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Housing data offset by merger mania

Monday, July 28, 2014 - 02:27

Summary: Wall Street was little changed as investor sentiment bounced between housing concerns and jubilation over the combinations of Dollar Tree and Family Dollar, as well as Zillow and Trulia; Court orders Russia to pay $50 billion for Yukos siege; Lloyds agrees to LIBOR fine. Conway G. Gittens reports.

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PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Merger Monday not enough to make the case for a major move on Wall Street. But just enough for blue chips to avoid their first four-day fall since March. The S&P 500 and the Nasdaq were little changed. Housing data held the market back. Pending existing home sales fell for the first time in four months. And that comes on the back of the biggest slump in new home sales in almost a year. Homebuilding related stocks like Lennar, D.R. Horton, Masco and Mohawk Industries - big losers in the S&P 500. The Federal Reserve will have to consider an uncertain economic outlook when it begins a two-day meeting on Tuesday, says Mizuho Securities economist Steve Ricchiuto. SOUNDBITE: STEVE RICCHIUTO, U.S. ECONOMIST, MIZUHO SECURITIES (ENGLISH) SAYING: "When you look at the underlying data, there are still enormous amount of questions that are totally unanswerable at this particular point in time. Will the economy re-accelerate in the second half of the year after being basically flat if not slightly down in the first half of the year? Is there enough global momentum building to help pull the U.S. economy up? Or is the global momentum also likely to fail the way the U.S. momentum has failed." Now to the merger mash-ups of the day. Family Dollar is being snapped up by Dollar Tree in an $8.5 billion merger. The deal creates North America's largest discount retailer with more than 13,000 locations. But the two brands will remain separate. Investors think another bidder may come in for Family Dollar and that stock surged. Dollar Tree, the buyer, was also higher. Rival Dollar General was lower, as was discount king Wal-Mart. Online property websites Zillow and Trulia are moving in together in a $3.5 billion all-stock deal, aimed at eventually saving $100 million annually. Shares of Zillow rallied, while Trulia shares hit the highest since going public back in 2012. Two big stories in Europe. The Hague ruled that Yukos shareholders should be paid $50 billion by the Russian government for selling-off of assets to state-controlled Rosneft. The Kremlin says it will appeal the decision. British bank Lloyds agreed to pay $370 million in fines for playing a role in an interest rate rigging scandal during the financial crisis. There may be more to the UK-US joint settlement. Lloyds could face criminal charges at home. As for the markets: stocks in Germany, France and the UK were little changed.

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Housing data offset by merger mania

Monday, July 28, 2014 - 02:27