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Stocks Mixed After Data, Earnings

Jeremy Glaser

U.S. Market
Stocks were mixed this morning after earnings and economic data.

Home prices were up 9.4% year-over-year in May according to the S&P/Case-Shiller 10 City Home Price Index. The increase was below the 9.9% increase expected by economists and the 10.8% year-over-year growth seen in April.

The Conference Board reported this morning that consumer confidence is at its highest level since October 2007 . The confidence reading of 90.9 was up from 86.4 in June and was well ahead of expectations.

At midday the Dow was flat, the S&P 500 was down 0.1% while the Nasdaq was up 0.2%.

Stocks on the Move
Shares of UPS (UPS) fell 3.5% after the firm reported worse-than-expected second quarter results. The firm said that excluding one-time items it earned $1.21 per share compared to $1.13 a share in the year-ago period and expectations of $1.25 per share. Management also reduced its forecast for full-year earnings.

Patent expirations and high exposure to slowly declining mature products led Merck (MRK) to report relatively flat second-quarter results that slightly exceeded both our expectations and those of consensus. Shares were up 1.5% at midday.

Deutsche Bank's (DB) reported earnings of EUR 238 million (EUR 0.21 per share and a 2% return on equity) were nothing to crow about, but we see signs of increasing strength at the narrow-moat bank. Deutsche's capital position improved materially as a result of its capital raise and a dearth of negative surprises, and we now think that the bank is close to being fully capitalized. Deutsche's Common Equity Tier 1 ratio increased to 11.5% from 9.5% in the trailing quarter and its common tangible equity ratio, as we calculate it, increased to 4.3% from 3.7% in the trailing quarter. Shares were down less than 1% at midday.

Foreign Markets
European markers were higher on the day. In late trading, the FTSE 100, Paris CAC and Germany’s DAX were up 0.3%, 0.5% and 0.6% respectively.

Asian shares were also higher today. The Shanghai Composite was up 0.2%, the Nikkei 225 gained 0.6% while the Hang Seng was 0.9% higher.