News Column

Daily Wrap: Bud buys in Budweis; Rate willies snip bonds

July 2, 2014

By Jim Gallagher, St. Louis Post-Dispatch



July 02--TODAY'S INDEXES -- Dow Industrials 16976 +20

S&P 500 1975 +1

Nasdaq 4458 -1

RATES RISE: Wall Street got a mild case of the interest rate willies today as a ADP, the private payroll company, estimated that companies added 281,000 workers this month. That fed worries that the Federal Reserve may start pushing up interest rates sooner than the markets expect.

Yield on the 10-year U.S. Treasury bond rose 0.06 percent to 2.62 percent, its second rise in two days.

It was a ho-hum day for stocks as the Dow Jones industrial average and the S&P 500 gained 0.01 percent, both setting records nevertheless. Emerging markets rose 0.8 percent.

ANALYST INSIGHT: The Dow Jones industrial average is headed above 17,000 and should end the year "several percentage points" higher, says Scott Wren, senior equity strategist at Wells Fargo Advisors in St. Louis. "Earnings are at a record high, valuations are reasonable and the global economic recovery, albeit slow, continues to rumble on," he writes, adding that the Federal Reserve seems likely to keep interest rates low for quite some time.

"This cyclical bull market, at least in our opinion, looks like it has several more years to run," he says.

BUD BUYS IN BUDWEIS: Anheuser-Busch InBev is buying a brewery in the Czech home town of the other Budweiser. A-B is buying Pivovar Samson, a brewer in the town of CeskÉ Budejovice in the Czech republic. The town, called Budweis in German, is also the home of the state-owned brewer BudejovickÝ Budvar. Both A-B and Budvar make a brew called Budweiser, and they've battled for decades over the right to use that name around the globe. Budvar says it doesn't consider the purchase a threat.

LOCAL GAINER: Traders today were betting on a takeover of Isle of Capri casinos as they bid the stock up 12 percent. Deutsche Bank analyst Caro Santarelli says Gaming & Leisure Properties could pay $15.80 for Isle of Capri, based in Creve Coeur. The stock closed Tuesday at $9.95, up 1.07.

MONSANTO GAINS ON BUYBACK: Monsanto rose $2.23, or 1.8 percent, to $126.53 after the company said late Tuesday that it had entered into an "accelerated share repurchase" agreement with JPMorgan and Goldman Sachs. Under the terms of the agreement the company will buy $6 billion of its own stock.

LOCAL INDEX: The Bloomberg St. Louis Index rose 3 to 914.

STL STOCKS GAINERS LOSERS

Isle of Capri 12.05% Allied Healthcare -4.69%

American Railcar 3.09% World Point -3.21%

Reliv International 2.56% Arch Coal -2.72%

THE DAY AHEAD: St. Louis stock jockeys will be up early tomorrow for the 7:30 a.m. release of the monthly jobs report. Economists are expecting a 215,000 number for jobs created in June, virtually the same as May's 217,000. Forecasters see the June jobless rate holding at 6.3 percent and initial unemployment claims for the latest week holding steady at at 313,000.

Jim Gallagher is a reporter for the Post-Dispatch

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(c)2014 the St. Louis Post-Dispatch

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Source: St. Louis Post-Dispatch (MO)


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