Big Deals Hold Back the Dow

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Two massive corporate deals have the Dow Jones Industrial Average (DJINDICES: ^DJI  ) near breakeven for the day despite positive economic news. As of 1:30 p.m. EDT the Dow is down 0.11% to 14,795, while the S&P 500 (SNPINDEX: ^GSPC  ) is up a modest 0.22%.

There were three U.S. economic releases today.





Markit PMI








Construction spending




The purchasing managers' indexes from both the Institute for Supply Management and Markit showed that economic activity expanded in August from July. Markit's PMI showed activity expanding at a slower rate than in July. ISM's reading showed activity expanding at a slightly faster rate than in July, with the new-orders index up nearly 5 percentage points. The only potentially worrisome sign was a large jump in respondents paying higher prices.

Source: Institute for Supply Management.

Today's other economic release was construction spending for the month of July. The Department of Commerce reported that construction spending rose 0.6% in July to a seasonally adjusted annual rate of $900 billion. That's 5% above last year and higher than June's report of flat construction spending. Analysts had expected only a 0.3% rise.

US Construction Spending Chart

US Construction Spending data by YCharts.

Labor Day deals
The big news over the holiday weekend was that Microsoft (NASDAQ: MSFT  ) announced that it will acquire Nokia's (NYSE: NOK  ) mobile business for $7.2 billion. Microsoft's stock is down nearly 6% on the news, while Nokia's stock is up 30%. Microsoft said it "aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing." Nokia's Steven Elop made a big bet on Microsoft's mobile operating system years ago. Now, as one of the main carriers of the operating system, Nokia will give Microsoft a stronger competitive foothold to compete against Apple's iOS and Google's Android operating system.

Second, Verizon's (NYSE: VZ  ) deal for Vodafone's (NASDAQ: VOD  ) 45% stake in Verizon Wireless was finally officially announced. Verizon will pay Vodafone $130 billion -- roughly $59 billion in cash and the remainder in stock -- for Vodafone's 45% stake in Verizon Wireless. For Verizon shareholders, the company seems to be making a big bet at a time when margins are at five-year highs and everything is going well. Vodafone shareholders can look forward to a large special dividend and buybacks, with the company committing to return 70% of the deal's value to shareholders.

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. To find out which of these giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate, and we'll give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2619413, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:20:38 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 hours ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 4:35 PM
^DJI $18094.83 Down -166.62 -0.91%
MSFT $56.90 Down -0.53 -0.92%
Microsoft CAPS Rating: ****
NOK $5.62 Down -0.04 -0.71%
Nokia CAPS Rating: **
VOD $29.07 Down -0.08 -0.27%
Vodafone CAPS Rating: ****
VZ $52.15 Down -0.41 -0.78%
Verizon Communicat… CAPS Rating: ****