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Midday Market Update

Stocks Slightly Higher After Data

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U.S. Market    
Stocks were above the flat line at midday following the release of several economic data reports. 

The Standard & Poor's/Case-Shiller indexes for July revealed that home prices rose by double digits year over year. The 10-city index rose by 12.3% compared with the same time last year, while the 20-city index gained 12.4%. For the one-month period from June to July, the 10-city index rose by 0.7%, seasonally adjusted, and the 20-city reading improved by 0.6%. The indexes were nearly in line with expectations, but despite the increases, the report said monthly price gains are slowing. Separately, the Federal Housing Finance Agency reported a 1% monthly increase for its July home-price index, marking a year and a half of consecutive monthly price gains. 

Meanwhile, consumer confidence for September weakened from the previous month, falling to 79.7 from August's revised reading of 81.5. The current reading was nearly in line with market forecasts, while the subindexes were mixed, with consumers expressing caution in their near-term expectations for the employment situation. 

The Dow was 0.1% higher at midday. The S&P 500 had gained 0.2%, and the Nasdaq was 0.4% higher. 

Stocks on the Move
 Telefonica (TEF) announced on Tuesday that it has reached an agreement with several other firms regarding their ownership of Telco, the controlling shareholder in  Telecom Italia (TI). The deal will allow Telefonica to acquire Class C shares without voting rights for EUR 324 million. Additionally, the firm will subscribe to 70% of Telco's bond issue for EUR 424 million, which will be paid for with existing treasury stock.  The combined deal will increase Telefonica's ownership stake in Telco to 66% while maintaining its voting rights at 46.2%. Telefonica ADR shares were 0.2% higher at midday, while Telecom ADR shares were 0.9% higher. 

 Lennar (LEN) posted a 39% increase in third-quarter profit compared with the same time last year, with net income at $120.7 million, including a tax provision. Revenue jumped by 46% to $1.6 billion, and each reading exceeded Wall Street expectations. The firm reported double-digit gains in home deliveries and average selling price. Shares were nearly 5% higher at midday. 

 Applied Materials (AMAT) announced it will acquire Tokyo Electron in a $9.3 billion deal. The two companies agreed that the new entity will have equal board representation from each previous firm, though Applied effectively will take over Tokyo's operations, with the CEO and CFO coming from Applied. The firms expect the deal to close by the second half of 2014. Applied shares had gained 7.2% by midday. 

Foreign Markets
Stocks in Asia were down, with the Shanghai Composite and the Hang Seng losing 0.6% and 0.8%. The Nikkei 225 fell by 0.1%. 

European stocks, however, were higher, as the FTSE 100, the Paris CAC, and the DAX had gained 0.2%, 0.6%, and 0.3%. 

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