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
First, News. Corp. (
) 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. (
) 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
Elsewhere in individual stocks, shares of Hologic (
) 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 (
) 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. (
) is higher after saying late yesterday it was extending its tender
bid for shares of King Pharmaceuticals, Inc. (KG) for $14.25 a
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
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.
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