Nasdaq, ICE withdraw bid to buy NYSE

Nasdaq and IntercontinentalExchange withdrew their joint $11-billion bid for the parent of the New York Stock Exchange Monday after the Justice Department said it would try to block the deal.

"NYSE and Nasdaq are iconic . . . they are fierce competitors," said Christine Varney, assistant attorney general of the antitrust division of the Justice Department.

The decision by the two exchanges to back off clears an obstacle to NYSE Euronext Inc.'s previous $10-billion deal to combine with the German exchange operator Deutsche Boerse.

Shares of NYSE Euronext dropped $5.16, or 12.62 percent, to $35.73. Shares of Nasdaq OMX Group Inc. fell 68 cents to $26.23, while Atlanta-based IntercontinentalExchange Inc. (ICE) gained $3.90, or 3.30 percent, to $122.22.

Varney said all of the top 500 U.S. companies are listed on either the NYSE or Nasdaq and a merger would have substantially eliminated competition.

Though Nasdaq and NYSE are the two largest U.S. stock markets, both have been under pressure to find a merger partner because technology has driven down the cost of trading to almost nothing. -- AP