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Morning Market Roundup: Core Capital Goods Up, Markets Hopeful on Greek Deal


Here’s what’s important in the business world this morning:

Core Capital Goods: U.S. companies in October increased their orders of machinery and equipment that signal investment plans by the largest amount in five months.

The Commerce Department says that orders for core capital goods, considered a proxy for business investment, rose 1.7 percent in October, the best showing since a 2.3 percent rise in May. Orders in this category had slowed beginning in the spring, acting as a drag on overall economic growth.

Total orders for durable goods were unchanged in October at $216.9 billion following a 9.2 percent jump in September that had been driven by a surge in demand for commercial aircraft. In October, demand for machinery, primary metals and communications equipment increased while orders for autos, airplanes and computers fell.

Greece: A deal to give Greece more cash was greeted by a measure of relief in markets Tuesday, though concerns remained over the country's ability to implement its required reforms as the economy shrinks.

In Europe, the FTSE 100 index of leading British shares was up 0.4 percent at 5,808 while Germany's DAX rose 0.5 percent to 7,326. The CAC-40 in France was 0.2 percent higher at 3,509.

The main index in Athens, however, was down 1 percent as investors had hoped for a little more debt relief from the deal.

The euro also gave up some earlier gains to trade 0.4 percent lower at $1.2943.

Wall Street was poised for a flat opening as investors continue to monitor negotiations over the U.S. budget. The White House has to agree a deal with lawmakers to avoid the so-called "fiscal cliff" of automatic tax increases and spending cuts at the start of next year.

Earlier, most Asian markets posted gains. Japan's Nikkei 225 index rose 0.4 percent to close at a seven-month high of 9,423.30 while South Korea's Kospi rose 0.9 percent to 1,925.20

Hong Kong's Hang Seng lost 0.1 percent to 21,844.03. In mainland China, the Shanghai Composite Index fell 1.3 percent 1,991.16, its lowest close in nearly four years. On Jan. 23, 2009, the index closed at 1,990.66. The smaller Shenzhen Composite Index plummeted 3 percent to 765.52.

Oil prices edged higher, with the benchmark New York rate up 14 cents at $87.88 a barrel.

Congra Foods: ConAgra Foods is buying the private-label food maker Ralcorp for about $5 billion, which will make it North America's biggest manufacturer of cereals, crackers and other packaged foods sold under store brands.

The deal caps a year of acquisitions for ConAgra, which makes Banquet, Chef Boyardee and Marie Callender's. In the past year, the company also snapped up brands including National Pretzel, Bertolli frozen meals and Del Monte Canada.

ConAgra will pay Ralcorp Holdings Inc. stockholders $90 per share, a 28 percent premium to its Monday closing price of $70.23. St. Louis-based Ralcorp currently has about 55 million outstanding shares, according to FactSet.

Ralcorp's stock jumped $18.66, or 27 percent, to $88.89 in premarket trading. Shares of ConAgra gained $1.64, or 5.8 percent, to $29.93 in trading more than an hour before the market opening.

The companies value the transaction at about $6.8 billion when debt is included. ConAgra said it plans to finance the acquisition mostly with available cash, existing credit facilities and new borrowings. It expects about $225 million in cost savings on an annual basis by the fourth full fiscal year after the deal closes.

The Associated Press contributed to this report.

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