U.S. Indexes in Negative Territory Following Korean Clash; Investors Shrug Off Upwardly Revised Q3 GDP Figures


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Stocks are broadly lower at mid-day as concerns continue for another day over Europe's debt situation and a government insider trading investigation, while hostile fire between North and South Korea added to global economic jitters. A weaker-than-expected report on existing home sales also soured moods.

The National Association of Realtors said sales of previously owned houses dropped 2.2% in October. Sales are at a seasonally adjusted rate of 4.43 million units. Economists had expected a rate of 4.5 million.

The altercation between North and South Korea was one of the more dramatic clashes between the two nations since the end of the Korean War. Rising tensions between the two countries come at a time when power is shifting hands in communist North Korea.

There was some upside support from the Commerce Department's revision of Q3 GDP growth, showing slightly better-than-expected economic performance. The U.S. economy expanded at a 2.5% annual rate, faster than the 2.0% rate estimated a month ago. Economists were predicting a rise to about 2.4%, according to MarketWatch. The core personal consumption expenditure price index rose 0.8%, unrevised from initial estimates.

Also, merger and acquisition deals continued unabated as the Thanksgiving holiday nears. Two deals topped M&A news for the day.

First, News. Corp. ( NWS ) shares are down following a report the media giant will acquire 90% of Wireless Generation, a education technology provider, for $360 million in cash. Wireless Generation will become a subsidiary of News Corp. and will be managed by founder and CEO Larry Berger, President and COO Josh Reibel and Executive Vice President and Chief Product Officer Laurence Holt. They will retain a 10% interest in the company.

Meanwhile, J. Crew Group Inc. ( JCG ) said today that private equity firm TPG Capital and Leonard Green & Partners will buy the clothing retailer for roughly $3 billion or $43.50 a share, a 16% premium over J. Crew's closing price of $37.65 on Monday. Chief Executive Mickey Drexler also will stay on and maintain a "significant equity investment" in the New York-based company. The deal also includes a "go-shop" provision where J. Crew can solicit higher offers through Jan. 15 beyond the holiday season.

Elsewhere in individual stocks, shares of Hologic ( HOLX ) are higher after Reuters reported that it received an approval letter from the U.S. Food and Drug Administration for its 3D mammography system, which brings it closer to getting final approval. Final FDA approval will come after a satisfactory review and inspection of its manufacturing facility.

ADRs of Bank of Ireland ( IRE ) are plunging for the second day in a row on concerns that shareholders will be diluted as a result of any government bailout of the firm, Bloomberg reported. The decline follows news from late Sunday that Ireland had applied for aid from the European Union. The move was welcomed by EU officials and the International Monetary Fund, which said they are ready to provide support. However, the size and exact look of the bailout remained unclear, with the details due in coming days, news outlets report.

Pfizer Inc. ( PFE ) is higher after saying late yesterday it was extending its tender bid for shares of King Pharmaceuticals, Inc. (KG) for $14.25 a share.

Shares of Goldman Sachs (GS) are trending lower at mid-day as uncertainty reigned about a government probe into alleged insider trading. Today's declines comes on top of yesterday's drop which itself was stoked by a weekend report investigators are looking at possible insider trading allegations tied to the firm's dealings in transactions including health-care mergers.

Exxon Mobil (XOM) shares are lower following a Bloomberg report that the oil major will build a diesel hydrotreater at its Singapore refining facility and increase its output of low-sulfur supplies. Exxon will reportedly boost its output by the equivalent of 2% of China's demand for the fuel.

Johnson & Johnson (JNJ) shares are lower after a report from the company that cited manufacturing "insufficiencies" and recalled 4 million packages of Children's Benadryl and approximately 800,000 bottles of junior-strength Motrin caplets.

In earnings news:

--Shares of Brocade (BRCD) are down sharply after the company announced first quarter sales and earnings forecasts that missed the Street. The company reported Q4 revenue of $550 million, better than the analyst consensus for $537 million on Thomson Reuters. EPS was $0.14, a penny better than the Street.

--Hewlett-Packard (HPQ) shares are higher after Q4 earnings and revenue topped the Street, and it raised its 2011 guidance. The report was the first for Leo Apotheker as HP's CEO. Apotheker reportedly said he plans to increase R&D spending while also keeping an eye on costs overall.

--Pacific Sunwear (PSUN) reported a Q3 loss of $0.07 per share, vs. Street's call for a loss of $0.10 per share. Sales were $258 million, vs. the analyst consensus of $251 million on Thomson Reuters.

Commodities are mixed. December gold contracts are up $16, or 1.18%, to $1,374 an ounce while January crude contacts are down 1.03%, or $0.84, at $80.91 a barrel.

In energy ETFs, the United States Oil Fund (USO) is down 0.71% to $34.80 and the United States Natural Gas fund (UNG) is down 0.82% to $6.03

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.52% to $134.18. Market Vectors Gold Miners (GDX) is down 0.78% to $59.56. iShares Silver Trust (SLV) is down 1.21% to $26.84.

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

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This article appears in: Investing , Commodities
More Headlines for: HOLX , IRE , JCG , NWS , PFE

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