Stocks Holding Modest Gains as Investors Eye Fed Meeting Minutes

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Stocks are moderately higher in mid-day trading even as new data shows that growth in the services sector stalled in March. Deal news--including a large acquisition in the semiconductor sector--provided a modicum of support as investors awaited the most recent minutes from the Federal Reserve's interest-rate setting Federal Open Market Committee due at 2 p.m. ET.

The Institute for Supply Management's services-sector index for March fell to 57.3 from 59.7 in February, below analysts' estimate for a reading of 59.

Separately, House Republicans unveiled their plan to cut government spending by $6.2 trillion over the next decade, which is causing an uproar among Democrats and also renewing concerns about a possible double-dip recession.

In company news:

National Semiconductor ( NSM ) hit a 52-week high after it said late Monday that Texas Instruments ( TXN ) will buy the company for $25 per share in an all-cash transaction of about $6.5 billion. Separately, NSM received upgrades this morning from Susquehanna, RBC Capital and Citigroup.

Boston Scientific has filed an application with the Food and Drug Administration for its "Promus Element" heart stent, which the company hopes to introduce in the U.S. in mid-2012, a company official said late Monday, according to Dow Jones Newswires.

Diamond Foods, Inc. ( DMND ) and The Procter & Gamble Company ( PG ) today announced the signing of a definitive agreement to merge the Pringles business into Diamond Foods in a transaction valued at $2.35 billion. Diamond expects the acquisition to be accretive. It guides for FY 2012 EPS at $2.85 to $2.98 and $3.00 to $3.10 before costs. The Street is at $2.52.

Dutch financial services company ING Groep NV ( ING ) has given up its resistance to the forced sale of its ING Direct operations in the U.S., Dow Jones reports, citing Dutch daily Financieele Dagblad. The Dutch report quotes unnamed sources familiar with the talks. The European Commission ordered ING to nearly halve its balance sheet by selling its global insurance arm and some smaller banking assets, including its direct banking business in the U.S., as a condition for receiving state funds during the financial crisis.

Nasdaq OMX Group Inc. (NDAQ), the Nasdaq exchange operator, said Tuesday it would rebalance the Nasdaq 100 effective May 2. The Wall Street Journal reported that the rebalancing was driven partly by the rise in Apple (AAPL) shares, which have more than quadrupled in two years. The rebalancing will reduce the tech giant's weighting in the index, which is currently more than 20%.

US Airways (LCC) today reported that traffic in March saw an increase of 3.9%, attributing the growth to a sharp uptick in trans-Atlantic flights.

In earnings news:

--KB Home (KBH) says Q1 sales were $196.9 million, below the Thomson Reuters mean for $223.56 million. Net loss was $1.49 per diluted share, for the three months ended February 28, 2011, including an after-tax charge of $45.1 million to record a valuation allowance against the net deferred tax assets generated from the loss in the period. That is wider than the $0.71 per share net loss a year ago.

Commodities are higher as June gold contracts are up $16, or 1.12%, to $1,449 an ounce while May crude oil contacts are up 0.01%, or $0.01, at $108.45 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 0.23% to $43.36 and the United States Natural Gas fund (UNG) is down $0.05, or 0.4%, to $11.17.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.97% to $141.21. Market Vectors Gold Miners (GDX) is up 2.38% to $61.17. iShares Silver Trust (SLV) is up 1.04% to $37.96.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: DMND , ING , NSM , PG , TXN

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