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Market Update

Wall Street Deals Power Indexes Higher, China Wholesale Inflation Plunges 5.4%

Author: Nichole Harper
Last Update: 1:16 PM ET August 10 2015

1:15 PM New York City, New York – Merger deals powered market indexes higher on Wall Street. European markets closed mixed and wholesale price index in China dropped the most in July in six years.

Stocks on Wall Street powered ahead after more deals were announced as investors bid up asset prices ahead of expected rate increase later in the year.

Market indexes advanced more than 1% but trading in Asia and in Europe was cautious after China reported wholesale price index declined in July.

Producer price index dropped 5.4% in China, the worst monthly decline since October 2009 and the 40th monthly decline in the index in a row. Weaker wholesale prices are expected to further dent corporate profits.

On Wall Street, Tollbooth Strategy Index increased 69.70 or 0.7% to 10,826.32.

S&P 500 index jumped 22.48 or 1.2% to 2,102.04 and the Nasdaq Composite Index rose 57.42 or 1.1% to 5,101.04.

Crude oil in New York gained 59 cents to $44.46 a barrel and gold increased $12.60 to $1,106.70 an ounce.

U.S. Movers

Berkshire Hathaway Inc ((BRK.A)) slipped 1.2% to $212,800 after the insurance to railroad conglomerate said total revenues in the second-quarter ending in June jumped 4% to $39.65 billion from a year ago period.

Net income in the quarter declined 37.3% to $4.01 billion compared to $6.40 million from the same quarter last year.

Separately, Warren Buffett controlled conglomerate agreed to acquire aerospace parts maker Precision Castparts Corp for $235 a share, 21% premium to Precision’s closing price on Friday or about $37.2 billion in cash, including net debt.

Shares of Precision Castparts Corp soared 19.1% to $230.87.

Mallinckrodt Plc (MNK) slid 0.07% $100.31 after the Ireland-based specialty pharmaceutical company agreed to acquire Therakos, Inc. a leading immunotherapy company in a transaction valued at approximately $1.33 billion.

European Markets

In London trading, FTSE 100 index slipped 24.18 or 0.4% to 6,711.15 and in Frankfurt the DAX index gained 103.79 or 0.9% to 11,592.50.

In Paris, CAC 40 index increased 35.73 or 0.7% to 5,191.50.

Air France KLM SA fell 0.3% to €6.43 after the France-based airline reported total number of passengers carried in July jumped 2.4% to 8.9 million on long-haul routes, including discount carrier Transavia.

Total passenger in the network in the month increased 1.3% to 7.6 million and total passengers climbed 9.4% to 1.3 million in Transavia and load factor up 4.4 points.

The airline said total passenger traffic in July increased 2.4% to 8.9 million from a year earlier but load factor in the cargo division in July dropped to 57.8% from 59.3% in a year ago month.

Asian Markets

Nikkei average in Tokyo closed higher and investors digested earnings reports for the third week in a row. Dai-ichi Life Insurance reported quarterly net rose 68% and revenues surged 13%. Toyo Tire & Rubber surged after estimating lower-than-expected decline in annual net income.

The current account surplus in June decline to 558.6 billion yen from by 1.88 trillion yen surplus in May and from 363.9 billion yen deficit in the same month of a year ago, the Ministry of Finance said.

For the year, exports climbed 5.6% to 64.56 billion yen while import declined 4.6% to 63.54 billion yen.

Total bank lending in July jumped 2.6% to 489.397 trillion yen compared to 2.5% in June, the Bank of Japan said.

Excluding trusts, bank lending climbed 2.7% to 425.614 trillion yen 2.6% higher than the previous month.

The Nikkei 225 Stock Average increased 84.13 or 0.4% to 20,808.69 and the broader Topix index gained 12.10 to 1,691.29.

The yen eased to 124.47 against a dollar.

Dai-ichi Life Insurance Co Ltd increased 1.4% to 2,525 yen after the life insurance company reported net sales in the first-quarter ending in June climbed 13.1% to 1.87 trillion yen from 1.65 trillion yen in a year ago period.

Net income in the quarter soared 68.3% to 115.22 billion yen compared to 68.47 billion yen and diluted earnings per share jumped to 96.95 yen from 68.95 yen in the same period a year ago.

Dai-ichi forecasted net sale for the year to decline 6.6% to 6.77 trillion yen but net income to surge 13% to 161 billion yen.

Market indexes on Dalal Street edged lower in active trading and investors focused on widening losses at Adani Power and quarterly net at Adani Port rose less-than-expected.

Rupee weakened 7 paisa to 63.88 against one U.S. dollar.

The Sensex Index slipped 134.67 or 0.5% to close at 28,101.72. The CNX Nifty fell 39 or 0.5% to 8,525.60.

Adani Ports said quarterly profit jumped 13% on 32% increase in revenues and Adani Power loss widened despite the decline in cost of imported coal and crude oil price.

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