M&A news and drug trial updates provided some of the catalysts behind the most actively traded stocks on Monday.
Shares of Williams rose more than 7% on heavy trading volume after the natural gas producer said it will sell almost all of its power trading business to investment bank Bear Stearns for $512 million, the companies said on Monday. The deal also removes $2.4 billion in imputed debt for Williams, the company said.
"This morning's move to completely exit its power business in a neutral manner is a fundamental positive for the company," said Credit Suisse analyst Carl Kirst. "The move should reduce the business complexity of the company, potentially return the company to investment grade, remove the vast majority of the earnings volatility and provide sharper focus on the three core businesses."
Shares of Irish drugmaker Elan jumped more than 12% on Monday after the company and developmental partner Wyeth said they will begin Phase III trials of an experimental Alzheimer's treatment. The trial is expected to start in the second half of 2008, the companies said. Wyeth shares rose 3%.
Citigroup analyst Andrew Swanson said the decision to start late-stage trials is a "big head start" for Elan and Wyeth. "If the product continues to clear its clinical development hurdles, it could be on the market by 2009, giving Elan and Wyeth a multi-year head start on most other prominent Alzheimer's therapies in development and making bapineuzumab an almost certain blockbuster," Swanson wrote in a client report.
Alltel said it will be acquired by two investment firms for almost $25 billion, sparking gains in shares of the fifth largest U.S. wireless services provider. TPG Capital, formerly Texas Pacific Group, and GS Capital Partners, a unit of Goldman Sachs , will purchase Alltel for $24.8 billion and have agreed to take on $2.7 billion in debt.
Among downside movers, GlaxoSmithKline shares fell wider than 5% after a study of the British drug giant's diabetes drug Avandia showed an increased risk of heart attacks in patients. An analysis conducted by the Cleveland Clinic of 42 clinical drug trials revealed a 43% increase in heart attack risks.
The company sent a statement to CNBC's Mike Huckman saying it "strongly disagrees" with the report, to be published in the upcoming issue of the New England Journal of Medicine.