U.S. Home Sales Drop, GDP Estimate Lowered to 2%

Nichole Harper
22 Dec, 2015
New York City

Market indexes on Wall Street struggled to extend 2-day gains and commodities lacked direction in lacklustre trading. Existing home sales in November declined 10.5% but median home price rose 6.3%. European deal announcements picked up. Asian markets closed mixed.

[R]11:50 AM New York City, New York – Market indexes on Wall Street struggled to extend 2-day gains and commodities lacked direction in lacklustre trading. Existing home sales in November declined 10.5% but median home price rose 6.3%. European deal announcements picked up. Asian markets closed mixed.[/R]

In below average trading, stocks lacked direction for the second day in New York and deal activities heat up in Europe ahead of the year end.

Stocks opened higher in New York but failed to extend 2-day gains and commodities remained under pressure.

U.S. economic growth in the third quarter was slightly lowered to annual rate of 2% from the previous estimate, according the final estimate released by the government.

The economy slowed down from the 3.9% in the previous quarter and the estimate was lowered from the 2.1% rate release a month ago.

U.S. existing home sales rate declined to the slowest pace in 19 months after the new federal rule slowed the closing process.

Sales declined 10.5% in November to an annual rate of 4.76 million from 5.32 million in October, according to the latest data released by the National Association of Realtors.

However, median home price increased 6.3% to $220,300 from a year ago month.

On Wall Street, Tollbooth Strategy Index increased 45.92 or 0.4% to 10,722.78.

S&P 500 index gained 6.79 or 0.3% to 2,027.57 and the Nasdaq Composite Index rose 13.15 or 0.3% to 4,981.93.

Crude oil in New York added 20 cents to $36.01 a barrel and gold fell $2.79 to $1,075.61 an ounce.

U.S. Movers

General Electric Company ((GE)) fell 15 cents to $30.25 after the diversified industrial conglomerate agreement to sell 23.3% stake worth about for $600.8 million or 703 billion won in Hyundai Capital Services to Hyundai Motor Company and Kia Motors.

NetApp Inc ((NTAP)) plunged 7.1% or $1.96 to $25.65 after the data storage equipment maker agreed to buy privately held flash storage systems maker SolidFire Inc. for $870 million in cash.

The deal is expected to close in the fiscal fourth-quarter.

Western Refining Inc ((WNR)) slumped 3.2% or $1.17 to $36.35 after the crude oil refiner and marketer agreed to acquire the remaining stake in Northern Tier Energy LP that with a revised offer worth about $2.43 billion.

Under the terms, shareholder of Northern Tier will receive $15 in cash and 0.2986 per share, the offer represents a 7.9% premium to closing price of Monday.

The transaction is expected to close in the first-half of 2016.

European Markets

European stock markets edged higher on Tuesday, helped by a rebound in energy stocks and string acquisition announcements.

Market trading was volatile and volumes were low ahead of the Christmas holidays.

Energy stocks recorded gains, despite oil prices lost early gains and Brent crude plunged back to $36.14 a barrel.

The Italy-based ENI jumped 1.2%, Tullow Oil gained 0.6%, and John Wood Group rose 1.3%.

In London trading, FTSE 100 index increased 29.69 or 0.5% to 6,064.20 and in Frankfurt the DAX index fell 64 or 0.6% to 10,435.09.

In Paris, CAC 40 index slipped 14.80 or 0.3% to 4,551.49.

Carrefour SA slipped 1.3% to €26.08 after the France-based hyper and, supermarkets operator agreed to buy Romanian supermarket chain Billa Romania from Germany's Rewe Group for an undisclosed amount.

Eurobank Ergasias SA, the Greek-based bank agreed to sell its 80% stake in Eurolife ERB Insurance Group Holdings S.A. to Canada-based Fairfax Financial Holdings Limited for about €316 million or $345 million but retain a stake of 20% in the Eurolife.

The transaction is expected to close before the end of the third-quarter of 2016.

Finansbank AS soared 12.8% to 6.60 Turkish lira after the Turkey-based commercial bank said National Bank of Greece S.A. enters into a definitive agreement with Qatar National Bank S.A.Q. to sell its 99.8% stake in bank for a total consideration of €2.75 billion or $2.95 billion.

Asian Markets

The Nikkei 225 average closed marginally lower, while the Topix index edged higher in a lacklustre trading session ahead of a national holiday.

McDonald reportedly plans to sell up to 33% stake in its Japanese unit. Recruit agreed to acquire Dutch rival USG People for €1.42 billion.

The stock market in Tokyo were little changed and trading remained subdued ahead of the national holiday on Wednesday.

Investors remained cautious amid low oil prices and uncertainty about the global economy.

While Christmas is not a public holiday in Japan, markets will remain closed on Wednesday to observe the emperor's birthday.

Stocks of export-oriented companies were mixed with Toyota up 0.7%, Honda Motor down 0.3%, and Panasonic decreased 0.7%.

On the corporate front, McDonald plans to sell up to 33% stake in its Japanese unit for 100 billion yen and Recruit agreed to acquire smaller rival USG People for about 188.5 billion yen.

The Nikkei 225 Stock Average fell 29.32 or 0.2% to 18,886.70 and the broader Topix index added 2.32 to 1,533.60.

The yen edged down against the dollar to 121.22.

Stocks in Mumbai traded sideways and rupee gained for the sixth day in a row as Asian markets rested in shortened trading week.

Market indexes on Dalal Street edged lower and investors reacted to corporate news. Adani Enterprises won a regulatory approval to proceed with coal handling terminal and exploring coal mine in Australia.

Abbot Point coal terminal expansion in Queensland will facilitate the exploration of Carmichael coal mine.

Telecom stocks also closed higher after the regulatory authority said it will no longer pursue wireless companies for the calls dropped before January 6.

The Telecom Regulatory Authority had demanded the wireless carriers to compensate customers for first three calls dropped per day.

Rupee rose 1 paisa to ₹66.34 against one U.S. dollar.

The Sensex Index fell 145.25 or 0.6% to close at 25,590.65. The CNX Nifty decreased 48.35 or 0.6% to 7,786.0.

State Bank of India is looking to raise as much as $2 billion through a bond offering and Kotak Mahindra Bank acquired 1.37% stake in Godrej Properties.