Stocks traded near the flat line at mid-day as mixed economic
data released before and after the opening bell squelched investor
optimism ahead of the long holiday weekend. Still, deal news served
to provide some support to stocks through the first half of
This morning, the Commerce Department said new-home sales rose
to a seasonally-adjusted annual rate of 290,000, from a downwardly
revised 275,000 in October. The sales level missed the
MarketWatch-compiled economist estimate of 295,000, and the initial
government report said October sales were 283,000.
Also, a key gauge of U.S. consumer sentiment rose to 74.5 in
late December from 71.6 in November, matching expectations,
according to the Reuters/University of Michigan index.
Initial jobless benefits applications fell 3,000 to 420,000 in
the latest period, about in line with Wall Street expectations. The
less-volatile four-week average of claism rose 2,500 to 426,000.
The number of people who continued to receive benefits fell 103,000
to a seasonally adjusted 4.06 million.
Meanwhile, orders for U.S.-made durable goods fell by a
stronger-than-expected 1.3% in November. But some positive details
emerged in the report. Excluding transportation, new orders rose
2.4%. And, core durable-goods orders, which are orders for capital
goods excluding defense and aircraft, rose 2.6% in November after a
3.6% decline in October.
Lastly, personal incomes rose 0.3% in November, compared with
0.2% expected by economists. Spending gained 0.4%, while Wall
Street had expected a gain of 0.5%. The report offers one of the
most closely watched inflation measures. The core personal
consumption expenditure price index excludes food and energy. This
core gauge of inflation rose 0.1% in November, as expected by
In the latest corporate news:
Shares of Sonic Solutions (
) are off session highs but still holding sharp gains after it and
Rovi Corporation (
) announced that the two companies have signed a definitive
agreement for Rovi to acquire Sonic in a stock and cash
transaction. The enterprise value of the transaction is
approximately $720 million and the per share value of Sonic common
stock at signing of the agreement is $14.17.
Gilead Sciences (
) is off just under 1% at mid-day, after the company said it is
scrapping Phase III trials of its prospective treatment for
pulmonary fibrosis. Gilead last night said it was pulling the plug
on ambrisentan, citing a lack of efficacy. The decision follows
Monday's $225 million acquisition of Arresto Biosciences and
AB0024, its lead drug candidate now in Phase I trials for patients
with pulmonary fibrosis. A Gilead spokesman told Bloomberg there
was no connection between the events.
Allied Irish Banks (
) is down 16%, as the Irish government seeks approval of a euro3.7
billion cash injection into the bank. The infusion of cash would
leave the government with a more than 90% stake in the bank,
according to the Irish Times.
Also in Ireland, ADRs of the Bank of Ireland (
) are sharply lower in the regular session--extending pre-market
losses--as the Irish government said it would inject state funds
into the bank if it cannot raise capital from private sources,
Verigy (VRGY) shares are up 7.5%, but off a new 52-week high of
$13.75 set earlier, after the company said it received a revised
proposal from Advantest Corporation (ATE) for $15 per share in
cash. That would value the maker of testing equipment for
semiconductor manufacturers at $900 million, accord to a Bloomberg
report on the matter.
Abbott Laboratories (ABT) is down fractionally returning to the
red after a brief positive turn earlier, while AstraZeneca plc
(AZN) continues to hold fractional gains, after the companies
announced they are discontinuing efforts to develop Certriad. The
investigational compound sought to combine the active ingredients
from AZN's Crestor and ABT's Trilipix to treat abnormal levels of
two or more lipids in the blood. The firms said there will no
financial impact to their 2010 or 2011 earnings. They did, however,
at one time expected $500 million in U.S. sales each year had
Certriad gained the necessary approvals.
General Motors Co. (GM) has shed an opening bell loss and is in
positive territory despite announcing a recall of about 100,000
vehicles to fix a rear axle problem, which could inadvertently
lock, and the passenger-side airbag, which is susceptible to
malfunction. The airbag recall applies to almost 96,000 Cadillac
CTS models built between 2005 and 2007. About 1,300 new Cadillac
Escalade, Chevrolet Avalanche 1500, Silverado 1500 and GMC Sierra
1500 vehicles may have the axle problem.
Shares of Teva Pharmaceuticals (TEVA) is spiking at mid-day up
3% and erasing an early loss following a report before the bell
that a copy of the generic drug maker's best-selling multiple
sclerosis drug, Copaxone, could win approval from U.S health
regulators as soon as next month, reports Bloomberg, citing
comments from a Bank of America Merrill Lynch analyst.
Constellation Brands (STZ) shares are higher in regular-session
trading following news that it will sell 80% of its Australian and
UK wine units to Champ Private Equity--an Australian-based
firm--for $230 million, the company said in a statement.
Micron Technology (MU) shares are off session lows but still in
firmly negative territory after the company reported first quarter
results that missed the Street's estimates.
Exxon Mobil (XOM) shares are holding gains despite an earlier
report that the oil major's schedule to restart a fluid catalytic
cracking unit in Louisiana--which it shut down on Dec. 18--is
"undetermined" according to a Bloomberg report. Still, an Exxon
spokesman reportedly said that "at this time the refinery is
operational and all customer needs are being met."
Jo-Ann Stores Inc. (JAS) is up near 33% in early trading,
matching the premium on a $1.6 billion buyout from affiliates of
private-equity firm Leonard Green & Partners. The $61-a-share
offer was a 34% premium to yesterday's closing price.
Commodities are mixed. February gold contracts are down $9, or
0.63%, to $1,379 an ounce while February crude oil contacts are up
1.09%, or $0.99, at $91.47 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 0.91% to
$38.99 and the United States Natural Gas fund (UNG) is down 0.18%
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 0.39%
to $134.52. Market Vectors Gold Miners (GDX) is up 1.15% to $60.12.
iShares Silver Trust (SLV) is up 0.11% to $28.60.
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