Wednesday, Sep 14, 2011
By Jonathan Cheng
U.S. stocks opened higher but pared early gains as calming developments from Europe helped investors push stocks higher for a third straight session.
The Dow Jones Industrial Average rose 16 points, or 0.1%, to 11122. The Standard & Poor's 500-stock index advanced 1 point, or 0.1%, to 1174.03 and the Nasdaq Composite added 9 points, or 0.4%, to 2541.41.
The modest advance took its cue from developments in Europe, where German Chancellor Angela Merkel rejected speculation that Greece is nearing bankruptcy, or would be forced to leave the 17-nation euro zone. That offset the effects of a widely-expected downgrade by Moody's Investors Service of two French banks.
In addition, Ms. Merkel, Greek Prime Minister George Papandreou and French President Nicolas Sarkozy will discuss the European debt crisis on a conference call later Wednesday.
The Stoxx Europe 600 tacked on 1.5%, while Germany's DAX index gained 2.7%. In Asia, the Nikkei Stock Average lost 1.1% while the Shanghai Composite gained 0.6%.
The moves came after retail sales in August came in unchanged, disappointing Wall Street expectations for a 0.3% gain, a potentially worrying sign that Americans are holding back amid high unemployment and an uncertain recovery. The previous month's number was also revised downward to 0.3%, from an original 0.5%.
Meanwhile, U.S. wholesale prices were flat last month, pointing to moderating inflation pressures and giving the Federal Reserve more leeway to try and boost the economy. Core producer prices, which strip out food and energy components, increased by 0.1%, below expectations for a 0.2% gain.
In addition to the inflation and retail sales numbers, a reading on July inventories is due out at 10 a.m., EDT.
Gold futures were down a touch at about $1,826 an ounce, as the gains in equity markets took some of the shine off the safe-haven asset. Crude-oil futures slipped below $90 a barrel. The U.S. dollar lost ground against both the euro and the yen.
In corporate news, shares of General Electric tacked on 0.5% after the blue-chip conglomerate said it would pay $3.3 billion to buy back the preferred shares held by Warren Buffett's Berkshire Hathaway.
Dell said it approved a $5 billion stock repurchase plan that is in addition to the $2.16 billion remaining from a prior buyback plan. Its shares rose 2.2%.
Elsewhere, Ralcorp slumped 9.9% after ConAgra Foods gave the private-label food company a Monday deadline to begin negotiations about the $5.2 billion bid ConAgra has made.
Jakks Pacific jumped 25% after the toy maker received a buyout bid from Oaktree Capital Management valued at $670 million.
(END) Dow Jones Newswires
September 14, 2011 09:44 ET (13:44 GMT)
