Stocks opened lower as concerns over Italy caused investors to be cautious at the outset. While European markets have lagged, the U.S. indexes saw their lows a short time after the open and began to drift higher. In the second hour of trading the averages crossed into positive ground and gained upside momentum. The gains have been modest, but are broad-based. ECONOMIC EVENTS: In the U.S., personal income and spending each rose 0.3% in August, tracking estimates. The Chicago PMI fell 3.2 points to 60.4 in September, which was weaker than expected. The University of Michigan consumer sentiment reading for September was downwardly-revised to 100.1 from a 100.8 flash figure, but the final 100.1 is up 3.9 points from the 7-month low of 96.2 in August. In Europe, Italy's populist government agreed to a budget which sets next year's deficit at 2.4% of GDP, which is concerning those who had been looking for a deficit figure below 2%. COMPANY NEWS: Shares of Tesla (TSLA) are down 11% near midday following news that the U.S. Securities and Exchange Commission is suing Chief Executive Officer Elon Musk for securities fraud. The SEC said it was suing Musk over his August tweet saying that he was "considering taking Tesla private at $420" and already had "funding secured." The SEC noted in its suit that "Musk knew or was reckless in not knowing that each of these statements was false and/or misleading." The agency added that its complaint seeks a bar prohibiting Musk from serving as an officer or director of a public company. In response, the Tesla CEO called the SEC action "unjustified" and said he has "always taken action in the best interests of truth, transparency and investors"... In other SEC news, Walgreens Boots Alliance (WBA) reached an agreement with the regulator to resolve an investigation into forward-looking financial goals and related disclosures made by Walgreen Co. when it entered into a merger with Alliance Boots in 2012. Under the terms of the pact, the company will pay a $34.5M penalty to the SEC... In an open letter posted to the company's website, Intel (INTC) CFO and Interim CEO Bob Swan stated that the first half of this year "showed remarkable growth" for the industry and that "supply is undoubtedly tight, particularly at the entry-level of the PC market." The company continues to believe it will have at least the supply to meet the full-year revenue outlook announced in July and is investing "a record $15B in capital expenditures in 2018, up approximately $1B from the beginning of the year," to address the supply issues. Swan added that the company is making progress with 10nm, "yields are improving" and Intel still expects volume production in 2019. Following the news, Intel shares are up 4% while shares of competitor AMD (AMD) are down 6%. MAJOR MOVERS: Among the noteworthy gainers was Ocwen (OCN), which rose 5% after its pending acquisition of PHH Corporation (PHH) received all regulatory approvals. Shares of PHH were 2% higher after the news. Also higher was BlackBerry (BB), which gained 15% after reporting quarterly results. Among the notable losers was Applied Optoelectronics (AAOI), which fell 14% after it cut its third quarter revenue view due to an issue with a "small percentage" of 25G lasers within a specific customer environment. Also lower was J.C. Penney (JCP), which slid nearly 7% after chief financial officer Jeffrey Davis announced his resignation from the company to become CFO of Qurate Retail Group (QRTEA). The resignation follows the departures of the company's former CEO and chief customer officer earlier this year. INDEXES: Near midday, the Dow was up 45.23, or 0.17%, to 26,485.16, the Nasdaq was up 10.32, or 0.13%, to 8,052.29, and the S&P 500 was up 2.90, or 0.10%, to 2,916.90.
