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Market Update

Housing Starts Soar 23%, William Morris and IMG in $2.4 B Deal

Author: Nichole Harper
Last Update: 1:18 PM ET December 18 2013

1:15 PM New York – U.S. indexes drifted lower and new home construction soared 23% in November. Building permits in the month declined 3%. Silver Lake and William Morris agreed to acquire IMG Worldwide for $2.4 billion from Forstmann Little.

Stocks drifted lower in the afternoon and S&P 500 index declined 1.85 to 1,779.15 and the Nasdaq Composite Index fell 21.89 to 4,001.79.

The dollar advanced and traded at 103.19 yen and one euro fetched $1.3764. The dollar rallied 1% against Brazil’s real.

U.S. Treasury 10-year bond increased 5 basis points to yield at 2.75%. The yield has jumped from 1.76% at the end of last year but the yield is still lower than last decade average of 3.49%.

The yield on 30-year bond increased 4 basis points to 3.25%.

European Markets Advance

In London trading, FTSE 100 index rose 0.2% or 11.53 to 6,498 and in Frankfurt the DAX index climbed 0.9% or 88.01 to 9,173.

In Paris, CAC 40 index jumped 0.8% or 34.04 to 4,103.

Asian Markets Jump

Market indexes in Tokyo surged 2% on the speculation that the government will announce widely anticipated structural reform details this week.

The Sensex Index in Mumbai gained 1.2% after the Reserve Bank of India unexpectedly left its key lending rate unchanged and stressed high inflation is detrimental to the economy.

November Housing Starts Surge 23%

Housing starts soared 22.7% to a seasonally adjusted 1.09 million annual rate, the Commerce Department reported today. The October annual rate was revised higher to 889,000.

Building permits issued for new home construction declined in November to a seasonally adjusted annual rate of 1.01 million. The permits issued surged 8% from a year ago month when annual rate was 933,000.

A separate report from DataQuick yesterday showed home prices in six counties in Southern California were nearly flat in November.

The median sale price in Southern California barely increased 0.3% from October to 385,000 and rose 19.9% from a year ago month.

However home prices have been nearly unchanged for five months in a row as buyers stayed away after bidding wars spiked home prices this spring.

U.S. Stocks in Review

Home builders soared after the release of new home construction data and home construction reached to a new 5-year high.

Lennar Corp increased 2% after the home builder reported better than expected earnings and fiscal fourth quarter revenues increased 42% and quarterly earnings rose 32%.

Silver Lake and William Morris Acquires IMG

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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