Corporate deals helped send stocks higher today, with the S&P 500 Index crossing the 2,000-point threshold for the first time during intraday trading.
The Dow gained 75 points, with 24 of its 30 components advancing; the S&P 500 Index added 9, closing just shy of 2,000; and the Nasdaq rose 18. Advancers led decliners by five to three on the NYSE and by nearly four to three on the Nasdaq. The prices of Treasuries strengthened. Gold futures lost $1.30 to close at $1,278.90 an ounce, and the price of crude oil fell $0.30 to settle at $93.35 a barrel.
In Other Business News:
- Sales of new single-family homes dropped 2.4% in July to a seasonally adjusted rate of 412,000, according to the Commerce Department. It was the second-straight month of falling sales, and the lowest level since March. However, a rise in the number of houses on the market and smaller price increases may boost demand in the coming months.
- Burger King’s stock (BKW) climbed 19% today on news that the company was in talks to purchase Canadian coffee and doughnut chain Tim Hortons. If the deal is successful, the combined companies will have more than 18,000 outlets in 100 countries, with $22 billion in sales. Burger King would likely move its headquarters from Miami to Canada in order to take advantage of a lower tax rate. Shares of Tim Hortons (THI) also gained about 19%.
- In additional merger news, Swiss pharmaceutical company Roche AG announced that it would purchase biotech firm InterMune Inc. for $8.3 billion, or $74 a share. InterMune produces drugs to treat lung disease, which is becoming one of the world’s largest drug markets. Shares of InterMune (ITMN) jumped 35%.
- Amazon is expected to announce they have acquired live-streaming startup Twitch for $1.1 billion after a potential deal between Twitch and Google fell through. The acquisition would be one of the largest in Amazon’s twenty-year history. Twitch launched in 2011 as a platform for individuals to broadcast and watch videogame play. Amazon’s shares (AMZN) added 0.7%.
In honor of those students whose last few moments of summer freedom are ticking away and those who have already entered the hallowed halls of learning, we sharpen our number two pencils, open our 70- page college-ruled notebooks, and dig into our Trapper Keeper folder of “Back to School Trends”:
- Mom and Dad are spending more to send kids back to school. According to the National Retail Federation (or NRF), the average family will spend $669 on their K-12 students, up 5% from last year. Retailers are picking up on this, and sales have started early this year. The problem is, however, that high schoolers don’t want to shop early. In fact, the NRF says that Millennials want to check out what everyone else is wearing before they commit to their own fashion choices, which means delaying shopping until after school starts. “Mom! I can’t buy back to school outfits until I go back to school and see what everyone else is wearing!” But parents shouldn’t feel too bad about missing back-to-school sales, though, because within a few weeks, Christmas sales should be in full gear.
- The NRF survey says that families will spend $916 on their college students, so it shouldn’t come as much of a surprise that college gift registries are in. More and more major retailers are adding the option for teens getting ready to go off to school. The Container Store said that last year college registries outnumbered wedding registries for the first time, and they make up 57% of the registries created since March. Why can’t they hit yard sales and dig up old plates, pots, pans, and furniture like we had to do in the olden days?
- Denim is dead. At least, that’s what fashion mavens and retailers are telling us after sales “plummeted” 6% last year. The hot thing now is “atheleisure,” which means leggings and fancy sweatpants. I think predicting the demise of jeans is premature, especially in the school-aged set. Speaking from experience, the average lifespan of a pair of kids’ jeans is about three to six months, and the average lifespan of leggings or sweatpants is one wear. The great thing about jeans is that the kid puts a hole in the knee and the value jumps by $20 because now they’re “distressed.” Boom. Can’t do that with sweatpants.