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Financial Stocks

May 16, 2011, 6:01 p.m. EDT

NYSE slumps 13%; financials end mainly lower

By Greg Morcroft, MarketWatch

NEW YORK (MarketWatch) — Shares of NYSE Euronext Inc. closed nearly 13% lower Monday after rivals Nasdaq OMX Group Inc. and IntercontinentalExchange Inc. pulled their bid for the New York institution when the government threatened a lawsuit.

NYSE Euronext (IPO:NYX)  shares dropped 12.6% to close at $35.73, compared to the roughly $37.60 on offer from Deutsche Boerse. Each NYSE share could be swapped for 0.47 shares of Deutsche Boerse (FRA:DE:DB1) under terms of their merger pact.

U.S.-traded shares of Deutsche Boerse (OTC:DBOEY)  climbed 3.3% on the end of the bidding war.

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Nasdaq (NAS:NDAQ)  shares fell 2.5%, while ICE (NYS:ICE)  shares rose 3.3%.

(OTC:DBOEY) Nasdaq and ICE Monday said they withdrew their joint bid for rival NYSE Euronext Inc. citing regulatory hurdles. In a separate announcement, the Justice Department said Monday that it was set to file an antitrust lawsuit if the firms went ahead with their bid.

Nasdaq CEO Bob Greifeld said in a news release that, “We took the decision to withdraw our offer when it became clear that we would not be successful in securing regulatory approval for our proposal despite offering a variety of substantial remedies.”

For its part, Deutsche Boerse said in a news release Monday that, “We take notice of the decision by Nasdaq and ICE to abandon their hostile bid attempt for NYSE Euronext. Deutsche Boerse will continue with its merger with NYSE Euronext as planned.”

They said they expect to close the deal by the end of this year.

In the broader financial sector, the Financial Select Sector SPDR ETF (PSE:XLF)  , which tracks the financial stocks in the S&P 500 Index (S&P:SPX)  , fell 0.1%.

Among the financial stocks in the Dow Jones Industrial Average (DOW:DJIA)  , American Express Co. (NYS:AXP)  rose 1.2% and Travelers Cos. (NYS:TRV)  added 1% while Bank of America Corp. (NYS:BAC)  and J.P. Morgan Chase & Co. (NYS:JPM) each lost 0.6%.

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