U.S. Stocks Extend Gains on Durable Goods Orders Surge

Nichole Harper
26 Aug, 2014
New York City

Stocks on Wall Street rose after durable goods soared in July and consumer confidence index jumped to the most since October 2007. Burger King agreed to acquire Tim Hortons for $11 billion in a deal financed by Warren Buffett.

[R]12:45 PM New York – Stocks on Wall Street rose after durable goods soared in July and consumer confidence index jumped to the most since October 2007. Burger King agreed to acquire Tim Hortons for $11 billion in a deal financed by Warren Buffett.[/R]

Stocks on Wall Street gained after durable goods soared in July and consumer confidence unexpectedly increased.

S&P 500 index increased 6.72 or 0.4% to 2,004.65 and the Nasdaq Composite gained 0.3% or 13.50 to 4,570.86.

Burger King and Tim Hortons Agree to a Deal

Burger King Worldwide Inc agreed to acquire Tim Hortons Inc for C$12.5 billion or $11.4 billion in a deal partly financed by Warren Buffett’s Berkshire Hathaway Inc.

Tim Hortons investors will receive C$65.50 a share and 0.8025 share of the combined entity, according to the company statements.

Best Buy Co dropped after sales declined more than expected and DSW Inc soared 10% after quarterly profit rose more than expected.

The Conference Board reported consumer confidence index increased to 92.4 in August from a revised 90.3 in July. The index increased to the most since October 2007.

Durable Goods Orders Soar

Durable goods orders soared 22.6% in July from a revised 2.7% increase in June, the Commerce Department said today in Washington.

Orders excluding transportation equipment decreased 0.8% in July after a 3% increase in June.

The transportation orders were boosted by a surge in aircraft orders after the Farnborough Air Show in the U.K. Boeing Co received 324 orders for planes compared to 109 in June.

Non-military capital goods orders excluding aircraft decreased 0.5% in July after a revised June increase of 5.4% from the previous estimate of 1.4%.

Business investments in equipment soared at 7% annual rate in the second quarter to June from a 1% annual decline in March quarter, the Commerce Department’s report on gross domestic report showed.

U.S. Movers

Best Buy Co Inc ((BBY)) plunged 6.3% or $2.02 to $29.97 after the electronics products retailer reported revenue in the second-quarter ending on August 3 declined 4% to $8.90 billion from a year ago period. Comparable store sales in the quarter slipped 2% while and online comparable sales surged 22%.

Net income in the quarter tumbled 45.1% to $146 million or 42 cents a diluted share compared to $266 million or 77 cents from a same quarter last year.

DSW Inc ((DSW)) surged 9.2% or $2.60 to $30.98 after the footwear and accessories retailer reported net sales in the second-quarter ending on August 2 jumped 4.5% to $587 million from a year ago period.

Net income in the quarter rose 1.8% to $34.3 million or 38 cents a diluted share compared to $33.7 million or 37 cents from a same quarter last year.

European Markets

In London trading, FTSE 100 index gained 0.5% or 31.37 to 6,806.62 and in Frankfurt the DAX index rose 0.3% or 32.55 to 9,542.69.

In Paris, CAC 40 index jumped 0.7% or 32.75 to 4,374.86.

Antofagasta net plunged 16% after revenue declined 4%. Petrofac profit tumbled 44% and revenue plunged 11% but backlog surged 35% to $20 billion. Regus declined 5% to £25 million. UTV Media profit climbed 132% and revenue soared. WPP profit surged 26% to £396 million.

Asian Movers

Market indexes in Tokyo closed higher and the Topix index fell after rising the most in last twenty trading days. The Topix index is just 1% away from erasing all its losses.

The Topix added 0.4% and the Nikkei gained 0.5% and the yen declined 0.3%.

The Nikkei 225 Stock Average slipped 92.03 or 0.6% to 15,521.22 and the broader Topix index fell 6.30 to 1,285.01.

The yen eased after rising for two weeks in a row and the currency declined 0.2% for the first time in ten days of trading.

The yen closed at 103.89 against one U.S. dollar.

The Sensex Index edged up 5.79 to close at 26,442.81 The CNX Nifty slid 1.55 to 7,904.75.