(August 28 – 09:10 ET) – U.S. personal income grew 0.3% last month,
slightly lower than most economists’ predictions. Spending grew by 0.6%, slightly faster than expected and indicating it’s running at twice the rate of income improvements. As a result, the personal savings rate slipped to -0.2%, the lowest monthly rate ever.
While the report is slightly bearish, there is no prospect of Fed action for months so it will be largely ignored by the market.
In Europe, stocks are mixed and barely moving, with anticipation building for a 25-basis-point hike on the continent later this week. The FTSE is up seven points to 6563. The CAC 40 is down 21 points to 6574 and the DAX is ahead 18 points to 7325.
It’s also another Merger Monday. VoiceStream Wireless Corp., the cell-phone company being bought by Deutsche Telekom AG, has agreed to buy Powertel Inc. for about US$7.2 billion in stock and assumed debt. And SBC Communications Inc. will sell the leasing rights to 3,900 wireless-communications towers to SpectraSite Holdings Inc. for US$1.31 billion in cash and stock.
French computer services firm Atos SAis buying Royal Philips Electronics NV’s Origin unit for about US$2.4 billion in stock. Applied Micro Circuits Corp. is buying microprocessor designer MMC Networks Inc. for about US$4.5 billion in stock.
In Asia, stocks were mixed, although the Nikkei did break the 17000 mark, finishing up 270 points to 17181. The Hang Seng fell 217 points to 17019.
In other business news, PanCanadian Petroleum Ltd. will buy the exploration, production, midstream and marketing division of Montana Power Co. for US$475 million. And Husky Energy said its deal with Renaissance Energy is complete.
Alliance Atlantis Communications Inc. is reporting net earnings for the first quarter of 10¢ a share, down from 18¢ in the same period a year earlier.
Certicom Corp. reports a first-quarter loss of $3.4 million, or 13¢ a share — excluding $3.3 million of non-cash charges related to goodwill, amortization and one-time non-cash interest expense — vs a 9¢ loss a year earlier. Including goodwill and amortization, the net loss was 26¢ compared with 17¢ last year.