Stocks are higher at mid-day as better-than-expected economic
data out of China and Europe trumped disappointing housing data in
the U.S. The major indexes are firm, with all three major indexes
up near, or exceeding, 2% gains. Optimism over possible new
stimulus from the Federal Reserve is also providing lift.
Fewer people purchased new homes in July, according to new data
from the U.S. Commerce Department. It was the fourth straight month
of declines and puts sales on track to finish the year as the worst
on record, the Associated Press reported. Sales of new homes fell
1% in July to a seasonally adjusted annual rate of 298,000, the
Commerce Department said. That is less than half the 700,000 figure
economists say indicate a healthy market.
Homebuilder stocks fell after the report. Among them: KBH:
-3.9%, PHM: -2.7%, TOL: +0.5%, SPF: -0.5%, DHI: +0.4%.
Also, investors are eying Federal Reserve chief Ben Bernanke,
who will speak later this week from the central bank's annual
retreat in Jackson Hole, Wyo. Some market buzz is centered on the
possible announcement of a third round of quantitative easing
In global economic news, HSBC's preliminary purchasing managers
index for China's manufacturing sector rose to 49.8 in August from
49.3 in July. While a reading of less than 50 signals activity in
the sector continued to contract, there had been expectations for
an even weaker reading.
In Europe, the data was mixed, but packed few surprises. PMI
readings for the euro zone signaled that manufacturing activity in
the 17-nation region contracted slightly in August, while overall
activity continued to grow at a slow pace. An unchanged composite
PMI reading of 51.1 for August topped forecasts for a slide to
50.3, helping buoy sentiment, analysts said.
In company news:
Shares of H&R Block (
) are higher after the accounting firm said it plans to sell RSM
McGladrey to McGladrey & Pullen, LLP for approximately $610
million, of which approximately $65 million will be financed by
HRB. HRB will record a non-cash, after-tax charge of approximately
$53 million, or $0.17 per share in the fiscal Q1 ended July 31.
Shares of PharMerica (
) are surging after the company received a buyout offer from
) of $441 million, or $15 per share, cash, Reuters reports.
Including PMC's net debt, the transaction will be worth about $716
Seven Arts Pictures (
) says it will buy all of the capital stock of Big Jake Music for
$5 million of convertible preferred stock, convertible into common
stock at a premium to the market price at closing, and which is not
subject to conversion for agreed periods of time.
Deven Sharma will step down as president of credit-rating agency
Standard & Poor's and will be replaced by Douglas Peterson.
Sharma will step down from his role as president on Sept. 12 and
will leave the firm at the end of the year, McGraw-Hill Cos. (
) said in a statement. Peterson is currently chief operating
officer of Citigroup's (C) Citibank unit. Sharma's exit comes just
weeks after S&P downgraded its U.S. government debt rating to
AA+ from AAA, a move that has faced much scrutiny. The agency is
also facing questions surrounding its role in maintaining mortgage
ratings ahead of the 2008 credit crisis.
ADRs of Sanofi (SNY) are higher after Reuters reported that a
unit of the drug maker is close to buying the over-the-counter
business of Universal Medicare for about $109.5 million. The report
cited two sources with knowledge of the matter. The deal involves
30 brands sold by Universal Medicare.
Shares of Research in Motion (RIMM) are higher after the cell
phone maker unveiled three models of its BlackBerry Curve, which
will feature its new BlackBerry 7 operating system. Research in
Motion, which unveiled high-end models that were updated with the
new software three weeks ago, did not announce any carrier
partners, the Associated Press noted in a report on the matter.
ADRs of Royal Dutch Shell (RDS.A) are higher after Bloomberg
reported that Europe's largest oil company is among energy
producers that have discussed a partnership to fund exploration of
Papua New Guinea with Oil Search Ltd., that country's largest oil
and gas producer. Oil Search may be able to sign an agreement with
a partner next year, the report says.
In earnings news:
--Corinthian Colleges (COCO) says Q4 sales were $425.2 million,
compared with the Thomson Reuters mean for $427.59 million. EPS,
less items, were $0.13, above estimates for $0.11. Q1 sales are
seen between $414 million and $424 million with EPS between a loss
of $0.04 and a loss of $0.02. FY12 EPS are seen between $0.30 and
Commodities are mixed. December gold contracts are down 1.01% to
$1,872 an ounce while October crude oil contacts are up 0.98% to
$85.25 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 1.79% to
$33.32 and the United States Natural Gas fund (UNG) is up 2.11%, to
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 1.58%
to $181.46. Market Vectors Gold Miners (GDX) is down 2.12% to
$62.35. iShares Silver Trust (SLV) is down 2.16% to $41.71.
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