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Mid-Day Update: Stocks Slips as Investors Watch Italy Developments; Small Business Optimism Grows

Posted
11/8/2011 12:17:00 PM
By: MT Newswires
Referenced Stocks:AMLN;DYN;HPQ;MS;MSSR

Stocks are down in mid-day trading as Greece slipped off center stage of Europe's debt drama and Italy became the focus of investor jitters. U.S. indexes erased much of their gains as the budget from Italian Prime Minister Silvio Berlusconi managed to win the approval of that country's parliament but without a majority. Italy's borrowing costs have surged in the last several days, making markets jittery about what European leaders will do to contain the debt crisis plaguing the eurozone.

In the U.S., the economic data calendar remained light, but there were positives with indicators showing job market improvement and increasing optimism among small businesses.

In U.S. economic data, optimism among small businesses is growing, according to a survey released by the National Federation of Independent Business. The index rose 1.3 points to 90.2 - which was slightly above the average of 89.1 since January, MarketWatch reported. Also, the U.S. Department of Labor reported that job openings rose to 3.35 million last month - the highest level since August of 2008 - from 3.13 million in August, also reported by MarketWatch.

However, investor attention focused on Italy where Prime Minister Berlusconi was unable to win an absolute majority for a routine ballot measure in parliament. The vote has increased calls for Berlusconi to resign as lawmakers there worry about Italy's ability to access capital markets over the next few days. Italy has a $2.6 trillion debt - the fourth largest in the world, Bloomberg notes. The yield for Italy's debt - 6.61% - is near the 7% market that forced Greece, Portugal and Ireland to get international bailouts, Bloomberg noted.

In mid-day company news:

Dynegy ( DYN ) is sharply higher after the company earlier announced that it has reached an agreement with a group of investors holding over $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of over $4.0 billion of obligations owed by DH. If the restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the company's consolidated balance sheet.

Shares of McCormick & Schmick's Seafood Restaurants, Inc. ( MSSR ) are surging after restaurant chain Landry's inked an agreement to acquire all of McCormick's stock for $8.75 a share. Landry's will acquire MSSR through an all-cash tender and merger.

Morgan Stanley ( MS ) is firm after it today announced that it has sold its 50% interest in SAESA Group, a Chilean electricity distribution, transmission and generation company, to Alberta Investment Management Corporation of Canada for an undisclosed amount.

Hewlett-Packard ( HPQ ) shares are down on reports it is looking to sell Palm's webOS mobile software platform. Reuters reports the deal could fetch hundreds of millions of dollars but less than the $1.2 billion that HP paid last year.

Shares of Amylin Pharmaceuticals ( AMLN ) were down by double-digit percentage points as Eli Lilly (LLY) announced an agreement to terminate the two companies' alliance for exenatide and resolve the outstanding litigation between the them.

Commodities are higher as December gold contracts are up 0.27% to $1,796 an ounce while December crude oil contacts are up 0.62% to $96.11 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 0.74% to $36.74 and the United States Natural Gas fund (UNG) is down 2.87%, to $8.47.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 1.57% to $173.52. Market Vectors Gold Miners (GDX) is up 2.01% to $62.57. iShares Silver Trust (SLV) is up 1.66% to $33.74.

Here's where markets stand at mid-day:

-NYSE down 19.89 (-0.27%) to 7,570.09

-DJIA down 33.08 (-0.29%) to 12,033.84

-S&P 500 down 1.40 (-0.11%) to 1,259.72

-Nasdaq down 2.30 (-0.29%) to 2,692.76

GLOBAL SENTIMENT

Nikkei down 1.0%.

Hang Seng even

Shanghai Composite down 0.24%.

DAX-30 up 1.4%

MID-DAY NYSE INDEX WATCH

NYSE Energy down 0.12% at 12,672.98

NYSE Financial down 0.26% at 4,182.59

NYSE Health Care down 0.02% at 6,807.53

NYSE Arca Tech 100 down 1.23% at 1,115.47

UPSIDE MOVERS

(+) PKT, (+17%) guidance above Street view

(+) FITB, (+0.1%) initiated at buy

(+) RAX, (+6.4%) upgraded

(+) EMR, (+2.3%) upgraded

(+) OVTI, (+0.5%) downgraded

DOWNSIDE MOVERS

(-) ARCC, (-0.8%) beats Q3 estimates

(-) LGCY, (-4.9%) prices offering

(-) ITW, (-2.1%) downgraded

(-) ALLT, (-6.6%) initiates share offering

(-) ALU, (-1.4%) upgraded

(-) TRGT, (-55.9%) drug study fails to meet primary endpoint

(-) URBN, (-5.6%) comparable retail sales slip 3%

(-) HON, (-0.3%) upgraded

(-) MCD, (-0.4%) same-store sales up 5.5%