Stocks reversed early losses and are solidly higher at mid-day
as deal news trumps a weak durable goods report that showed orders
dragging. Also, crude oil inventories rose by over half a million
barrels last week, but crude is back above $100 a barrel.
New orders for durable manufactured goods posted their largest
decline in six months in April, led by falling aircraft and motor
vehicle sales, according to the government report.
Also, crude oil inventories rose by 600,000 barrels to 370.90
million barrels last week, and remain above the upper limit of the
average range for this time of year, according to the federal
Energy Information Administration, which tracks the market.
The figure contrasted with The American Petroleum Institute,
which said yesterday that U.S. crude supplies were expected to fall
by 860,000 barrels, while it reported that gasoline inventories
jumped by 2.4 million barrels, nearly triple what analysts had
expected, as drivers cut back in the face of high pump prices. The
EIA said gasoline inventories rose by 3.8 million barrels last
week, after increasing by 100,000 barrels the prior week.
In company news:
Watson Pharmaceuticals (
) has acquired Specifar Pharmaceuticals, a privately held
multinational generic drug developer, manufacturer and marketer,
for EUR 400 million ($562 million) in cash and certain contingent
California Pizza Kitchen (
) is sharply higher on news that Golden Gate Capital will acquire
the company for $18.50 per share in cash, or $470 million. The
transaction is currently expected to close in Q3.
Shares of Bayer AG (
) are seeing pressure while Reuters reports that the German
pharmaceutical company's blood clot prevention drug rivaroxaban is
highly effective in the prevention of recurrent strokes, according
to study results. Such drugs have become one of the biggest areas
in cardiology, the report said.
Shares of Google (GOOG) are higher on expectations taht the
Internet search giant will unveil its platform for mobile payment,
The Wall Street Journal reported, citing people familiar with the
matter. Google will disclose information about how consumers will
make store purchases by waving smartphones in front of a checkout
counter reader. The program is slated to be launched in New York
and San Francisco first, the report said.
Martha Stewart Living Omnimedia (
) has jumped out of the gate by nearly 20% on an announcement that
the company has hired Blackstone Advisory Partners to explore
options that could possibly lead to the sale of the company.
Blackstone will reportedly explore opportunities for investment in
Martha Stewart or a partnership arrangement. Speculation drove the
stock to an early high of $4.68 before easing to trade at $4.47, up
$0.70, or 18.57%.
In other earnings news:
) says Q2 EPS were $0.40, meeting estimates. Sales were $2 billion,
more than the Thomson Reuters mean for $1.8163 billion. It now sees
FY EPS between $1.67 to $1.73 from $1.62 to $1.68. Forecasts are
for $1.70. The stock, however, is off 6% at mid-day.
--Costco Wholesale Corp. (COST) reports Q3 EPS of $0.73,
including a $0.07 LIFO charge, compared to $0.68 a year earlier and
topping the Street's ex-items view for $0.77. Quarterly revenue
generated by the warehouse-club retailer reached $20.62 billion
from the prior year's $17.78 billion.
--Applied Materials (AMAT) is off 2.2% this morning, continuing
its evening drop that followed earnings news. The company beat but
guides for adjusted Q3 EPS in a range of $0.31 to $0.37. The Street
was at the top end of that range. July crude futures are down 23
cents to $99.36 a barrel in electronic trading on the Globex
market, while July silver rose $1.11 to $37.24 an ounce.
Commodities are higher. June gold contracts are up 0.51%, to
$1,531 an ounce while July crude oil contacts are up 1.39% to
$100.97 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 1.4% to
$39.83 and the United States Natural Gas fund (UNG) is up 1.12%, to
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.36% at
$149.08. Market Vectors Gold Miners (GDX) is up 1.13% to $57.25.
iShares Silver Trust (SLV) is up 2.99% to $36.84.
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