Dow Chemical, Rohm & Haas Hit Hard

Updated from 2:09 p.m. EST

Shares of Dow Chemical (DOW Quote) slumped Monday after Kuwait's government called off a $17.4 billion joint venture with the Michigan-based petrochemicals company.

Dow closed down 19% at $15.32, a new 52-week low.

Investors in Rohm & Haas (ROH Quote) were also concerned, sending the company's shares down 16%. Dow set plans in July to acquire Rohm & Haas in a nearly $19 billion deal. For its part, Rohm & Haas said the successful completion of Dow's joint venture in Kuwait was not required to close the merger of the two.

Shareholders of Rohm & Haas approved the agreement in October. Rohm & Haas said it "continues to work diligently" toward completing the transaction with Dow in early 2009.

Following the news, Dow was downgraded from overweight to equal-weight at Barclays Capital.