- Housing starts for August came in slightly higher than expected at a 1.18 million annualized rate. Single-family housing starts were a major positive in the report. Housing permits also came in much stronger than expected at a 1.3 million annualized rate and did not include any significant effects from Hurricane Harvey. The growth in permits was primarily due to multi-family homes which surged 19.6% to a 500,000 annualized rate. Housing starts for July starts were revised upward to 1.190 from 1.155 million and July housing permits were also revised to 1.230 million from 1.223 million.
- AutoZone Inc., the leading retailer of automotive replacement parts and accessories in the U.S., reported earnings of $15.52 per share, an increase of 6.5% over year-earlier earnings of $14.58 per share. The firm’s earnings topped the consensus estimate of analysts by $0.16. The company reported revenues of $3.51 billion, an increase of 3.4%. Management attributed the results to improvements in same store sales, and greater efficiencies in the firm’s inventory management and deliveries to dealers.
- S. defense contractor Northrop Grumman announced it would buy missile and rocket maker Orbital ATK for about $7.8 billion in cash (or $134.50 per Orbital share), giving it access to lucrative contracts with NASA and the U.S. Army. The deal will also help Northrop increase its arsenal of missile defense systems and is a rare departure for the company, which has not made a large acquisition in several years. The acquisition, which would establish Orbital as a new business sector under Northrop, also comes ahead of a likely jump in demand from the planned upgrades of U.S. ballistic systems. The Air Force last summer called for proposals to replace its aging nuclear cruise missiles and intercontinental ballistic missile (ICBM) system as the military moves ahead with a costly modernization of older atomic weapons systems. Orbital’s main businesses of missile defense, government satellites, and the prospect to develop an in-orbit satellite servicing business is an opportunity for Northrop. Orbital is one of two companies hired by NASA to fly cargo to the International Space Station under an initial contract worth up to $3.1 billion.