U.S. Stocks Meander on Weak New York Region, Home Builder Indexes

Nichole Harper
18 Feb, 2014
New York City

U.S. market indexes struggled and a $25 billion deal between Forest Lab and Actavis dominated market sentiment. Coca-Cola declined after revenues and earnings declined. Home builders fell. Kansas City Southern dropped 6% after a legislation in Mexico proposed opening railroad transportation market.

[R]11:20 AM New York – U.S. market indexes struggled and a $25 billion deal between Forest Lab and Actavis dominated market sentiment. Coca-Cola declined after revenues and earnings declined. Home builders fell. Kansas City Southern dropped 6% after a legislation in Mexico proposed opening railroad transportation market.[/R]

U.S. stocks struggled and merger deal of $25 billion overshadowed weak economic indicators in the U.S. and Europe and central bank actions in China and Japan.

S&P 500 index increased 1.30 to 1,839.93 and the Nasdaq Composite Index added 21.29 or 0.5% to 4,265.31.

A regional survey covering a wider region near New York State showed a slowdown in manufacturing activities.

The so called Empire State Index covering manufacturing in New York, New Jersey and Connecticut slowed in February to 4.48 from 12.5 in January.

The data was released by the Federal Reserve Bank of New York.

In central bank news from around the world, Bank of Japan expanded terms of its two small lending programs to banks for private lending and kept its bond buying program intact after a two-day meeting that ended today.

People’s Bank of China drained liquidity from the banking system, for the first time since June.

Forest Lab and Actavis in $25 B Deal

Forest Laboratories, Inc ((FRX)) surged 30.2% or $21.46 to $92.85 after the generic drugs maker agreed to be acquired by Ireland-based specialty pharmaceutical maker Actavis plc for cash and equity valued at approximately $25 billion or $89.48 per share of Forest.

Under the terms, shareholders of Forest will receive 0.3306 shares of Actavis common stock and $26.04 in cash for each share of Forest.

European Markets

European market indexes struggled by managed to close higher after investors focused on German investor confidence data.

The confidence index in the largest economy in the euro zone declined to 55.7 in February from 61.7 in January, The ZEW Center in Mannheim reported today.

UK consumer price index increase slowed to 1.9% rate in January, down from 2% in December according to the Office for National Statistics.

In London trading, FTSE 100 index gained 0.5% or 30.7 to 6,767.03 and in Frankfurt the DAX index rose 0.05% or 5 to 9,661.76.

In Paris, CAC 40 index slid 0.1% or 6.09 to 4,329.08.

PSA Peugeot Citroen is likely to raise capital of 3 billion euros by selling stakes to France and to China based Dongfeng Motor Corp, according to several local media reports.

U.S. Stocks in Review

The Coca-Cola Company ((KO)) declined 3.9% or $1.53 to $37.40 after the beverage maker reported revenue in the fourth-quarter ending in December dropped 4% to $11.04 billion.

Net income in the quarter slumped 8% to $1.71 billion or 38 cents a diluted share compared to $1.87 billion or 41 cents.

Duke Energy Corporation ((DUK)) gained 1.5% or $1.04 to $72.49 after the utility company reported revenue in the year ending in December climbed 25.5% to $24.6 billion.

Net income in the year surged 50.8% to $2.67 billion or $3.76 a diluted share compared to $1.77 billion or $3.07.

Genuine Parts Company increased 3.9% or $3.35 to $89.30 after the automotive parts distributor stated sales in the fourth-quarter ending in December soared 13% to $3.5 billion.

Net income in the quarter dropped 6.2% to $150.5 million or 97 cents a diluted share compared to $160.2 million or $1.03.

Medtronic, Inc ((MDT)) slipped 2.3% or $1.33 to $55.55 after the medical technology provider reported revenue in the third-quarter ending on January 24 increased 4% to $4.16 billion.

Net earnings in the quarter plunged 22.9% to $762 million or 75 cents a diluted share compared to $988 million or 97 cents.

The company reiterated its revenue outlook and expects revenue for the year to grow in the range of 3% to 4% and diluted earnings per share between $3.81 and $3.83.