Stocks closed lower once again this week, while West Texas Intermediate crude oil futures failed to hold on to a rally towards $40 per barrel.
First, the scoreboard:
- Dow: 17,519.36, -48.64, (-0.28%)
- S&P 500: 2,050.49, -13.10, (-0.63%)
- Nasdaq: 5,027.29, -70.96, (-1.39%)
And now, the top stories on Wednesday:
- Dow Chemical and DuPont are in merger talks. The Wall Street Journal, citing people familiar with the matter, reported that right after a transaction, the new $120 billion giant would breakup into three, a fairly common M&A practice of late. Those units would be agrochemicals, material sciences, and specialty products, according to Reuters. The deal could still fall apart, and would face regulatory roadblocks in several countries. But the two companies would be building on each other’s strengths and weaknesses: while low oil prices have helped plastics and specialty chemical businesses, agrochemicals units have been slammed by falling crop prices. DuPont and Dow Chemical shares jumped by as much as 11%.
- Yahoo confirmed that it is halting the spinoff of its Alibaba stake. In a statement, the company said it would instead try to spinoff all its properties that aren’t part of the 15% Alibaba stake, including its core internet business, into a new company. Yahoo chairman Maynard Webb also said that even though the deal should have been tax-free, the company was worried about the market’s perception of the tax risk of the new entity.
- We saw some pretty interesting emerging-market-currency moves near the end of the trading session. First, South Africa’s rand tumbled to a record low against the dollar after President Jacob Zuma unexpectedly fired his finance minister Nhlanhla Nene. The currency had already hit a new low earlier on Wednesday, following news Tuesday that slowing exports widened its third-quarter trade deficit. The country is a major producer of metals, and the plunge in commodity prices this year has not helped. The rand hit 15.2724 to the dollar.
- And then, New Zealand cut interest rates, sending the kiwi soaring. The Reserve Bank of New Zealand cut the official cash rate by 25 basis points to 2.5%, amid falling dairy prices, plunging oil prices, a strong currency, and tepid inflation. The currency pair moved to as high as 0.6758.
- Hedge fund billionaire Jim Chanos would have you not buy healthcare stocks next year. In Fortune’s latest Investor Roundtable, Chanos advised readers to avoid the sector, because people would begin to focus on the negative aspects of the Affordable Care Act, or, Obamacare. “I think the days of real easy unit and pricing growth in health care may be behind us, and those are very elevated prices right now,” he also said of the sector, as the US Senate investigates drug-price gouging.
- Crude oil prices slipped after the Energy Information Administration said US crude inventories fell for the first time in 10 weeks. Stockpiles fell by 3.6 million barrels, versus the build by 1.7 million that analysts had expected according to Investing.com.