Avago Technologies Ltd agreed to buy Broadcom Corp for $37 billion in the biggest chip industry deal ever, creating a company that will be able to supply chips used in everything from iPhones to servers used in data centers. Avago, a maker of chips for the wireless and industrial markets, is offering Broadcom shareholders $17 billion in cash and Avago shares valued at $20 billion. The deal represents a premium of about 28 percent, according to Reuters calculations based on Broadcom's market value of $28.85 billion as of Tuesday's close, the day before the Wall Street Journal reported that the companies were in talks.
Contracts to buy previously owned U.S. homes rose for a fourth straight month in April to a nine-year high, buoying the outlook for the housing market and the overall economy. While other data on Thursday showed an unexpected increase in new applications for unemployment benefits, filings remained at levels consistent with a tightening labor market. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed last month, increased 3.4 percent to 112.4, the highest level since May 2006.
"We still think September is the best time for a rate hike, but the pace is going to be slow and methodical," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis. Wednesday was the strongest day for the S&P 500 since May 14 and the Nasdaq Composite's strongest since late January, lifting it to its first record close since April 24. At 11:47 a.m. EDT (1547 GMT) the Dow Jones industrial average was down 63.83 points, or 0.35 percent, at 18,099.16, the S&P 500 was down 7.06 points, or 0.33 percent, at 2,116.42 and the Nasdaq Composite was down 16.47 points, or 0.32 percent, at 5,090.13.
Instead, the best way to spur growth amid a severe economic downturn is to engineer temporarily higher inflation, according to the paper by St. Louis Fed President James Bullard. "In the framework presented here the forward guidance policy - promising to remain at the zero lower bound beyond the time that the zero lower bound is actually constraining - is not helpful," Bullard wrote with his co-authors, Washington University's Costas Azariadis, University of Sydney's Aarti Singh and Narodowy Bank Polski's Jacek Suda.
WASHINGTON/NEW YORK (Reuters) - Four more Swiss banks have cut deals with the U.S. Department of Justice to avoid possible prosecution for helping Americans evade taxes, the department said on Thursday.