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Market Update

Ahead of Fed Decision Wall Street Positive on Deals, Coty Soars 17%


Author: Nichole Harper
ticker.com
Last Update: 1:36 PM ET June 16 2015

1:30 PM Market indexes on Wall Street advanced ahead of Fed statement tomorrow and rising merger activities. Coty Inc soared 18% after the company acquired beauty business portfolio from Procter & Gamble. Housing starts plunged but permits soared 11%.

Stocks on Wall Street advanced as deal activities perk up and the euro remained under pressure.

Widely followed market indexes gained in anticipation of Fed statement at the conclusion of policy setting meeting tomorrow.

Federal Reserve is not likely to increase rate at the end of meeting tomorrow but investors will be looking for clues of the future direction the interest rates in the statement tomorrow.

Also, housing starts plunged sharply in May after surging in April and the future outlook for the industry remains healthy with the permits rising at a strong pace.

Housing starts in May declined 11.1% to 1,036,000 annual rate from the revised April estimate but jumped 5.1% from a year ago month to 986,000 rate.

Housing permits in May soared 11.8% from the revised April rate and climbed 25.4% from a year ago month rate to 1,275,000, Department of Commerce said.

On Wall Street, Tollbooth Strategy Index increased 0.2% or 19.67 to 10,703.34.

S&P 500 index rose 0.5% or 9.75 to 2,094.17 and the Nasdaq Composite Index gained 0.4% or 22.48 to 5,052.38.

Crude oil in New York added 31 cents to $59.83 a barrel and gold slipped $5.30 to $1,180.50 an ounce.

U.S. Movers

Boeing Co (BA) rose 13 cents to $142.42 after the aerospace company said at the Paris air show sold 100 737 MAX 8 passenger jets to Netherlands-based AerCap NV, the aircraft leasing company in a deal worth $10.7 billion at list prices.

AerCap owns about 1,800 aircrafts and operates in more than 90 countries.

Separately, Boeing said SMBC Aviation Capital placed an order for additional order for 10 737 MAX 8s including for 80 737 MAX 8s that now for a total of 90 aircrafts.

As per website of the aerospace company it secured total orders of about 210 planes from various airlines.

Berkshire Hathaway Inc ((BRK.A)) jumped $499.95 to $209,799.95 after the conglomerate agreed to acquire 3.7% stake in Australia-based Insurance Australia Group for about $500 million as part of a ten-year strategic partnership.

Berkshire will buy 89.8 million new IAG shares at $5.57 per share with an option to buy additional 5% within 24 months but also agreed not to exceed 14.9% stake.

Cox Automotive, Inc, the vehicles trader agreed to acquire software solutions provider for automotive retailers Dealertrack Technologies, Inc. in an all-cash deal valued at $4 billion.

Cox offered $63.25 per Dealertrack share, a 59% premium to closing stock price of $39.85 per share on Friday.

The transaction is expected to close in the third-quarter.

European Markets

European market indexes recovered in the afternoon trading after the weaker euro brought bargain hunters to the table.

The euro declined 0.6% against the U.S. dollar and the Greece-led market sell-off also led value buyers to step up and increase risk exposure to stocks.

However, Greek market index dropped 4.8% and the Prime Minister Alexis Tsipras blamed international lenders to the impasse in negotiations as the country lurches to a loan default.

U.K. annual inflation measured at consumer prices rose 0.1% in May from 0.1% decrease in April, the Office for National Statistics said.

In a separate report, the department added producer prices index for all manufactured products fell 1.6% in May from 1.7% decline in April.

In the preliminary estimate for first-quarter, employment rose 0.1% in the euro area and 0.3% in EU28 region compared to previous quarter, the Statistical Office of the European Communities reported today.

In London trading, FTSE 100 index slipped 0.2% or 13.54 to 6,707.76 and in Frankfurt the DAX index edged up 12 to 10,996.20.

In Paris, CAC 40 index gained 0.2% or 11.91 to 4,827.27.

Alstria Office REIT AG slipped 0.7% to 11.49 after the Germany-based property developer offered the rival DO Deutsche Office AG 800 million or $901.5 million.

Alstria offered 0.381 new shares for each Deutsche Office share, a premium of 12% to the closing price on Monday.

Asian Markets

Stocks in Tokyo closed down and the yen held near its recent lows in cautious trading. Sentiment weakened for the second day after talks between Greece and European lenders collapsed.

Kao Corp, the cosmetic maker said first-half sales operating profit increased 3%.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc