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Midday Market Update

Stocks Follow Europe Higher; Corporate News Eyed

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U.S. Market
Stocks recovered from Monday's sell-off and were higher at midday as fears about the eurozone faded following strong stock performance on European markets. The Markit eurozone purchasing-managers' index for January offered some optimism with a reading of 48.6, still in contraction territory, but better than the preliminary estimate and the smallest drop in 10 months. 

Stateside, the Institute for Supply Management's PMI for January fell to 55.2 compared with December's downward revision of 55.7. Still, the index points to U.S. business activity as still expanding, and last month's reading was slightly ahead of expectations. 

At midday, the Dow had gained 0.8%, and the S&P 500 was 0.9% higher. The Nasdaq was up by 1%. 

Stocks on the Move
After long speculation of a private takeover,  Dell (DELL) announced that CEO Michael Dell and investment firm Silver Lake Partners will acquire the company in a deal valued at $24.4 billion.  Microsoft (MSFT) is also financing $2 billion worth of the takeover. Michael Dell will remain CEO after the $13.65-per-share takeover closes in the second-quarter of the company's 2014 fiscal year. Dell shares were up by 0.9% at midday. Microsoft shares had gained 0.5%. 

 BP (BP) posted a 72% year-over-year decline in fourth-quarter earnings, stemming from excess fines related to the Gulf oil spill as well as a drop in production. The company, however, says it expects to resume growth. Shares were up by 1% at midday. 

 Automatic Data Processing (ADP) shares were up by 1.3% at midday after the company reported a 4.2% increase in second-quarter profit on the back of a 6.9% gain in revenue. Each reading beat expectations

 Yum Brands (YUM) had fallen by 2.7% at midday after the quick-service restaurant firm said it anticipates a 25% drop in same-store first-quarter sales in China resulting from the  recent controversy with some of Yum's previous poultry suppliers

Foreign Markets
Asian stocks were mixed following a poor Monday showing in Western markets. The Shanghai Composite was up 0.2%, but the Nikkei 225 fell by 1.9%. The Hang Seng was flat. 

Stocks in Europe were up, with the FTSE 100 rising 0.1%, and the DAX gaining 0.4%. The Paris CAC was 1% higher. 

Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.