The stock markets in the United States gained amid corporate earnings reports and mergers and acquisitions (M&A) activities. The rally was also driven by positive economic data showing that the industrial production in the country climbed 0.2%, and the wholesale prices increased more than expected last month.
Today, the Federal Reserve Beige Book business survey indicated the economic growth was modest to moderate, and all of the 12 districts reported stronger consumer spending and growth in the manufacturing sector.
Q2 Letter: Baupost won big in Q2 with PG&E, eBay, Liberty Global
Seth Klarman's Baupost recorded "strong" gains for the second quarter, although precise numbers were not included in the July 23 letter to investors, which was reviewed by ValueWalk. Klarman said that during the first quarter, they were "substantial purchasers of securities," while during the second, they were "significant net sellers" due to the strong rally. Read More
In a telephone interview with Bloomberg, Chris Hyzy, chief investment officer at U.S. Trust said, “You’re starting to see the economy and leading indicators move in the direction that most people expected to start the year.” He added that the positive economic data will lead to better-than-expected for companies that are economically sensitive. Furthermore, he opined that an increased merger activity is “emblematic of a corporate sector that has more comfort in the next couple of years.”
Meanwhile, Federal Reserve Chairperson Janet Yellen stated today that she does not see any alarming warning signals on asset values. She also said that the Fed has no opinion regarding the right valuation of equity prices. She added that they only monitor whether the prices are rising “outside historic norms.”
Yesterday, Yellen told the members of the Senate Banking Committee that the economic recovery is not yet complete, and “a high degree of monetary policy accommodation remains appropriate.”
• Dow Jones Industrial Average (DJIA)- 17,134.86 (+0.43%)
• S&P 500- 1,981.31 (+0.41%)
• NASDAQ- 4,425.97 (+0.22%)
• Russell 2000- 1,151.27 (-0.22 %)
• EURO STOXX 50 Price EUR- 3,202.94 (+1.56%)
• FTSE 100 Index- 6,784.67 (+1.19%)
• Deutsche Borse AG German Stock Index DAX- 9,859.27 (+1.44%)
• Nikkei 225- 15,379.30 (-0.10%)
• Hong Kong Hang Seng Index- 23,523.28 (+0.27%)
• Shanghai Shenzhen CSI 300 Index- 2,170.87 (-0.19%)
Stocks in Focus
The stock price of Intel Corporation (NASDAQ:INTC) increased 9.27% to $34.65 per share after the company impressed investors with its financial performance for the second quarter. The company reported a 6% improvement in the sales of its PC business unit, an indication that the PC market is recovering driven by corporate spending this year.
Intel also indicated in its outlook that consumer demand on desktops and laptops. The company also increased its stock repurchase program by $20 billion including a $ 4 billion planned stock back in the third quarter.
The shares of International Game Technology (NYSE:IGT) gained 9.16% to $16.92 per share after the company agreed to be acquired by Gtech SpA (BIT:GTK), an Italian lottery operator for $4.7 billion in cash and stock. Under the agreement, the shareholders of IGT will receive $13.69 in cash plus 0.1819 ordinary shares of the new company for every stock they own.
Time Warner Inc (NYSE:TWX) surged more than 17% to $83.13 per share after Twenty-First Century Fox Inc (NASDAQ:FOXA) made $80 billion takeover offer. Time Warner rejected the proposal. The shares of Twenty-First Century Fox dropped 6.22% to $33 per share today.