Stocks Pare Gains on Speculation of Fed Tapering
Indications for a housing recovery were strengthened as the National Association of Home Builders said confidence in the market for newly-built single-family homes jumped in June, with its housing market index surging eight points to a better-than-expected 52. Economists, on average, were expecting an index level of 45.
"Uncertainty -- about the path of growth, inflation and the impact rising interest rates will have on the economy - is likely to prompt the Fed to dampen market expectations of an early taper," noted Drew Matus, deputy chief U.S. economist for UBS Securities in Stamford. "In our opinion the deciding factor for the timing of the initial taper will likely be the path of inflation."
Netflix (NFLX) was the biggest gaining stock in the benchmark index. Shares advanced 7.1% to $229.23 after Netflix announced its largest original content deal ever, with Dreamworks Animation (DWA). The agreement will provide viewers with more than 300 hours of new programming, with new shows inspired by characters from DreamWorks Animation's hit franchises and upcoming feature films, as well as its Classic Media library. Dreamworks shares popped 4.1% to $23.74 on the Nasdaq.
Time Warner Cable (TWC) was one of the biggest decliners on the S&P 500 after a Raymond James research note debunked rumors that Charters Communication wished to enter a merger of equals. Shares of the cable giant dropped 2.5% to $101.29.Weyerhaeuser ( WY ) was 1.6% to $28.74 after the lumber giant named Doyle Simon as its new CEO, and said it agreed to buy Longview Timber LLC for $2.65 billion from Brookfield Asset Management ( BAM ). Weyerhaeuser also said it was exploring strategic alternatives for its real estate company that could include a merger, a sale or spinoff of the business. Facebook ( FB ) rose 1.7% to $24.03 as the company gathered up the press for a major product announcement on Thursday, asking attendees to "join us for coffee and learn about a new product." Amicus Therapeutics ( FOLD ) plunged 20.4% to $2.54 after the U.S. Food and Drug Administration refused a request from the company to amend the statistical plan for a failed phase III study of its experimental Fabry disease drug Amigal. The benchmark 10-year Treasury was falling 13/32, raising the yield to 2.182%. The dollar was slipping 0.02% $80.60 according to the U.S. dollar index.
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