Stocks wavered in the early hours but were slightly higher at midday following statements from Standard and Poor's regarding the United States' credit outlook.
S&P raised its credit outlook on the U.S. to stable from negative and maintained the country's AA+ sovereign credit rating. The agency said the fiscal cliff compromise at the beginning of the year and solid private-sector contributions to the economy have tapered U.S. deficit concerns. However, S&P also noted that ongoing congressional debates and disagreements in Washington remain key worries for the country's economic future.
Separately, Federal Reserve Bank of St. Louis president James Bullard stated that despite improving economic conditions, poor inflation readings could pressure the Fed to continue its asset-purchase program for longer than expected.
Meanwhile, following last week's unsurprising payrolls data, employment trends data from the Conference Board slightly increased in May, though the board said the report does not indicate significant expected growth for the summer months.
Stocks on the Move
Late Sunday, IHS (IHS) announced it will acquire R.L. Polk (POLL) for $1.4 billion. IHS plans to utilize Polk's data on the automotive industry, specifically Polk's Carfax product. The transaction will be funded with 10% equity and the remainder with cash on hand and debt. At first glance, the deal makes strategic sense, according to Morningstar analysts, as Polk is similar to IHS in that it generates 75% of its revenue in a recurring subscription model, and this asset gives IHS a much more comprehensive offering in the automotive information value chain. IHS shares were 1.2% higher at midday, while Polk shares had skyrocketed by 72.4%.
Travelers Companies (TRV) said it will acquire Dominion of Canada General Insurance from E-L Financial (ELFIF) as the former company seeks to expand operations outside of the U.S. The $1.1 billion deal is expected to close in the fourth quarter. Travelers shares were 0.5% lower at midday, while E-L shares were 1.9% lower.
Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.