- Phillip Pessar/Flickr
The three major stock indexes zigzagged in a tight range with no clear sense of direction today after capping off a fourth straight weekly period of gains on Friday.
First, the scoreboard:
Dow: 17,623.05, -23.65, (-0.13%)S&P 500: 2,071.18, -3.97, (-0.19%) Nasdaq: 5,034.70, +2.84, (0.06%)
And now, Monday’s top stories:
Valeant finally explained its side of the story, as the company’s executives including CEO Michael Pearson held a conference call with investors. This followed allegations, made last week in a Citron Research report, that the company used specialty pharma Philidor to inflate its revenues. CEO Pearson defended Valeant’s accounting practices, and said Philidor made up only 5.5% of its revenues. Valeant said it found no evidence of wrongdoing, and set up a committee to review the issues raised. Shares fell by as much as 13% pre-market, and closed down 5%. Bridgestone acquired Pep Boys in an $835 million deal, or $15 a share – a 23% premium over Friday’s closing share price. The auto-repair-and-tire company had been approached for acquisition by Alec Gores’ private-equity firm in 2012, but both parties abandoned that pursuit. Bridgestone, best known for its tire brands, said it would add about 800 locations to its existing 2,200. Pep Boys shares rallied by as much as 23% in trading. In economic data, new home sales fell much more than expected in September – 11.5% at an annualized pace of 468,000 (+0.6%/549,000 expected). The Census Bureau revised the data for August down to 5.2% (from 5.7%) at an annualized pace of 529,000 (from 552,000). BNP Paribas’ Derek Lindsey wrote in a client note, “The series for new home sales is quite volatile and makes up a small proportion of total home sales in the US.” The Dallas Fed manufacturing index slipped to -12.7 in October from -9.5 prior, worse than expected, as Texas factory activity rose to a nine-month high and demand remained negative. The employment index was flat, indicating no significant firing or hiring. “For the first time in a long time, we have a huge amount of uncertainty about the direction things are headed”, said one survey respondent in machinery manufacturing. Another said that uncertainty over oil prices had sent business “off a cliff”.