Home Sales and Consumer Spending Send Stocks Higher: Monday Recap

Stocks advanced on Monday. The Federal Reserve Bank of Dallas reported that its production index, a key measure of state manufacturing conditions and in used to gain insight into broader economic conditions, fell from 9.9 to -0.5 in April, indicating that output did not change much on the month. Notably, expectations for future business activity declined to its first negative reading in five months.

DJIA: +0.72% to 14,818.80 S&P 500: +0.72% to 1,593.61 NASDAQ: +0.85% to 3,307.02
Gold: +$19.10 to $1,472.70 per ounce Oil: +$1.36 to $94.36 per barrel U.S. 10-Year: +0.003 points to 1.668%

Higher Incomes Are Helping Out the American Consumer: The Commerce Department said Monday that consumers spending increased 0.2 percent in March, following a 0.7 percent jump in February and 0.3 percent gain in January. Analysts had expected just a 0.1 percent rise. Personal income increased 0.2 percent last month, a slightly softer result than forecast. In February, the measure rose 1.1 percent… (Read more.)

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Should Central Banks Buy Stocks? Central banks such as the Federal Reserve and the Bank of Japan have been trying to create a wealth effect by injecting record amounts of liquidity into the financial system. By punishing savers through low interest rates, they hope to force more people into riskier assets such as stocks that offer a higher rate of return. As asset prices rise, the belief is that consumer spending and confidence will follow. However, loose monetary policies also appear to be affecting central banks… (Read more.)

European Economic Sentiment Slides As Recovery Stalls: Data released on Monday add to a growing body of evidence that suggest that the euro zone may be further from a recovery than some had expected. The Economic Sentiment Indicator, compiled by the European Commission, decreased by 1.5 points in the EA17, and decreased by 1.8 points in the EU27, trending well below the long-term average… (Read more.)

Here’s your Cheat Sheet to today’s top stock stories:

Herbalife (NYSE:HLF) closed the day up 1.25 percent but edged fractionally lower in post-market trading. The nutritional-supply company posted net income of $1.10 per share on revenue of $1.1 billion, just ahead of expectations. The company also raised its 2013 earnings forecast from a range of $4.45 to $4.65 to a range of $4.60 to $4.80 per share.

Deutsche Bank (NYSE:DB) closed the day up 3.74 percent. The bank posted first-quarter 2013 net income of 1.71 euros per share ($2.24) on net revenues of 9.4 billion euros ($12.3 billion). Analysts were looking for earnings of just 1.32 euros per share on revenue of 9.07 billion euros.

Sina Corp. (NASDAQ:SINA) closed the day up 9.4 percent. The Chinese media company announced that it has reached an agreement with Alibaba Group. Alibaba will invest $586 million in the company in exchange for an 18 percent stake.

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Tenet Healthcare (NYSE:THC) ended the day up 6.51 percent. Robert W. Baird upgraded its rating on the stock from Neutral to Outperform and increased its price target from $44 to $51.

JPMorgan (NYSE:JPM) announced on Sunday that Frank Bisignano, co-Chief Operating Officer, is leaving the company effective immediately in order to assume the role of Chief Executive Officer at First Data Corp., a payment-processing company. Matt Zames, the other co-COO, will become sole COO effective immediately.

Bayer AG (BAYZF.PK) announced on Monday morning that it has signed a merger agreement with Conceptus (NASDAQ:CPTS), a California-based healthcare company most known for Essure, a permanent birth-control system. The transaction values Conceptus at about $1.1 billion, or $31.00 per share, a 20 percent premium on Friday’s closing price. The deal is still subject to anti-trust approval in the U.S.

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