By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market edged lower
Monday as excitement from a flurry of deal news, including the
takeover of Family Dollar Stores Inc. by Dollar Tree Inc. proved
unsustainable in light of weak housing data.
Sales of existing homes in June fell, marking the first decline
in four months. The weak housing number hit home builder stocks
hard. Later this week, the pace of data speeds up as investors will
get second-quarter gross domestic product, a Fed decision and July
payrolls among other economic items of importance. Get ready for 48
hours of economic fury
The S&P 500 (SPX) declined by 3.6 points, or 0.2%, to
1,974.71. The Dow Jones Industrial Average (DJI) was 23 points, or
0.1%, lower at 16,929.73. The Nasdaq Composite (RIXF) lost 12
points, or 0.3% to 4,437.51.
Follow MarketWatch's live blog of today's stock-market
action.
"We are not shocked with the home sales numbers because
demographic trends are underpinning those numbers. A much higher
proportion of young people is living with their parents, as they
are weighed down by student debt and stagnant wages," said Patty
Edwards, managing director and portfolio manager at US Bank Wealth
Management.
"Still, the economy is slowly improving and we expect companies
to continue to grow their earnings. This market is more and more
earnings driven and we are watching softer revenue growth, though
no alarm bells are going off yet," she added.
Also read: This stock bubble is 'beyond 1929 and 2007'
"Merger Monday" began with a deal in the retail industry, though
excitement about MA& activity failed to lift the markets.
Family Dollar Stores(FDO), soared 25% after Dollar Tree (DLTR)
said it would buy the rival discount retailer for $74.50 a share, a
roughly 23% premium over Family Dollar's closing price on Friday.
Dollar Tree shares were up 3.4%. Rival Dollar General Corp.(DG)
also rose 1.7%.
Shares in Zillow Inc (ZILLOW.XX) , which fell in early trade,
rebounded and rose 1.8% after the real-estate website said it is
buying a rival Trulia Inc.(TRLA) for $3.5 billion in stock. Trulia
jumped 18%.
El Pollo Loco Holdings Inc. (LOCO) surged 27%. The Mexican
fast-food chain soared 60% in its Nasdaq debut on Friday.
Among Monday's earnings reports, Tyson Foods (TSN) posted
earnings that missed Wall Street views, although revenue topped
forecasts. Tyson shares rose 2.7%.
Home builder stocks were hit hard after weak existing-home
sales. The SPDR S&P Homebuilders ETF (XHB) fell 1.7%.
Herbalife Ltd. (HLF) will report after the close on Monday.
Follow more of the day's notable movers in the regular Movers &
Shakers column.
Across other markets, Hong Kong's Hang Seng Index closed at
highs not seen in more than three years on Monday, after reports
that a plan to allow direct stock trading between Hong Kong and
Shanghai could be launched mid-October. European stocks were on
track to close lower.
Oil prices (CLU4) pushed lower, while gold (GCU4) was a touch
higher, and the U.S. dollar index(DXY), which measures the
greenback against a basket of six other currencies, was largely
steady.
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