Stock market today, August 26, 2014: U.S. futures were flat this morning, a day after the S&P 500 Index cracked the 2,000 level for the first time ever and set a new all-time closing high just shy of that milestone.
Yesterday's rise was fueled by confidence in the financial and biotech sectors, which outweighed concerns about new housing sales falling to a four-month low. This morning, the U.S. Department of Commerce reported that U.S. durable goods orders spiked by a record 22.6% in July. However, that number is inflated due to a significant increase in contracts for aircraft from The Boeing Co. (NYSE: BA). Many other sectors saw a decrease in overall orders.
Here's what you should know to make your Tuesday profitable:
Merger Mania: Shares of Amazon.com Inc. (Nasdaq: AMZN) were up slightly this morning on news that the company has purchased Twitch Interactive, a live-streaming gaming network, for nearly $970 million. Twitch had been a possible acquisition target of Google Inc. (Nasdaq: GOOGL), but discussions between the two firms fell apart in recent weeks. By snatching up the video game destination, Amazon continues to evolve into more than its foundation as an e-commerce platform.
Buffett's Billions: The Wall Street Journal reports that Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK.A) will play a central role in helping fast food giant Burger King Worldwide Inc. (NYSE: BKW) in its quest to purchase the Canadian coffee chain Tim Hortons Inc. (NYSE: THI). According to the report, Berkshire will provide 25% of the deal's financing by purchasing $3 billion in preferred shares, which will help expedite regulatory approval in Canada. Shares of THI were up another 10% this morning, after the stock nearly rose 20% during yesterday's trading session. BKW stock is up more than 2% this morning. According to reports, Pershing Square Capital Management LP, the hedge fund run by Bill Ackman, made $203 million on the pending deal due to its hefty investment in Burger King.
Bad Beat: Shares of Best Buy Co. Inc. (NYSE: BBY) were down nearly 4% this morning after the company reported weaker-than-expected quarterly earnings. The company reported that revenues slipped 4% to $8.89 billion, below the consensus estimate of $8.99 from analysts. This is the third consecutive quarter that the big box retailer has missed Wall Street estimates. The company also warned that operating margins remain vulnerable in the near future due to increased discounting in Canada and China, greater sales of low-margin products, and general underperformance in the broader retail sector.
Taking Aim: In an effort to block the possible merger of Time Warner Cable Inc. (NYSE: TWC) and Comcast Corp. (Nasdaq: CMCSA), satellite-television giant Dish Network Corp. (Nasdaq: DISH) has filed a petition with the Federal Communications Commission. The company charges that the merger would cause "substantial harms" to competition and their customers. Monday was the official deadline for the FCC to receive public comments on the potential merger. More than 43,000 statements from customers and companies were filed.
Eyes on Ferguson: Shares of Digital Ally Inc. (Nasdaq: DGLY) spiked another 14% in pre-market hours in another round of heavy trading. The manufacturer of wearable cameras has tripled in August, following the fatal shooting of an unarmed African-American teenager in Ferguson, Mo. Since the shooting, public officials, anti-violence advocates, and members of the media have called on police officers to wear body cameras while on patrol, drawing attention to Digitial Ally's products and its stock. According to a recent piece in The Wall Street Journal, physical force by on-duty officers slipped 60% when they are required to wear body cameras. Yesterday, the stock increased more than 57%.
Earnings Reports: Stay tuned for earnings reports from Bank of Nova Scotia (NYSE: BNS), Bank of Montreal (NYSE: BMO), DSW Inc. (NYSE: DSW), Sanderson Farms Inc. (Nasdaq: SAFM), Trina Solar Ltd. (NYSE: TSL), Regis Corp. (NYSE: RGS), Movado Group Inc. (NYSE: MOV).
Today's Economic Calendar: Today's schedule features Durable Goods Orders, the S&P Case-Shiller Housing Index, and the Richmond Fed Manufacturing Index.
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.