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Market Update

Durable Goods Orders Flat, Home Prices Up in September

Author: Nichole Harper
Last Update: 3:47 PM ET November 27 2012

11:30 AM New York U.S. stocks declined after Greek deal euphoria lifted indexes at the opening. ConAgra agreed to acquire private-label food maker Ralcorp for $6.8 billion. Consumer confidence increased in the month and durable goods orders were flat in October. Home prices rose 0.3% in September.

Stocks in New York traded lower after the early optimism about Greek deal faded and home prices rose in September and demand for durable goods rose at the fastest pace in October. Consumer confidence increased in November.

Home prices increased 4.4% from a year ago in September, according to the latest report released by the Federal Housing Finance Agency. Prices increased 0.3% from a year ago month.

Prices increased 1.1% in the third quarter to September from the previous quarter and jumped 4% from the year ago quarter, the report noted. The data is based on single-family home with mortgages from Fannie Mae and Freddie Mac.

Separately, Commerce Department said durable goods orders were flat in October at $216.95 billion after adjusting for seasonal effects.

Increased orders for goods including machinery by 2.9% were offset by the declining demand for new cars and planes.

Non-defense capital goods orders excluding aircraft increased 1.7%, largest increase since May. Demand for motor vehicles and parts fell 1.6% and volatile civilian-aircraft declined 5.8%.

An index of consumer confidence increased to 73.7 in November from a revised 73.1 in October, according to a private research group the Conference Board.

ConAgra to Buy Ralcorp for $6.8 Billion

ConAgra Foods, Inc. (CAG) climbed 3.9% or $1.11 to $29.40 after the food processing company agreed to acquire Ralcorp Holdings, Inc. (RAH) for $90 a share in cash or $5.1 billion, representing 28.2% premium to the closing price of on November 26. The transaction is valued $6.8 billion including the assumption of debt.

The company said the deal creates one of the largest packaged food companies in North America, with sales of about $18 billion annually. ConAgra will be the largest private label packaged food business in North America with combined sales of nearly $4.5 billion.

The transaction is expected to close by the end of March and the management expects modest benefit in fiscal 2013 financial results.

Ralcorp surged 26.4% or $18.57 to $88.80.

Euro Zone Approved Greek Deal

Euro zone ministers, the International Monetary Fund and the officials of European Central Bank agreed on a package of incentives and conditions after 12 hours of meeting.

Ministers agreed to cut Greek debt by 43.7 billion euros based on the estimate of government debt to drop to 124% of gross domestic product by 2020.

Greece will receive the 43.7 billion of funds in four instalments after it meets the conditions laid out by lenders. Of the 34.4 billion euros Greece will receive in December will include 23.8 billion loans that will fund banks and 10.6 billion will be released in government assistance.

Ministers also agreed that national governments will return 11 billion euros in gains in Greek debt securities held by national central banks.

New austerity steps demanded by international lenders require Greek debt to fall below 110% of GDP by 2022.

O.E.C.D Lowers Economic Outlook

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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