 billion deal that would create the world's largest airline. The deal could be announced within a week, after resolving key differences on valuation and management structure, people familiar with the matter said. The deal would come more than 14 months after the parent of American Airlines filed for bankruptcy in November 2011, and would mark the last combination of legacy U.S. carriers, following the Delta-Northwest and United-Continental mergers. The all-stock merger is expected to value the combined carrier at between $10.5 billion and $11 billion, and would give AMR creditors 72 percent of the ownership in the new company and US Airways shareholders the rest, they said. A combination with US Airways would create the world's top airline by passenger traffic and help the two carriers better compete with rivals United Continental Holdings and Delta Air Lines Inc. As part of the merger, US Airways will also leave the Star Alliance to join the oneworld global airline alliance, of which American Airlines is an anchor member along with British Airways, the people familiar with the matter said. The airlines are estimating that a merger will bring about $1 billion in revenue and cost benefits, they said. The new American would have a solid presence on the important U.S. East and West coasts and on North Atlantic routes, given American's revenue-sharing joint venture with British Airways and Iberia. (Video Source: Reuters)