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Midday Market Update

Stocks Edge Higher; Data Eyed

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U.S. Market    
Stocks pared earlier losses and were higher at midday, following several economic data reports.  

New-home sales in the United States increased by 7.9% last month from July's double-digit monthly decline. The increase was slightly head of Wall Street expectations. The data reveal that potential homebuyers were still making purchases even as mortgage rates rose during the summer months. That said, the pace of the purchases has slowed compared with the pace at the beginning of the year. 

Meanwhile, durable-goods orders exceeded expectations, rising by 0.1% in August, compared with a forecast drop of 0.6%. Aircraft orders were in negative territory for the month, but nondefense capital-goods orders excluding aircraft rose by 1.5% compared with July's reading. 

The Dow was 0.1% higher at midday. The S&P 500 was up by 0.2%, and the Nasdaq was 0.3% higher. 

Stocks on the Move
 J.C. Penney (JCP) shares were deep in the red at midday, down by more than 11%, after a leading financial-services firm gave Penney's long-term bond an underperform rating, stating Penney has weak fundamentals, along with other factors, that could negatively affect Penney's liquidity levels in the near term. 

 AutoZone (AZO) posted a 15% year-over-year gain in fourth-quarter net income, with a 12% increase in net sales. Earnings per share and revenue were slightly better than Street forecasts. The auto-parts retailer has reaped benefits from its expansion in North America. 

 Stryker (SYK) announced it will acquire Mako Surgical (MAKO) in a deal valued near $1.65 billion.  Morningstar analysts say the buyout makes a great deal of strategic sense for Stryker, and they've long speculated that one of the major orthopedic firms would acquire Mako if its robotic technology managed to make inroads with surgeons. The addition of robotic surgery and navigation technology should complement Stryker's strong franchise in knee and hip implants. Stryker shares were down by 2.1% at midday, while Mako shares skyrocketed by more than 82%. 

Foreign Markets
Asian stocks were mixed, with the Shanghai Composite losing 0.4% and the Nikkei 225 falling by 0.8%. The Hang Seng was 0.1% higher. 

In Europe, the FTSE 100 was down by 0.3%, while the Paris CAC and the DAX were flat. 

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