Closing Update: Stocks Recover But Gains Tempered by Looming Fed, Geopolitical Pressures
Stocks made a comeback Monday afternoon after investors looked past weak housing data, and reflected instead on M&A activity and expectations for improved Q2 growth, consumer confidence, and U.S. job market data due out later this week. After a knee-jerk reaction lower following an unexpected drop in pending home sales, equities moved steadily higher throughout the day and eventually moved into positive territory. But gains were modest and the Dow Jones Industrial Average resisted 17,000. Sentiment remains cautious due to continued geopolitical pressures and Wednesday's looming Federal Open Market Committee meeting.
On the economic front, pending home sales dove 1.1% in June, missing estimates for a 0.5% gain. This is the first decline in this indicator in four months and the largest drop in seven months.
Along with home sales, the Markit purchasing managers index remained unchanged from June at 61.0, but was slightly above the consensus estimate of 59.8. The Dallas Federal Reserve found that manufacturing activity in the southwest region improved with their business activity index rising to 12.7 in July from 11.4 the month prior.
In M&A news, Dollar Tree ( DLTR ) made a $9.2 billion offer for Family Dollar ( FDO ) giving Dollar Tree 13,000 more stores and moving it into the number one spot among discount retailers. While shares of both DLTR and FDO closed higher, competitors Dollar General ( DG ) and Walmart ( WMT ) both closed the day in the red.
Also, real-estate information provider Zillow ( Z ) offered $3.5 billion for Trulia (TRLA), the two largest names among real-estate websites with a combined market share of roughly 25%.
Tuesday's economic data includes the May Case-Shiller home price index (exp +0.4%) and July's consumer confidence (exp 85.5 from 85.2 in June). Headline earnings include Twitter ( TWTR ), Pfizer (PFE), Merck (MRK) and Marriott (MAR).
Here's where the markets stand at the close:
Dow Jones Industrial Index was up 22 points (+0.1%) at 16,982
S&P 500 was up 0.5 point (+0.03%) at 1,978
Nasdaq Composite Index was down 4 points (-0.1%) at 4,444
FTSE 100 was down 0.05%
Nikkei 225 was up 0.46%
Hang Seng Index was up 0.88%
Shanghai China Composite Index was up 2.41%
(+) FDO Offer to buy for $9.2 billion from Dollar Tree ( DLTR )
(+) TRLA Offered $3.5 billion from Zillow ( Z )
(+) CCCR Loan default recoveries, Q2 guidance update
(+) LOCO Continues to advance after Friday's $15 IPO
(-) ACRX FDA asks for more data on Zalviso, downgraded by Canaccord
(-) HZNP CVS Caremark (CVS) and Express Scripts (ESRX) have placed its DUEXIS and VIMOVO products on their exclusion lists
(-) SKYW Trims Q2 outlook to a loss on subpar revenue
(-) EDAP FDA panel meeting to review prostate cancer device