Wall Street squeezed out slim gains Tuesday to close higher for the third consecutive day despite unfriendly data on housing and inflation plus continued tensions in the Middle East. After digesting a big jump in consumer prices and weaker than expected housing starts and permits, Wall Street climbed out of the red amid positioning before tomorrow's conclusion to the Federal Open Market Committee meeting. As the U.S. economy continues to show more consistent growth, the FOMC is expected to retain its bond-buying tapering schedule by shaving another $10 billion off its Quantitative Easing program. The market also expects policy makers to remain optimistic on the outlook for both inflation and employment.
Stocks began the day under water following release of a report that showed a 0.4% increase in consumer prices, twice what the Street was expecting. Excluding food and fuel prices, CPI rose 0.3%, beating estimates for a modest 0.2% increase.
Also reported Tuesday, May housing starts tumbled 6.5% to a seasonally adjusted annual pace of 1 million, more than the expected decline to 1.04 million from 1.07 million in April. Permits were also weaker than expected, falling to 991,000 from a downwardly revised 1.06 million in April.
In corporate news, Valeant Pharmaceuticals (NYSE:VRX) is taking its $53 billion offer for Allergan (NYSE:AGN) directly to shareholders and soliciting proxies in an attempt to replace the current Allergan board. Shares of both VRX and AGN closed more than 1% higher. Retail equity brokers got a shot in the arm from Senate hearings taking a hard look at the proliferation of "high-frequency trading," which allows certain firms to capitalize on their ability to execute faster trades. Shares of TD Ameritrade (NYSE:AMTD), Charles Schwab (NYSE:SCHW) and E-TRADE (NASDAQ:ETFC) closed with significant gains.
Here's Where The Markets Stood At The Close
US MARKETS
- Dow Jones Industrial Index was up 27 points (+0.2%) at 16,808
- S&P 500 was up 4 points (+0.2%) at 1,941
- NASDAQ Composite Index was up 16 points (+0.4%) at 4,337
GLOBAL SENTIMENT
- FTSE 100 was up 0.18%
- Nikkei 225 was up 0.29%
- Hang Seng Index was down 0.42%
- Shanghai Composite Index was down 0.92%
UPSIDE MOVERS
- (+) BIOL Oracle Partners prevails in board, legal fight, forcing CEO's outster
- (+) GWPH Preliminary data from a trial into its Epidiolex treatment for drug-resistant epilepsy showed positive results.
- (+) GIGA $2.4 mln order from U.S. Navy for Model 8003 Precision Scalar Analyzers
- (+) BTUI Raises Q2 revenue guidance
- (+) ANFI Reported better than expected Q4 earnings and revenue
DOWNSIDE MOVERS
- (-) PGEM Goldman downgraded the stock to sell from neutral
- (-) STRM Risks Nasdaq-delisting after failing to file 10-Q quarterly report on time
- (-) ACOR, Planning $300 mln public offering of convertible senior notes due 2021.
After Hours Stock News From Midnight Trader.
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