Business Blog Posts

The Dow hit a high for the year last week and is trading near a three-year high. The S&P 500 has moved to the top end of its recent trading range where it is facing resistance at its last high for the year.

Of S&P 500 companies that have reported, 75 percent beat analysts' expectations. That is just above the average over the past four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data.

Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, said concern about oil prices was offsetting the positive momentum from earnings. He said the market could track lower as the day progresses. "I could see some profit-taking after the advance we've had," he said.

U.S. crude hit its highest level since September 2008 in early trading but turned negative when the stock market opened. Still, Brent traded above $123 a barrel on an escalation of violence in the Middle East, as well as post-election unrest in OPEC member Nigeria.

The Dow Jones industrial average .DJI dropped 29.44 points, or 0.24 percent, to 12,476.55. The Standard & Poor's 500 Index .SPX fell 2.42 points, or 0.18 percent, to 1,334.96. The Nasdaq Composite Index .IXIC gained 0.48 points, or 0.02 percent, to 2,820.64.

This week is another hectic one for earnings with 180 S&P 500 companies set to report their quarterly scorecard.

Among companies reporting on Monday, RadioShack Corp's (RSH.N) quarterly profit fell due to weakness in its T-Mobile business and higher costs related to the roll-out of its wireless kiosks in Target (TGT.N) stores. The shares fell 1.7 percent to $15.59.

Road construction equipment maker Astec Industries Inc (ASTE.O) posted better-than-expected quarterly results helped by higher asphalt and mining group revenue. The shares rose 0.9 percent to $39.40.

Traders noted that activity would likely be subdued as many major European markets remain closed over the long Easter weekend. U.S. traders are returning after markets were closed on Friday for the Easter holiday.

"It's going to be very modest volume today," said John Brady, senior vice president at MF Global in Chicago. "It's a day we want to play defense and not offense."

There was evidence of risk aversion in the market. Silver jumped more than 5 percent and gold rose to a record as investors sought shelter against a weaker dollar, while prices of grains and crude oil surged on supply fears.

The CBOE VIX volatility index .VIX rose more than 6 percent after falling last week to its lowest level since 2007.

The U.S. Federal Reserve is meeting this week and will hold the first of four press conferences per year on Wednesday. Investors are looking for clues about the direction of monetary policy when the Fed's bond buying program ends in June.

(Editing by Kenneth Barry)

The Commerce Department said on Monday sales rose 11.1 percent to a seasonally adjusted 300,000 unit annual rate, after an upwardly revised 270,000 unit pace in February.

Economists polled by Reuters had forecast new home sales climbing to a 280,000-unit pace last month from a previously reported record low 250,000 unit rate.

Compared to March last year sales were down 21.9 percent.

The market for new homes is being squeezed by competition from previously owned homes and a deluge of foreclosed properties, even though inventories of new houses are at a 43-1/2 year low.

A report last week showed there were 3.55 million previously owned homes on the market in March, well above the economy's natural rate of between 2 million and 2.5 million.

When foreclosed homes and those that are highly delinquent are taken into account, economists say supply is anywhere in the range of 8 million to 9 million.

The median sales price for a new home rose 2.9 percent last month to $213,800 from February. Compared with March last year, the median price fell 4.9 percent.

At March's sales pace, the supply of new homes on the market slipped to 7.3 months' worth from 8.2 months' worth in February. There were 183,000 new homes available for sale last month, the lowest since August 1967.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

Already the world's largest gold miner, Barrick is looking to bolster its position in copper, a primary industrial metal, while prices are near record highs.

Toronto-based Barrick said Equinox had agreed to be acquired for C$8.15 a share, an 8.7 percent premium over the company's Thursday closing price. According to Reuters data, Equinox has about 879.5 million listed shares, which would make the deal worth nearly C$7.2 billion.

Minmetals earlier this month offered to buy Equinox for C$7 a share, but the Australian copper miner called that proposal a low-ball bid. Equinox said it believes the Barrick bid is superior in terms of price and likelihood of completion.

Barrick said its agreement for Equinox prevents the Australian miner from soliciting superior bids and gives Barrick the right to match any higher offers. Equinox would have to pay Barrick C$250 million to walk away from the deal, even if it accepts a higher bid.

Equinox has prime copper assets in Africa and Saudi Arabia that make it attractive to larger miners. Its Lumwana copper and uranium mine in Zambia is Africa's third-largest copper mine by production and the Jabal Sayid copper development in Saudi Arabia is due to start production next year.

Barrick Chief Executive Aaron Regent said the deal would improve the company's copper exposure in a strong price environment for the metal, which is used in construction and industrial applications.

"Combined with our Zaldivar mine and Cerro Casale project in Chile, this acquisition would position Barrick with significant production growth potential in two of the most prolific copper-producing regions of the world," Regent said.

As part of its agreement to be bought by Barrick, Equinox will pull its unsolicited bid for Lundin Mining (LUN.TO). Equinox had been trying to take over its rival copper miner since February but conceded on Monday that its own shareholders would not likely have supported the deal.

U.S.-listed shares of Barrick slid 1.4 percent to $54.85 in premarket trading after the announcement.

Barrick said it has committed cash and financing in place for the transaction. It expects the deal to add to earnings per share and cash flow immediately.

Morgan Stanley and RBC Capital Markets advised Barrick on the deal, while CIBC World Markets, Goldman Sachs and TD Securities acted as financial advisers to Equinox.

(Reporting by Michael Erman; Editing by Frank McGurty)

Of S&P 500 companies that have reported, 75 percent beat analysts' expectations. That is just above the average over the past four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data.

The Dow hit a high for the year last week and is trading near a three-year high. The S&P 500 has moved to the top end of its recent trading range where it is facing resistance at its last high for the year.

Companies reporting earnings on Monday include Express Scripts (ESRX.O) and Ameriprise Financial (AMP.N). This week is a hectic one for earnings with another 180 S&P 500 companies reporting their quarterly scorecards.

"The earnings reports from last week were pretty positive," said John Brady, senior vice president at MF Global in Chicago. "There will be a focus and concentration on earnings here."

Brent crude oil rose above $124 a barrel, pushed higher by an escalation of violence in the oil-producing Middle East, as well as post-election unrest in OPEC member Nigeria.

Brady noted that activity would likely be subdued as many major European markets remain closed over the long Easter weekend. U.S. traders are returning after markets were closed on Friday for the Easter holiday.

Silver jumped more than 5 percent and gold rose to a record on Monday as investors sought shelter against a weaker dollar, while prices of grains and crude oil surged on supply fears.

S&P 500 futures added 3.2 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 27 points and Nasdaq 100 futures rose 6.25 points.

"It's going to be very modest volume today," said Brady. "It's a day we want to play defense and not offense."

The U.S. Federal Reserve is meeting this week and will hold the first of four news conferences on Wednesday. Investors are looking for clues about the direction of monetary policy when the Fed's bond-buying program ends in June.

RadioShack Corp's (RSH.N) quarterly profit fell due to weakness in its T-Mobile business and higher costs related to the roll-out of its wireless kiosks in Target (TGT.N) stores. The shares fell 3.1 percent to $15.34 before the opening bell.

Road construction equipment maker Astec Industries Inc (ASTE.O) posted better-than-expected quarterly results, helped by higher asphalt and mining group revenue.

(Editing by Kenneth Barry)