U.S. stocks have slipped from the morning’s euphoric trading, when the market moved up by about 150 points following the bounce in Asian markets. The S&P 500 is now up only roughly 20 points, or 1 percent.
The U.S. stock market followed the lead from the Shanghai Composite, which closed higher by 5.8 percent, the biggest daily increase since March 2009. The buying was motivated by the Chinese police, who threatened to arrest anyone caught shorting stocks.
The market gains in the American market were trimmed as investors focused on the weekly jobless claims that reported a slight gain of 297,000, the highest level since February and inching closer to the critical mark of 300,000.
Beauty has its price — and apparently it’s $12.5 billion. Coty agreed to buy P&G’s beauty business that includes 43 brands and such famous names as Clairol hair products and Cover Girl makeup. The deal instantly turns Coty into a world leader of beauty companies, while allowing Procter & Gamble Co. to focus on household products.
Shareholders of Coty weren’t too happy with the deal and the stock dropped about 6 percent, while P&G shares rose modestly. P&G expects to get a one-time gain of $5 billion to $7 billion from the deal and Coty said the expected annual revenue of the combined company will be more than $10 billion.
In other beauty news, Avon agreed to sell its Liz Earle skin-care brand to Walgreens Boots Alliance Inc. for $215.7 million in cash. Avon had acquired the company in 2010 and it represented roughly 1 percent of the company’s revenue. It will use the proceeds to redeem $250 million 2.375 Notes due March 2016.
Same-store sales reports have been rolling in and the results are mixed. On the positive side, Buckle reported June same-store sales rose 0.5 percent versus a decline of 1.1 percent last June, lifting the stock modestly higher. Discount retailer Stein Mart reported its June sales rose 7.5 percent to $121.7 million and the shares moved slightly high on the news.
On the negative side, Zumiez said that its June sales rose 2.6 percent in June to $67 million, but the comps slipped 3.3 percent against last year’s rise of 3.1 percent, pushing the stock into negative territory. Victoria Secret’s parent L Brands also said its sales were up 3 percent for June, but analysts had expected an increase of 3.6 percent and the stock sold off almost 2 percent as a result of the disappointment.
Gap Inc. is expected to report same-store sales later in the day.