Stocks are higher at mid-day as better-than-expected economic data out of China and Europe trumped disappointing housing data in the U.S. The major indexes are firm, with all three major indexes up near, or exceeding, 2% gains. Optimism over possible new stimulus from the Federal Reserve is also providing lift.
Fewer people purchased new homes in July, according to new data from the U.S. Commerce Department. It was the fourth straight month of declines and puts sales on track to finish the year as the worst on record, the Associated Press reported. Sales of new homes fell 1% in July to a seasonally adjusted annual rate of 298,000, the Commerce Department said. That is less than half the 700,000 figure economists say indicate a healthy market.
Homebuilder stocks fell after the report. Among them: KBH: -3.9%, PHM: -2.7%, TOL: +0.5%, SPF: -0.5%, DHI: +0.4%.
Also, investors are eying Federal Reserve chief Ben Bernanke, who will speak later this week from the central bank's annual retreat in Jackson Hole, Wyo. Some market buzz is centered on the possible announcement of a third round of quantitative easing measures.
In global economic news, HSBC's preliminary purchasing managers index for China's manufacturing sector rose to 49.8 in August from 49.3 in July. While a reading of less than 50 signals activity in the sector continued to contract, there had been expectations for an even weaker reading.
In Europe, the data was mixed, but packed few surprises. PMI readings for the euro zone signaled that manufacturing activity in the 17-nation region contracted slightly in August, while overall activity continued to grow at a slow pace. An unchanged composite PMI reading of 51.1 for August topped forecasts for a slide to 50.3, helping buoy sentiment, analysts said.
In company news:
Shares of H&R Block ( HRB ) are higher after the accounting firm said it plans to sell RSM McGladrey to McGladrey & Pullen, LLP for approximately $610 million, of which approximately $65 million will be financed by HRB. HRB will record a non-cash, after-tax charge of approximately $53 million, or $0.17 per share in the fiscal Q1 ended July 31.
Shares of PharMerica ( PMC ) are surging after the company received a buyout offer from Omnicare ( OCR ) of $441 million, or $15 per share, cash, Reuters reports. Including PMC's net debt, the transaction will be worth about $716 million.
Seven Arts Pictures ( SAPX ) says it will buy all of the capital stock of Big Jake Music for $5 million of convertible preferred stock, convertible into common stock at a premium to the market price at closing, and which is not subject to conversion for agreed periods of time.
Deven Sharma will step down as president of credit-rating agency Standard & Poor's and will be replaced by Douglas Peterson. Sharma will step down from his role as president on Sept. 12 and will leave the firm at the end of the year, McGraw-Hill Cos. ( MHP ) said in a statement. Peterson is currently chief operating officer of Citigroup's (C) Citibank unit. Sharma's exit comes just weeks after S&P downgraded its U.S. government debt rating to AA+ from AAA, a move that has faced much scrutiny. The agency is also facing questions surrounding its role in maintaining mortgage ratings ahead of the 2008 credit crisis.
ADRs of Sanofi (SNY) are higher after Reuters reported that a unit of the drug maker is close to buying the over-the-counter business of Universal Medicare for about $109.5 million. The report cited two sources with knowledge of the matter. The deal involves 30 brands sold by Universal Medicare.
Shares of Research in Motion (RIMM) are higher after the cell phone maker unveiled three models of its BlackBerry Curve, which will feature its new BlackBerry 7 operating system. Research in Motion, which unveiled high-end models that were updated with the new software three weeks ago, did not announce any carrier partners, the Associated Press noted in a report on the matter.
ADRs of Royal Dutch Shell (RDS.A) are higher after Bloomberg reported that Europe's largest oil company is among energy producers that have discussed a partnership to fund exploration of Papua New Guinea with Oil Search Ltd., that country's largest oil and gas producer. Oil Search may be able to sign an agreement with a partner next year, the report says.
In earnings news:
--Corinthian Colleges (COCO) says Q4 sales were $425.2 million, compared with the Thomson Reuters mean for $427.59 million. EPS, less items, were $0.13, above estimates for $0.11. Q1 sales are seen between $414 million and $424 million with EPS between a loss of $0.04 and a loss of $0.02. FY12 EPS are seen between $0.30 and $0.35.
Commodities are mixed. December gold contracts are down 1.01% to $1,872 an ounce while October crude oil contacts are up 0.98% to $85.25 a barrel.
In energy ETFs, the United States Oil Fund (USO) is up 1.79% to $33.32 and the United States Natural Gas fund (UNG) is up 2.11%, to $9.94.
In precious metal ETFs, the SPDR Gold Trust (GLD) is down 1.58% to $181.46. Market Vectors Gold Miners (GDX) is down 2.12% to $62.35. iShares Silver Trust (SLV) is down 2.16% to $41.71.
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