Debt Issues Snag PHH Takeout

Editor's Note: In this feature from Stockpickr, we highlight lists of stocks that have been upgraded by analysts or are experiencing activist situations or some other market moving events.

Rumors of the Day: Shares of PHH(PHH Quote) -- a company that provides mortgage and vehicle fleet management services -- sunk on news its merger with General Electric(GE Quote) hit a snag. One of the conditions of the merger calls for Blackstone Group(BX Quote) affiliate Pearl Acquisition to buy the attendant mortgage business from GE, but due to debt financing issues Pearl is "not optimistic" that it will ultimately succeed in obtaining the necessary funding. PHH shares plunged $4.57 or 16% at $23.93.

Business Objects(BOBJ Quote) surged after Le Figaro reported over the weekend that the business-software company hired Goldman Sachs to explore a sale. The French newspaper report said there are five potential bidders for Business Objects, with SAP(SAP Quote) seen as the most likely acquirer. Business Objects increased $2.62, or 6%, to $45 in recent trading.

Today's Hot List: ITT(ITT Quote) has inked a deal to acquire EDO(EDO Quote) by purchasing all outstanding shares for $56 each in cash. The deal, including about $120 million of net debt and the anticipated conversion of convertible notes, values EDO at $1.7 billion. ITT shares were down 76 cents, or 1.2%, at $63.53 while EDO surged $3.39, or 6.6%, to $54.90.

Monsanto(MON Quote) raised its full-year earnings outlook to $2 a share before one-time items. The company's most recent earnings-per-share projection called for $1.75 to $1.80. Shares gained 2.8% to $75.54.

Analyst Downgrades: Morgan Stanley downgraded Marsh & McLennan(MMC Quote) from equal weight to underweight and lowered its 2008 EPS estimates. The stock dropped $1.49, or 5.7%, to $24.69.