STOCKS RISE: Here's what you need to know

Stocks closed higher for the first time in three days. The Federal Reserve will conclude its two-day meeting tomorrow, update its monetary policy statement, and lay out its assessment of the economy.

First, the scoreboard:

  • Dow: 17,904.22, +113.05, (0.64%)
  • S&P 500: 2,096.34, +11.91, (0.57%)
  • Nasdaq: 5,058.76, +28.78, (0.57%)

And now, the top stories on Tuesday:

  1. Building permits surged to the highest level since January 2007 in May. Permits rose 11.8% to an annualized pace of 1.1 million, also beating economists’ forecasts. But housing starts fell more than expected — 11.1% at an annualized pace of 1.04 million. Economists had forecast that starts fell 4% to an annualized pace of 1.09 million in May. Permits for single-family homes rose 2.6% in the month at a rate of 683,000, and for privately owned units, permits rose 11.8% month-over-month. Permits for multi-family homes rose by 592,000. The surge in permits came mostly from the Northeast region. HSBC economists noted that the impending expiration of a 421-a tax incentive in New York City caused a spike in applications for permits.
  2. Blackstone Group and Carlyle Group are making a joint bid for NCR worth $US10 billion, according to Reuters. It’s a leveraged buyout, and other firms including Apollo Global Management have their eyes on NCR. Shares of NCR jumped 11%.
  3. The Atlanta Federal Reserve held its forecast of second quarter Gross Domestic Product steady at 1.9%. Its GDPNow tracker had nailed the contraction in Q1. In the most recent update, the Atlanta Fed noted that the tracker forecast ticked up to 2% after the industrial production data, but fell after today’s housing starts miss.
  4. Coty shares jumped 18% following a report in the New York Post on Monday that it won an auction for three Procter & Gamble businesses. The deal would reportedly be worth $US12 billion. Coty distributes products for brands including Adidas and Calvin Klein.
  5. The healthcare merger rumours remind Deutsche Bank analysts of “Game of Thrones.” In a note Tuesday, they recounted recent news, including reports on Monday that Anthem has approached Cigna for a merger. They wrote, “For the first half of 2015, the story with the MCO [Managed Care Organisation] stocks has been about rising anticipation of large scale M&A; [Monday’s] fusillade of media headlines suggest that all of the industry leaders are fully mobilizing their financial arsenals for the developing consolidation showdown.”
  6. There are two strange things happening in the final 30 minutes of trading. In a note Tuesday, JC O’hara of FBN Securities highlighted a divergence in the bids for S&P 500 stocks and small caps on the Russell 2000. While small-cap stocks have seen an increasing bid year-to-date, large-cap names are seeing less. And, O’Hara earlier highlighted that S&P 500 stocks are have fallen 2% in the final half hour of trading this year.

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