US close: S&P 500 unfazed by Yellen's speech
- Stocks gain after Jackson Hole
- M&A newsflow picks up
- Morgan Stanley shares reach post 2009 high
Dow Jones Industrials: 0.45%
Nasdaq Composite: 0.41%
S&P 500: 0.48%
The main US equity benchmarks continued to grind higher on Monday, buoyed by a spate of merger and acquisitions-related news-flow, with the S&P 500 at one point edging past the psychological 2,000 point mark for the first time ever.
The above followed on the heels of what was seen by some as a somewhat hawkish speech from Janet Yellen at the Jackson Hole symposium of central bankers. Speaking to her audience the Fed chair said that if unemployment continued to decrease more quickly than expected then the central bank might have to raise rates sooner than is currently priced into financial markets.
Nevertheless, reactions to her speech were quite varied.
Following her remarks financial derivatives markets were pricing in a 56% probability that the Fed would move on rates by July of 2015, versus 48% a week before, according to Bloomberg data on futures' prices.
Geopolitical waters still unsettled
After the close of trading The Wall Street Journal Europe reported that the Pentagon is preparing to send surveillance aircraft, including drones, into Syria to gather intelligence on possible Islamist State targets.
In parallel, militants captured Libya's Tripoli airport, underlining the still hazardous security situation in the North African country where oil exports have recently been staging a moderate recovery.
Ukrainian President Petro Poroshenko is due to meet his Russian counterpart on Tuesday. Tensions between the two countries were reported to have eased a tad after a Russian aid convoy which entered the country on left during the weekend.
Housing market stabilising rather than improving
As regards the hard data published on Monday, US new home sales dropped 2.4% month-on-month in July to reach an annualised rate of 412,000 (Consensus: 425,000).
Estimates to readings for the prior two months were revised up by a total of 33,000 units however.
"Altogether, this is a softer report than expected and suggests housing demand has stabilized in recent quarters, as opposed to improving," Barclays Research economist Michael Gapen wrote in a report.
The three month moving average for the Chicago Fed's national activity index improved to a reading of 0.25 in July from 0.16 for the previous three months.
Transaction flow picks up
Stock in Burger King rocketed after announcing that it is in talks to purchase Canadian rival Tim Horton in a transaction that could see the creation of the world's third largest fast food chain.
In other transactions, Swiss drug giant Roche unveiled an $8.3bn bid for US outfit InterMune, sending stock in the latter surging ahead by 35%. The Basel-based ompany is seeking to gain control of InterMune's new treatment for diopathic pulmonary fibrosis.
Financials did well during the session, with shares of Morgan Stanley reaching a post-financial crisis high.
Also after the close of trading, Amazon.com confirmed earlier reports that it is to acquire Twitch, a live-streaming service for videogame players, for over a $1bn.
From a sector standpoint the best performing industrial groups were: biotechnology (2.05%), exploration and production (1.51%) and investment services (1.49%).
Small moves in other asset classes
Front month West Texas crude futures ended the day 0.07% higher to stand at $93.42 per barrel on the NYMEX.
US 10-year Treasury yields were two basis points lower at 2.38%.
S&P 500 - Risers
Newfield Exploration Co (NFX) $43.86 +3.44%
Gilead Sciences Inc. (GILD) $107.45 +3.36%
Cimarex Energy Co (XEC) $139.14 +3.11%
Chesapeake Energy Corp. (CHK) $26.74 +2.77%
Range Resources Corp. (RRC) $78.85 +2.72%
United States Steel Corp. (X) $38.80 +2.62%
Best Buy Co. Inc. (BBY) $31.99 +2.53%
Alexion Pharmaceuticals Inc. (ALXN) $170.56 +2.46%
Morgan Stanley (MS) $34.20 +2.18%
Blackrock Inc. (BLK) $332.96 +2.13%
S&P 500 - Fallers
Peabody Energy Corp. (BTU) $15.73 -2.36%
Cablevision Systems Corp. (CVC) $17.92 -2.29%
CONSOL Energy Inc. (CNX) $39.39 -1.97%
Discovery Communications Inc. Class A (DISCA) $43.91 -1.90%
Newmont Mining Corp. (NEM) $25.98 -1.55%
Xilinx Inc. (XLNX) $41.80 -1.39%
Texas Instruments Inc (TXN) $47.37 -1.35%
Allergan Inc. (AGN) $163.41 -1.30%
Transocean Ltd. (RIG) $37.48 -1.29%
Juniper Networks Inc. (JNPR) $23.75 -1.25%
Dow Jones I.A - Risers
JP Morgan Chase & Co. (JPM) $59.34 +1.45%
Goldman Sachs Group Inc. (GS) $177.87 +1.37%
Verizon Communications Inc. (VZ) $49.15 +1.05%
Merck & Co. Inc. (MRK) $59.73 +0.95%
Nike Inc. (NKE) $80.01 +0.91%
American Express Co. (AXP) $89.59 +0.80%
Coca-Cola Co. (KO) $41.41 +0.71%
Boeing Co. (BA) $128.33 +0.68%
Caterpillar Inc. (CAT) $107.97 +0.62%
Travelers Company Inc. (TRV) $94.29 +0.58%
Dow Jones I.A - Fallers
Cisco Systems Inc. (CSCO) $24.70 -0.76%
Intel Corp. (INTC) $34.81 -0.37%
Walt Disney Co. (DIS) $90.38 -0.12%
Wal-Mart Stores Inc. (WMT) $75.69 -0.05%
Pfizer Inc. (PFE) $28.91 -0.03%
Visa Inc. (V) $216.02 -0.03%
McDonald's Corp. (MCD) $94.44 -0.01%
Nasdaq 100 - Risers
Illumina Inc. (ILMN) $177.91 +3.44%
Gilead Sciences Inc. (GILD) $107.45 +3.36%
Alexion Pharmaceuticals Inc. (ALXN) $170.56 +2.46%
Tesla Motors Inc (TSLA) $262.55 +2.25%
Regeneron Pharmaceuticals Inc. (REGN) $347.91 +2.09%
Celgene Corp. (CELG) $93.40 +1.94%
TripAdvisor Inc. (TRIP) $103.79 +1.76%
Vertex Pharmaceuticals Inc. (VRTX) $91.76 +1.71%
Amgen Inc. (AMGN) $134.79 +1.71%
Kraft Foods Group, Inc. (KRFT) $58.09 +1.52%
Nasdaq 100 - Fallers
Discovery Communications Inc. Class A (DISCA) $43.91 -1.90%
Dish Network Corp. (DISH) $64.42 -1.42%
Xilinx Inc. (XLNX) $41.80 -1.39%
Texas Instruments Inc (TXN) $47.37 -1.35%
Analog Devices Inc. (ADI) $51.93 -1.16%
Cognizant Technology Solutions Corp. (CTSH) $45.63 -0.83%
Liberty Global plc Series A (LBTYA) $42.76 -0.81%
Intuit Inc. (INTU) $82.90 -0.80%
Yahoo! Inc. (YHOO) $37.71 -0.79%
Dollar Tree Inc (DLTR) $53.86 -0.77%
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