MIDDAY LUNCH

Dow 10537.71  -46.25, Nasdaq 2301.74  -6.68, S&P 1132.09  -0.90 

Kraft to Sell Pizza Biz.  Kraft (KFT) 28.29, +0.86 announced that it will sell its North American pizza business to Nestle so that it can offer cash as part of its bid for Cadbury (CBY) 49.80, -1.85.  Additionally, Kraft's proposal to issue additional stock to help facilitate an acquisition of Cadbury was voted against by Warren Buffett and Berkshire Hathaway (BRKB) 3317.55, +6.55, which owns more than 9% of Kraft's outstanding shares. Warren Buffet said “Kraft stock, at its current price of $27, is a very expensive ‘currency’ to be used in an acquisition.” 

Strength in the shares of chemical manufacturers has helped prop up the materials sector, which currently sports a +0.5% gain. Momentum from the previous session made the sector an early leader.

Financials have been a key source of support this session. The sector is currently up +1.0% amid strength in diversified banks +2.0%. Regional banks have lagged +0.4%, though.

Economic reports are mixed today. November Factory Orders came in at +1.1% to $365.3 bln vs. the +0.5% consensus, the seventh uptick in the last eight months; Oct was revised up to +0.8% from +0.6%.

November Pending Home Sales came in at -16.0% month-over-month vs. the -2.0% consensus, Oct was revised up to +3.9% from +3.7%. The Nov reading broke a nine-month streak of increases in pending home sales. With the Fed due to end its purchases of MBS by the end of Q1, and the tax credit due to expire April 30, the reports on housing in coming months will be increasingly important.