Wall Street in Volatility Mode
The swings in U.S. stock prices are getting wider as Wednesday's Fed policy statement approaches. The Dow has now had five straight triple-digit moves for the first time since October 2011, while the S&P has had an average daily move of nearly one percent during that time. The Fed's two-day meeting begins today with investor anxiety over the future of quantitative easing likely to grow until the Fed statement. Monday's gains for the Dow and the S&P 500 were enough to put them back in positive territory for June.
Investors will have two economic reports to ponder before the opening bell, with May housing starts and consumer prices both out at 8:30 a.m. ET. Economists look for an 11.4 percent increase in housing starts to an annual rate of 950,000 units, while consumer prices are expected to rise 0.2 percent for both the headline number and the "core" rate, figured without food and energy. Consumer prices had fallen 0.4 percent in April.
Financial information provider FactSet (FDS) is among the few companies set to release earnings this morning, while software maker Adobe Systems (ADBE) and furniture company La-Z-Boy (LZB) are set to issue quarterly numbers after today's closing bell.
Smithfield Foods (SFD) is among our stocks to watch, with the pork producer saying it will study the letter sent by major shareholder Starboard Value earlier in the day. That letter proposed a breakup of the company, saying it yielded far more value than the $34 per share buyout deal struck with China's Shuanghui Holdings.
Sony (SNE) is also on the watch list, with hedge fund operator Third Point raising its stake to 7 percent from about 6.3 percent. Third Point also asked for the chance to present its case for a spinoff of Sony's entertainment unit to the board of directors.
Boeing (BA) has formally launched a new version of its Dreamliner, the 787-10, and announced commitments for 102 of the jets from five customers including United Airlines.
Host Hotels (HST) has increased its quarterly dividend by one cent to eleven cents per share, payable July 15 to stockholders of record on June 28.
Sprint Nextel (S) sued Dish Network (DISH) to block Dish's bid for Clearwire (CLWR). The suit claims Dish is trying to coerce Clearwire shareholders into tendering their shares. Sprint has a competing bid to buy the nearly half of Clearwire that it doesn't already own. The suit comes as Dish competes with Japan's Softbank to buy Sprint.
Yahoo (YHOO) is having an active week pursuing acquisitions, according to All Things D, which reports Yahoo is offering to buy address book app maker Xobni for up to $40 million, and is also considering a $50 million offer for automated video app maker Qwiki.
Rambus (RMBS) raised the bottom end of its second quarter revenue forecast, and the chipmaker also announced a license agreement with STMicroelectronics (STM) that resolves all litigation between the two.
Valeant Pharmaceuticals (VRX) will sell $1.75 billion in common stock, using the proceeds for its $4.5 billion acquisition of Bausch & Lomb.
Office Depot (ODP) will hold its annual meeting on August 21. The office supplies retailer set the date after being sued by shareholder Starboard Value (see Smithfield story above) for not holding one over the past year to elect directors.