Stocks on Wall Street were higher at midday as the Federal Reserve kicked off its latest rate-setting and policy meeting. The market opened higher but weakened and eventually turned mixed before it began to regain upside momentum. The averages found a level in higher ground near 11 am ET, from which they have moved in a narrow range.
ECONOMIC EVENTS: In the U.S., the Case-Shiller 20-city home price index rose 0.76% from the prior month and 12.86% from the prior year in February, which was roughly in-line with expectations. The Conference Board’s consumer confidence index fell 1.6 points to 82.3 in April, missing the forecast for an 83.2 reading. In Europe, the Gross Domestic Product in the United Kingdom expanded 0.8% in the first quarter over the previous quarter, missing expectations for 1% sequential growth.
COMPANY NEWS: Amid a backdrop of consolidation in the pharmaceutical industry, Merck (MRK) led all advancers on the Dow Jones Industrial Average with a 3% gain after its earnings per share, excluding certain items, beat expectations. The company, whose revenues were a bit shy of the consensus forecast, backed its full-year outlook for profits and sales. However, shares of drugmaking peer Bristol-Myers (BMY) fell nearly 3% after its own profit also beat expectations but the company narrowed its previously issued full year earnings forecast… IBM (IBM) shares gained over 1% after Big Blue’s board approved a 16% increase in its quarterly cash dividend to $1.10 per common share. Financial services company Ameriprise (AMP) also gained 6% after increasing its dividend by 12%, reporting better than expected earnings, and authorizing an additional $2.5B of stock repurchases.
MAJOR MOVERS: Among the notable gainers was Orbital Sciences (ORB), which rose 14% after agreeing to merge with Alliant Techsystems’ (ATK) Aerospace and Defense Group in a deal that will result in Orbital shareholders owning about 46% of the newly formed company. Shares of ATK, which also approved a tax-free spin-off of the company’s Sporting Group to shareholders, rose 8%. Also higher were U.S.-listed shares of Banco Santander Brasil (BSBR), which rose 15% after its parent, Banco Santander (SAN), offered to acquire the 25% of its Brazil unit that it doesn’t already own. Among the noteworthy losers was in-flight Internet service provider Gogo (GOGO), which tumbled 22% after AT&T (T) last night said it plans to begin providing 4G LTE Internet service on airplanes. Also lower following their earnings reports were 3D printer maker 3D Systems (DDD), which fell over 9%, luxury handbag retailer Coach (COH), which declined 8.5%, and tiremaker Goodyear Tire (GT), which dropped 7%..
