Stocks were up at midday after the holiday weekend as another large merger could be in the works, this time among office-supplies retailers OfficeMax (OMX) and Office Depot (ODP), which could be a sign of even more merger and acquisition activity to come elsewhere.
Stocks also got a lift from an index that exceeded expectations for the German economy, with a reading of 48.2 compared with January's 31.5. Expectations were low for current conditions in the country, but long-term expectations were strong.
Despite the positive stock movement, U.S. homebuilder confidence fell this month to a housing-market index reading of 46, a one-point drop from January and the opposite of the expected one-point gain. Although conditions are still perceived as more or less poor, with an index of less than 50, the current reading is still near seven-year highs, and homebuilders still expect a modest rise during the year.
Stocks on the Move
OfficeMax and Office Depot shares had jumped by 23.6% and 12.9% by midday following a report that the two firms were in discussions to merge their businesses. Competitor Staples (SPLS) also saw its shares jump 11.3% on the news.
Medtronic (MDT) posted a 5.7% gain in third-quarter profit and a 2.8% year-over-year increase in revenue. Sales were in line with expectations, while earnings beat them. Shares were down by 2.3% at midday.
Late Monday, Express Scripts (ESRX) announced a 74% jump in fourth-quarter net income along with a sharp gain in revenue. The firm also announced a full-year earnings-per-share forecast to be at or above Wall Street expectations. Shares were 2.3% higher at midday.
Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.