Financial Stocks: Financials gain; NYSE off as Nasdaq’s bid rejected

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By Greg Morcroft
, MarketWatch

NEW YORK (MarketWatch) — Shares of U.S. financial stocks rose Monday, taking a leading role in lifting the broader indexes, but the parent of the New York Stock Exchange fell as it rejected the higher of competing buyout bids, saying it wasn’t in shareholders’ long-term interests.

NYSE rejects Nasdaq-ICE bid

Why NYSE Euronext spurned a higher acquisition bid, valued at $11.3 billion, in favor of standing by agreement with Germany’s Deutsche Boerse.

The Financial Select Sector SPDR ETF
/quotes/comstock/13*!xlf/quotes/nls/xlf
(XLF
16.47,
+0.01,
+0.06%)


, which tracks the financial stocks in the SP 500, added 0.5%.

Among the four financial stocks in the Dow Jones Industrial Average, Bank of America Corp.
/quotes/comstock/13*!bac/quotes/nls/bac
(BAC
13.46,
-0.02,
-0.15%)


, J.P. Morgan Chase Co.
/quotes/comstock/13*!jpm/quotes/nls/jpm
(JPM
47.03,
+0.19,
+0.41%)


, American Express Co.
/quotes/comstock/13*!axp/quotes/nls/axp
(AXP
46.35,
+0.07,
+0.15%)


  and Travelers Cos.
/quotes/comstock/13*!trv/quotes/nls/trv
(TRV
60.61,
+1.03,
+1.73%)


 all rose.

But shares of NYSE Euronext
/quotes/comstock/13*!nyx/quotes/nls/nyx
(NYX
37.91,
-0.79,
-2.04%)


, which owns the venerable New York Stock Exchange and has operations in Europe, fell 0.6% after it formally rejected on Sunday an offer from Nasdaq OMX Group
/quotes/comstock/15*!ndaq/quotes/nls/ndaq
(NDAQ
28.04,
-0.41,
-1.43%)


 and IntercontinentalExchange Inc.
/quotes/comstock/13*!ice/quotes/nls/ice
(ICE
120.78,
+0.23,
+0.19%)


.

The board of NYSE Euronext rejected an unsolicited, $11.3 billion takeover offer from Nasdaq OMX Group Inc. and IntercontinentalExchange Inc., but analysts on Monday expressed the belief that the pursuit may press on via a hostile bid.

In spurning the latest counterbid Sunday, the owner of the New York Stock Exchange affirmed its commitment to a previously planned merger with Germany’s Deutsche Boerse AG.

“We believe this is an expected development for NDAQ ICE, and we doubt this will end their pursuit … which could continue as a hostile attempt,” analysts at Macquarie Securities told clients on Monday.

Rich Repetto, analyst with Sandler O’Neil Partners, held a similar view.

”Given the experience in unfriendly proposals that both ICE CEO Jeff Sprecher and Nasdaq CEO Bob Greifeld possess, we would be very surprised if the two CEOs led with their ‘first, best, and final offer,’ though the original offer was not increased (yet),” Repetto told clients. See latest on NYSE Euronext takeover battle and whether a further acquisition bid might be in the cards.

U.K. Banks were active on Monday, rising across the board after the government released proposals that said they should hold significantly more capital and take steps to “ring-fence” their retail banking units from riskier operations, but shouldn’t be forced to break themselves up.

Read Marketwatch coverage of proposed U.K. bank reforms.


/quotes/comstock/13*!xlf/quotes/nls/xlf

Financial Select Sector… (XLF)



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Bank of America Corp (BAC)



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JPMorgan Chase Co (JPM)



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47.03


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American Express Co (AXP)



$
46.35


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Travelers Companies Inc (TRV)



$
60.61


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NYSE Euronext Inc (NYX)



$
37.91


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-2.04%
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3.49m
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NASDAQ OMX Group Inc (NDAQ)



$
28.04


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1.23m
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/quotes/comstock/13*!ice/quotes/nls/ice

IntercontinentalExchange Inc (ICE)



$
120.78


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+0.23
+0.19%
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234,714
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Greg Morcroft is MarketWatch’s financial editor in New York.



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