U.S. Stocks Flat; Apple to Pay Dividend, Buy Back Stock

Nichole Harper
19 Mar, 2012
New York City

U.S. stocks were flat and commodities were on the rise. Home builder confidence was steady in March after rising for five months in a row but and was at its highest since June 2007. U.S. sold off the final tranche of mortgage securities it purchased to save Fannie and Freddie during the 2008 crisis.

[R]12:30 PM New York – U.S. stocks were little changed in early afternoon trading and commodities were on the rise. Home builder confidence was steady in March after rising for five months in a row but and was at its highest since June 2007. U.S. sold off the final tranche of mortgage securities it purchased to save Fannie and Freddie during 2008 crisis.[/R]

Stocks in New York were little changed at mid-day as indexes hovered near 4-year highs and home builder sentiment was unchanged in March.

Apple Inc was in focus after the maker of popular electronic gadgets said it will pay a quarterly dividend of $2.65 a share and buy back $10 billion of its stock. The company has $97.6 billion in cash and for years the company has resisted calls to install shareholder dividend.

Home builder confidence released by the National Association of Home Builders and Wells Fargo was steady at 28 in March. The confidence index among single family home builders was flat after rising for five months in a row. Any reading below 50 indicates negative sentiment and the index is now at its highest since June 2007.

Regionally, the index rose five points to 25 in the Northeast, increased two points to 32 in the Midwest and rose by the same to 27 in the South but declined 10 points in the West.

The U.S. Treasury Department said that it sold off final tranche of $225 billion in mortgage backed securities it purchased during the financial crisis that averted the collapse of the Fannie Mae and Freddie Mac.

The securities were issued by the Fannie and Freddie at the time of the crisis and the government netted $25 billion in interest during the period of four years and the final sale began last week. So far the government has spent $150 billion to save two home lending institutions.

IMF chief Christine Lagarde said on Sunday that the global economy has avoided the financial storm and there are early indications of stabilization from the euro zone and the U.S.

World markets edged higher and commodities trade up on the speculation that a recent production problem at a railroad controlled by Brazilian iron miner may disrupt world supplies.

Stock Movers

[Apple Inc ((AAPL)) increased $10.98 or 1.9% to $595.55 after it announced a plan to distribute its cash hoard of $98 billion.

Broadcom Corp ((BRCM)) increased 2.4% to $38.71 after the fables chip maker won a preliminary court ruling against its rival Emulex Corp ((ELX)) which trended lower to $10.30.

United Parcel Service, Inc. ((UPS)) increased 2.7% or $2.14 to $80.55 after the courier company agreed to acquire Netherlands based delivery service provider TNT Express N.V. for $6.8 billion.

UPS will pay approx $12.50 in cash per share or 9.50 euros a share and was forced to increase its offer from 9 euros a share and the stock had risen more than 50% since February 17.

AboveNet, Inc. ((ABVT)) soared 13.3% or $9.92 to $84.17 after the high bandwidth network provider said Zayo Group, LLC a fiber based bandwidth infrastructure and network provider will acquire AboveNet for approximately $2.2 billion.