Stocks Positive at Mid-Day, Despite Disappointing Consumer, Housing Price Data
Stocks have reversed morning losses and are higher at mid-day, despite a precipitous decline in confidence among consumers due to climbing crude oil costs and continuing high unemployment.
Consumer confidence fell by its largest one-month decline in over a year, MarketWatch noted. The Conference Board's index slipped to 63.4 last month from a revised 72.0 in February. Economists had expected the index to decline to 62.2 from February's initially reported level of 70.4, according to a MarketWatch poll.
In other economic data, the Case-Schiller home-price index for January was down 3.1% year-over-year in January, compared with a 2.4% year-over-year drop in December
Elsewhere, the dollar trimmed earlier losses following Federal Reserve remarks. Speaking at a banking forum in Prague, St. Louis Federal Reserve President James Bullard said the question of normalizing U.S. monetary policy is likely to return as a key issue in 2011 and that the Fed may not be able to wait until a range of global macroeconomic uncertainties including Mideast and North Africa turmoil, the impact of the Japanese earthquake, the U.S. fiscal situation and Europe's continued sovereign-debt crisis are resolved to begin withdrawing stimulus.
In company news:
GE ( GE ) announced today that its Energy business has entered into an agreement to acquire for approximately $3.2 billion approximately 90% of Converteam, a provider of electrification and automation equipment and systems, from a controlling shareholder group that includes management, Barclays Private Equity and LBO France.
RealNetworks ( RNWK ) said late Monday CEO Robert Kimball has resigned as president and CEO. He had been CEO since January 2010. The company named Mike Lunsford interim CEO while a CEO search is underway.
International Paper Co. ( IP ) is up after it announced that it is buying most of India's Andhra Pradesh Paper Mills Ltd. for about $257 million in cash. Separately, the company announced that it is raising its quarterly dividend to 26.25 cents per share from 18.75 cents per share. The paper company said it will own 53.5% of Andhra's outstanding stock, and will make a $62 million non-compete payment. International Paper also plans to buy another 21.5% of Andhra's outstanding stock for about $104 million in cash.
Vertex Pharmaceuticals ( VRTX ) announces positive results from a 24-week analysis of the ongoing Phase 3 ENVISION study of VX-770, an oral medicine in development that targets the defective protein that causes cystic fibrosis. The study met its primary endpoint. VRTX says it is on track to submit regulatory applications for approval in the United States and Europe in the second half of 2011.
Technology Research ( TRCI ) is sharply higher after it said late Monday Coleman Cable (CCIX) would acquire the company for $7.20 per share in cash, in a transaction valued at approximately $51.5 million on a fully diluted basis.
Apollo Group (APOL) is lower after it reported Q2 revenue of $1.048 billion, better than the analyst consensus of $1.029 billion on Thomson Reuters. Ex items, earnings were $0.83 per share, ahead of the Street view of $0.69 per share, if comparable. For FY 2011, the company sees revenue in the range of $4.65 to $4.75 billion, vs. the Street view of $4.68 billion. For FY 2012, APOL sees revenue in the range of $4.00 to $4.25 billion, vs. expectations of $4.5 billion.
Rio Tinto plc (RIO) is up after it extended its deadline to acquire a 50.1% stake in Riversdale Mining Ltd. Under its new unconditional offer, it said it would raise its purchase price to $16.50 per share from $16 if it acquires more than 47% of Riversdale stock by the new April 6 deadline. Rio is in battling to take control of the company against India's Tata Steel and Brazil's CSN, which collectively own 47% of the company and are trying to increase their stake in the Australian-based coal producer.
Commodities are higher. April gold contracts are up $7, or 0.16%, to $1,424 an ounce while May crude oil contacts are up 0.56%, or $0.58, at $104.56 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 0.99% to $41.83 and the United States Natural Gas fund (UNG) is down $0.07, or 0.6%, to $11.51.
In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.12% to $138.70. Market Vectors Gold Miners (GDX) is up 1.18% to $59.16. iShares Silver Trust (SLV) is up 0.22% to $36.27.