10:15 AM New York – U.S. indexes traded higher after personal income rose 0.3% and spending soared 0.8% in July. Hurricane Irene losses are expected to increase $10 billion in six states. Cisco agreed to acquire Versly to provide enhanced collaboration solutions. Spain reached an accord on public deficit limit.
U.S. indexes gained after better-than-estimated consumer income and spending reports for July.
Insurers declined on the worries that the total cost related to the Hurricane Irene is expected to exceed $10 billion. Flooding in Vermont, Philadelphia city and North Carolina and Virginia are expected to cost most of the damage.
Travelers, Allstate, Met Life and Prudential declined. Hurricane Katrina in 2005 has been the most costly with $71.3 billion of losses and Hurricane Andrew was the second most expensive with $24.6 billion of losses in 1992.
The total damage inflicted by Hurricane Irene may reach $7 billion, according to a private estimate making it among the 10 costliest catastrophes in American history.
AIR Worldwide estimated that insured losses in the Caribbean from Hurricane Irene will be between $500 million and $1.1 billion. AIR said it “expects the Bahamas will account for more than 60% of the insured loss—between $300 million and $700 million.”
European indexes edged higher after Spain’s main political parties reached an agreement on including limits on the country’s public deficit and debt in its constitution.
The amendment calls for public debt not to exceed 60% of gross domestic product, though the ceiling may be breached in the case of “natural catastrophe, economic recession or emergencies,” according to the text distributed last week by the Socialist party.
Spain’s ruling Socialist and conservative opposition Popular Party set a maximum structural or long-term deficit in the annual budget of 0.4% of gross domestic product from 2020 that will be enshrined in the constitution.
Greek banks EFG Eurobank Ergasias SA and Alpha Bank SA plan to merge, reports said citing people familiar with the matter. The merged bank will be Greece''s largest bank with assets of €150 billion or $217 billion, more than 2,000 branches and about €80 billion in deposits, according to various Greek media reports.
Asian markets gained after Japanese Finance Minister Yoshihiko Noda was elected as head of the ruling Democratic Party of Japan on Monday succeeding Prime Minister Naoto Kan who resigned on August 26.
The president of the Democratic Party will become Japan''s prime minister due to the party''s strength in parliament. Hence, Noda will become Japan''s sixth prime minister in the last five years.
U.S. Personal Income, Spending Rise
Consumer income and spending in the U.S. both increased in July, according to data released by the U.S. Commerce Department today.
The report showed that personal spending surged 0.8% in July following a revised 0.1% decrease in June.
Purchases of durable goods increased 2% in July following a 1.3% decline in June and purchases of non-durable goods fell 0.3% in July after a 0.4% increase in June.
Personal income rose 0.3% or $42.4 billion in July, after rising 0.2% in June.
Cisco Acquires Versly
Cisco Systems, Inc., the computer networking gear maker agreed to acquire privately-held Versly to enhance its collaboration offerings. Versly''s software will be integrated into a variety of Cisco''s collaboration offerings including Cisco Quad, Cisco Jabber and Cisco WebEx.
Financial terms of the transaction are undisclosed.