Housing Data Sends Markets Down
Another blow to the housing sector is sending the market tumbling this Monday. The National Association of Realtors announced that sales of existing homes dropped in July, marking the fifth straight month of declining sales, which are hitting the lowest levels in nearly five years.
To add to investor concern about the slumping housing market, home prices fell for a record 12th consecutive month.
But thanks to a multibillion-dollar deal, Home Depot is not suffering. Shares of the nation’s largest home-improvement chain rose more than 2% after the company reportedly reached an agreement to sell its wholesale distribution business to a group of private equity firms. Home Depot had to lower its asking price by $1.8 billion after a week of restructuring talks.
The company has reportedly agreed to a price of $8.5 billion in cash.
A major mover on Monday was Gateway, thanks to a $710 million buyout offer from Taiwanese computer vendor Acer. Shares of California-based Gateway soared 50% in the first minutes of trading, and the company has held on to most of those gains so far.
The deal is expected to close by December, pending regulatory approval in both Taiwan and the U.S. If it goes through, the deal would make Acer the third-largest personal computer vendor in the world.
In other deals news, Royal Dutch Shell is teaming up with 7-11 in Scandinavia. In a deal announced Monday, Shell and 7-11 will jointly operate about 270 stores in Norway, Sweden and Denmark. Investors didn’t jump on the news, and shares of Shell crept into negative territory in midday trading.