Stocks flat
The Russell 2000 (NYSE: IWM) is down but the Dow Jones Industrial Average (DJI) is in positive territory following news of mixed U.S. economic data. At 12:04 p.m. ET the Russell 2000 was down 3.23 points, or 0.38%, to 851.95. The Dow had added 19.26 points, or 0.14%, to 13,880.99.
Shares of Idenix Pharmaceuticals, Inc. (Nasdaq: IDIX) are among the major losers, down $2.05, or 35%, to $3.74, on news the Cambridge, Mass.-based company is putting on hold the development of its hepatitis C drug. Discussions with the U.S. Food and Drug Administration have led to the conclusion that the overall risk/benefit profile of the drug valopicitabine does not justify further research, Idenix said before the start of trading.
Cheraw, S.C.-based Great Pee Dee Bancorp Inc. (Nasdaq: PEDE), the holding company for Sentry Bank & Trust, is merging with First Bancorp. First Bancorp, the holding company for First Bank, will pay a total of $38.2 million, or $21.02 per share, according to a joint announcement after Thursday’s close. The deal is expected to close late in the fourth quarter of 2007 or in early 2008. Shares are up $4.50, or 29%, to $20.00.
Atlanta-based consumer products company Spectrum Brands Inc. (NYSE: SPC) lowered its expected full year 2007 sales forecast to $2.63 billion from a previous projection of $2.65 billion, it said after Thursday’s close. Six analysts polled by Thomson Financial were looking for revenues of $2.04 billion. The company blamed lower than expected battery sales in Europe and dry weather in much of the United States, which had a negative impact on its Home & Garden business. Spectrum Brands was formed through the sale of St. Louis-based United Industries to Atlanta-based Rayovac Corp. for $1.5 billion in Feb. 2005. The stock is down $0.37, or 6%, to $5.77.
In economic news, the U.S. Commerce Department reported that June retail sales fell 0.9%, the most in almost two years. Economists were forecasting a drop of 0.1%. Retail sales added 1.5% in May.
On Thursday, retailers surprised many by announcing generally positive June same-store sales, leading to a rally.
“People were looking for any upside,” said Patrick McKeever, a senior research analyst with investment bank Avondale Partners, LLC, when asked to explain Thursday’s bullish sentiment.
“There was a lot of concern about the month, but the numbers were not as bad as anticipated and included some surprises,” McKeever added.
What about July?
“July is a clearance month,” said McKeever. “But despite that, I expect it will be better than June, but only slightly.”
Elsewhere, import prices rose 1% in June, the fifth consecutive monthly increase, the Labor Department said. Economists were projecting a rise of 0.6%. Higher fuel costs are largely to blame, as well as robust worldwide economic growth.
Import prices have added 2.3% on a year-over-year basis.
The good news this morning came in the form of the monthly University of Michigan consumer sentiment index, which rose to 92.4 in July from 85.3 in June. Observers were calling for it to climb to 86.
