Stocks Rise After Economic Data

Morningstar

U.S. Market
Stocks rose this morning, with the S&P 500 hitting a fresh intraday record, after new economic data.

Durable goods orders were up a much larger-than-expected 22.6% in July as orders for Boeing BA jets rose sharply in the month. Excluding transportation, orders fell 0.8% in the month. Overall, orders are up 4.3% so far in 2014 compared to 2013.

Home prices were up 1% in June from May levels according to the S&P/Case-Shiller 20-city index. The index was down 0.2% on a seasonally adjusted basis and is up 6.2% over the last year. All cities posted a slowdown in home price growth.

The Conference Board’s consumer confidence index rose to 92.4 from 90.3 in July. The index is now at the highest level since October 2007.

At midday the Dow and Nasdaq were each up 0.3% while the S&P 500 was 0.2% higher.

Stocks on the Move
Burger King (BKW) confirmed today that it is planning on purchasing Tim Hortons (THI) for $11 billion. Burger King is planning on moving its headquarters to Canada in order to lower its corporate tax rate. Warren Buffett’s Berkshire Hathaway (BRK.A)(BRK.B) is helping to finance the deal with $3 billion in preferred equity. Tim Hortons’ shares rose nearly 9% on the official announcement while Burger King fell 3%.

Best Buy's (BBY) second quarter echoed many recent themes, with cost-cutting being overshadowed by a comp decline of 2.7%. The firm’s Renew Blue cost reduction remained on track with the firm now having realized $230 million and $670 million in annual COGS and SG&A cost cuts. Management's expected adjusted operating margin to increase in line with first-half results (suggesting 50 basis points of full-year improvement versus adjusted operating margins of 2.8% a year ago). Shares were down 5% at midday.

Foreign Markets
European markets rose today. In late trading, the FTSE 100 and Germany’s DAX were each up 0.8% while the Paris CAC was 1.2% higher.

Asian shares were lower. The Hang Seng, Nikkei 225 and Shanghai Composite were down 0.4%, 0.6% and 1.0% respectively.

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