Diamonds and Dogs

6/1/12

Stock Market

Today, the dog is the entire market, as every index dropped significantly. Dow closed down 274.88, S&P 500 down 32.29, and the Nasdaq down 79.86. The Dow erased all of its gains for this year after this dismal day. The cause of the drop comes from a very poor jobs report. The report showed only 69,000 jobs were added to payrolls, less than half the 150,000 jobs forecasted by economists. Marc Chandler, global head of currency strategy at Brown Brothers Harriman said, "The U.S. employment report was simply terrible." The poor market performance scared many investors into safety of US government debt, driving down the yield on the 10-year Treasury note below 1.5%. Another reason for investors fleeing to the sidelines or into securities that are deemed safer is the uncertainty in Europe. Fears of Europe's escalating debt crisis have been building and were heightened more from a report that showed the Eurozone unemployment rate at a record high of 11%. Most markets around the world were down today, such as the Hang Seng down 71.18, Nikkei 225 down 102.48, DAX down 214.09, CAC 40 down 66.54, and the Bovespa down 953.13. "We've got concerns about Europe, China, India, the United States -- this is a global problem," said Joe Saluzzi, co-head of equity trading at Themis Trading. Overall it was a horrible day for all markets.

Beacon Federal Bancorp Inc. (BFED)

Beacon Federal is a diamond today, up 44.59% at $19.23. Beacon Federal saw its stock jump nearly $6.00 after Berkshire Hills Bancorp released a deal to acquire the company for $132 million in cash and stock. Under the agreement, 50% of the outstanding Beacon shares will be exchanged for Berkshire shares at a fixed exchange ratio of 0.92 shares for each Beacon share, while the remaining 50% of Beacon shares will be exchanged for cash in the amount of $20.50 per share. The transaction is valued at $20.35 per Beacon share. Michael P. Daly, Berkshire's President and Chief Executive Officer, stated, "We are very pleased to extend our presence in Central New York in this partnership with Beacon." Daly also went on to say, "This merger will bring our total Central and Eastern New York branch count to 26 offices, with total deposits exceeding $1.4 billion." Beacon Federal had a phenomenal day especially amidst the horrible day in the market; it's amazing to see any stocks rallying against a hard down day.

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