Dismal month for markets mercifully comes to an end

NEW YORK – With a disappointing finish Thursday, the stock market closed what was by some measures its worst month in two years. Over five dismal weeks, Facebook fizzled, a debt crisis in Europe loomed, and nobody was in the mood to buy.

When May was mercifully over, the Dow Jones industrial average and other major indexes had erased most of the strong gains they built up through March and held on to in April.

“The sentiment has changed,” said Craig Callahan, co-founder and president of ICON Advisers in Denver. “Any time the market dips like this, it erodes some confidence. It scares people out of the market. All of the above, May has done that.”

The Dow lost 820 points for the month, its worst showing since May 2010. That month, investors were spooked by a one-day “flash crash” in stocks when a large trade overwhelmed computer servers.

This May, stocks limped to the finish. The Dow closed down 26.41 points on Thursday to end the month at 12,393.45. It declined on all but five of 22 trading sessions in May.

The Standard & Poor’s 500 index dropped 2.99 points to close at 1,310.33. It fell 6.3 percent in May, its worst month since September. The Nasdaq composite index fell 10.02 points to 2,827.34, and had its worst month in two years.

Georgia company set to buy Auburn’s Lepage Bakeries

THOMASVILLE, Ga. – Flowers Foods Inc., which makes Nature’s Own bread, Tastykake treats and other baked goods, has agreed to buy Lepage Bakeries Inc. for $370 million in cash and stock, expanding its presence in New England and New York.

Lepage’s regional brands include Country Kitchen and Barowsky’s, along with a broader variety of breads, buns and rolls. Lepage is based in Auburn, Maine, and the deal includes two bakeries in Lewiston, Maine, Flowers Foods said.

Flowers Foods, based in Thomasville, Ga., said it expects the acquisition to boost its fiscal 2012 earnings per share by between 3 cents and 5 cents, excluding acquisition costs, and fiscal year 2013 earnings by 8 to 12 cents per share.

Under the terms of the deal, Flowers will pay $300 million in cash and $50 million in stock for Lepage. The agreement also calls for a total of $20 million in deferred cash payments that begin on the deal’s fourth anniversary, Flowers said.

Euro group needs changes to survive, ECB chief says

FRANKFURT, Germany – The setup of the 17-country euro currency union is unsustainable, the head of the European Central Bank has told EU leaders, warning they must quickly come up with a broad vision for the future to get the bloc through the current financial crisis.

Mario Draghi said Thursday that the crisis had exposed the inadequacy of the financial and economic framework set up for the euro monetary union launched in 1999.

Draghi said the central bank had done what it could to fight the two-year-old debt crisis by reducing interest rates and giving (euro) 1 trillion ($1.2 trillion) in emergency loans to banks. But it was now up to governments to chart a course by reducing deficits, carrying out sweeping reforms to spur growth and strengthening the euro’s basic institutions.

— From news service reports

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