U.S. stock markets swung up and down today and eventually ended the trading session with a slight gain. In terms of market news, the escalation of the insurgency in Iraq offset the positive momentum from takeover transactions and the growth of U.S. industrial production output.
There is no sign that the sectarian violence in Iraq will decrease as Sunni militants and Iraqi government forces continue to fight for control of Tal Afar. Iraq’s Prime Minister Nouri al-Maliki is a Shiite and he is fighting to prevent the advance of ISIL militants, who already took control of the largest city in the northern part of the country.
In other market news, the Federal Reserve reported that industrial production output in the United States increased 0.6% last month, higher than estimated—a sign that manufacturing growth is on track after the impact of severe weather conditions. Capacity utilization rose 0.2% to 79.1% in May.
John Ryding and Conrad DeQuandros, economists at RDQ Economics, noted, “Manufactured production has risen at a solid 5.3% annualized pace since February as although consumer goods output has fallen over the last three months, business equipment production has been robust and construction supply output has risen a fairly solid pace.”
Commenting on market news and trends, Matt McCormick, a portfolio manager at Bahl & Gaynor Inc., told Bloomberg, “The market is going to be very choppy over the summer and the market should prepare for more volatility. A lot of people are worried about the negative events that occurred over the weekend.”
- Dow Jones Industrial Average (DJIA) – 16,781.33 (+0.03%)
- S&P 500 – 1,937.76 (+0.08 %)
- NASDAQ – 4,321.11 (+0.24%)
- Russell 2000 – 1,165.47 (+0.24%)
- EURO STOXX 50 Price EUR – 3,261.42 (-0.65%)
- FTSE 100 Index – 6,754.64 (-0.34%)
- Deutsche Borse AG German Stock Index DAX – 9,883.98 (-0.29%)
- Nikkei 225 – 14,933.29 (+0.83%)
- Hong Kong Hang Seng Index – 23,300.67 (-0.08%)
- Shanghai Shenzhen CSI 300 Index – 2,191.86 (+1.72%)
Market News: Stocks in Focus
The stock price of Covidien plc (NYSE:COV) surged more than 20% to $86.75 a share after the company agreed to be acquired by Medtronic, Inc. (NYSE:MDT) for $42.9 billion. The shares of Medtronic dropped more than 1% to $60.02 per share.
Yahoo! Inc. (NASDAQ:YHOO) dropped nearly 6% to $34.81 per share after Alibaba Group Holding Ltd reported that its operating margin declined 6% to 45.3% year-over-year. Yahoo! owns a 22.5% stake in Alibaba.
The shares of Williams Companies, Inc. (NYSE:WMB) rose more than 18% to $56.02 per share after it entered an agreement to buy the 50% general partner interest of Global Infrastructure Partners in Access Midstream Partners LP and 55.1 million units in the limited partnership for $6 billion in cash.