It was a jittery start to the week for the major indexes with investors reacting to the continued Greek debt saga. Finance Minister Yanis Varoufakis warned the EU-IMF that the situation needs to be resolved quickly to ensure that an “accident” does not occur. The threat of a Greek exit was overshadowed mid-week by merger and acquisition news and the Fed meeting.
Merger and acquisition headlines out of the pharmaceutical and home building sectors had little positive effect on the overall market on Monday, with the Dow Jones finishing 107 points lower at 17,791. On the economic front, disappointing Industrial Production data also weighed on Wall Street with a 0.2% contraction posted for the period.
- Ryland Group (RYL ) rose 5.2% off the back of news that they would be merging with Standard Pacific. The new entity will command a $5.2 billion market capitalization. RYL has a dividend yield of 0.27%.
- Target (TGT ) announced that they will be selling their pharmaceutical business to CVS Health for $1.9 billion. TGT has a dividend yield of 2.69%.
Snapping a two-day losing streak, the Dow Jones rose 113 points on Tuesday off the back of economic data and investor confidence. The Census Bureau announced better-than-expected Building Permit approvals for the month of May with 1.28 million recorded; initial forecasts were 1.11 million. Housing Starts on the other hand dipped slightly to 1.04 million.
- The Gap Inc. (GPS ) confirmed that they will be closing 175 stores. The stock rose 1.4% during the session. GPS has a dividend yield of 2.36%.
- Coty (COTY ) rose almost 20% during the day with the company confirming a product purchase deal with Procter & Gamble. COTY has a dividend yield of 0.65%.
The FOMC announced on Wednesday that interest rates would remain unchanged. Confirming a potential shift in monetary policy later in the year, Fed Chief Janet Yellen identified the need for a controlled gradual rate rise to ensure that economic growth is not overwhelmed. The S&P 500 finished the session 0.2% higher at 2100.44.
- FedEx (FDX ) released its quarterly results with an $895 million loss posted for the period. Aircraft write downs were cited as the main cause. FDX has a dividend yield of 0.56%.
Technology stocks were in favour on Thursday with the market reacting to Wednesday’s Fed announcement and key economic data. Slightly below initial estimates of 0.5%, inflation rose 0.4% month-on-month. Core CPI, which excludes food and energy, came in at 0.1%. On the jobs front, Unemployment Claims fell to 267,000. The Nasdaq closed at 5132.95 (up 1.34%).
- Oracle Corp. (ORCL ) bucked the trend with the company announcing worse-than-expected earnings of 78 cents per share. ORCL has a dividend yield of 1.40%.
Dow futures are pointing to a flat start in trade on Friday with all eyes on the emerging markets and China. Posting the worst week since 2008, the Shanghai Composite fell 6.4% off the back of debt concerns. No economic data of importance will be released on Friday.
Next week will see earnings reports from: Carnival Corp. (CCL ), Ecology and Environment (EEI ), Ennis Inc. (EBF ), Kewaunee Scientific (KEQU ), Sonic Corporation (SONC ), American Software (AMSWA ), H.B Fuller (FUL ), Lindsay Corporation (LNN ), WSI Industries (WSCI ), Apogee Enterprises (APOG ), Herman Miller (MLHR ), Lennar Corp. (LEN ), Monsanto Corp. (MON ), Nike (NKE ), Steelcase (SCS ) , Winnebago Industries (WGO ), Worthington Industries (WOR ), Accenture (ACN ), AZZ Inc. (AZZ ), Commercial Metals (CMC ), and Finish Line (FINL ).
The following economic data will also be released: Existing Home Sales on Monday; Durable Orders, and New Home Sales on Tuesday; GDP and the Mortgage Index on Wednesday; Initial Claims, Continuing Claims, Personal Income and Spending on Thursday; Consumer Confidence on Friday.