How will this week's economic reports impact Wall Street in shortened trading week? Read about this and more of the day's top business news stories.
Existing U.S. Home Sales Reach Four-Year High
The National Association of Realtors announced Monday that pending sales of previously-owned U.S. homes climbed 6.1 percent in May, the biggest advance since April 2010, Bloomberg reports.
Volatility Expected in Short Trading Week
The second half of the year is expected to kick off on a volatile register, as Wall Street and investors prepare to parse a blitz of reports, Reuters forecasts. Financial markets will be closed on Friday for the Fourth of July, so Thursday will bring the nonfarm payroll figures for June, one of the month’s most closely-watched reports. Also that day will be released the trade deficit and the Institute for Supply Management’s index on the services sector. On Wednesday, U.S. Federal Reserve Chair Janet Yellen is scheduled to address the International Monetary Fund conference about financial stability. It’s been a good 2014 thus far, Reuters reports. The S&P 500 has climbed 6.1 percent this year, following a jump of 30 percent in 2013. If the market closed the year at current levels, it would mark the best three-year run for U.S. stocks since the 1997-1999 period.
Sorry Critics: Transformers Franchise Nowhere Near “Extinction”
“Transformers: Age of Extinction” was not only America’s No. 1 film at the box office over the weekend, it became the first summer-released film to crack the $100 million benchmark in its opening weekend. This despite a running time of 165 minutes and savage reviews of the fourth film in the seemingly indestructible franchise directed by Michael Bay. There was an abyss between how the critics and the public regarded the film. It scored just 17 percent on the review aggregate website Rotten Tomatoes. But moviegoers gave it an A-minus with CinemaScore pollsters. Sequels helped to round out the top 5 at the box office with “22 Jump Street,” “How to Train Your Dragon 2,” and “Think Like a Man Too” coming in at second, third and fourth. “Maleficent” came in fifth.
Philips to Separate Its LED Division
Royal Philips NV announced Monday it plans separate its fast-growing LED parts business into a separate company, The Associated Press reports. The separation, which the world’s largest lighting producer forecasts to be complete by early next year, is intended to capitalize as manufacturers integrate LED lights into an ever-widening array of products. Philips executive Pierre-Yves Lesaicherre, who currently heads the parts division, will remain as CEO of the new company, the AP states. It is not yet clear whether the new division will seek a separate listing or remain within Philips before it is sold. Philips, as well as other manufacturers such as General Electric, saw sales of their LED bulbs, which can be programmed to emit light of different colors and require less energy than traditional lights, surge well above double digits last year.
GM to Announce Victim Compensation Plan
General Motors is expected to announce Monday the terms of the automaker’s plan to compensate victims of crashes caused by its cars faulty ignition switches. Compensation expert Kenneth Feinberg will reveal the terms of the payments. GM CEO Mary Barra has said there will be no cap. Payments are expected to be into the millions, if not billions of dollars. The faulty switches were responsible for at least 54 crashes and more than 13 deaths, the company says, but lawyers and lawmakers put the death toll at closer to 100. As of March 31, GM was sitting on a $27 billion cash stockpile. It has announced or taken charges of $2 billion for recall expenses, The Associated Press reports. GM has said Feinberg would start taking claims Aug.1
Olympics Take the Gold in Advertiser Spending
Total ad spending rose 5.7 percent in the first quarter of 2014 to $39.9 billion, USA TODAY reports from a report issued by Kantar Media. The Winter Olympics, alone, was responsible for $600 in incremental ad spending, the report estimates. With the Sochi Games, ad spending would have increased less than 4 percent. Television advertising was the big winner. Network TV increased 14.5 percent with about one-half of this growth coming from the Winter Olympics. Super Bowl spending also contributed to the increase. Cable TV spending jumped 6.2 percent for the quarter. Spending from the 10 largest advertisers in 2014’s first quarter surged 14.1 percent to $4.4 billion, an aggregate gain of $540 million vs. the same period last year.