Following two days of declines on Wall Street (^GSPC), investors begin the trading day with news of a surprisingly weak report on durable goods...and a mega-merger in the food industry.
The Commerce Department reporting orders for durable goods--items such as washing machines and airplanes that are expected to last several years-- fell 1.4% last month. Economists had been expecting a 0.7% increase.
Yahoo Finance's Aaron Task feels there's no way to sugar coat this one.
"There is really no way you can put lipstick on this pig," he says. "It's another piece of evidence that the U.S. economy really is struggling here in the first quarter."
And Task believes today's report could very well have an impact on when Fed Chair Janet Yellen and company finally decide to increase interest rates.
"Janet Yellen and Stanley Fischer say the Fed is going to be data-dependent," he points out. "And if they're going to be data-dependent, these numbers are telling them and telling the rest of us that a rate hike is farther off than anyone is thinking right now."
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Kraft and Heinz give investors food for thought
Meantime, investors are just sinking their teeth into the latest deal in the food space. Kraft Foods (KRFT) shares are surging in early trading as the company says it's merge with Heinz. The newly named Kraft Heinz Company will become the third-largest food and beverage operation in North America. Kraft shareholders will receive a 49% stake and special cash dividends, while current Heinz shareholders will own a 51% stake in the company.
Task says the move is indicative of what's happening in the food industry these days.
"It's one more big deal in a series of big deals," he adds. "There's been a tremendous amount of consolidation in this space. Everybody there is trying to get bigger because if you want to compete on a global stage you need these big brands."
The tech space also seeing a bit of M&A action.
Kofax (KFX) shares are soaring ahead of the open. The software developer is being bought by printer maker Lexmark in a deal valued at about $1 billion or $11 a share in cash. The deal is expected to help Lexmark (LXK) nearly double its enterprise software business.
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Sonic (SONC) shares are on the move this morning. The nation's largest drive-in chain raised its outlook for the year after reporting earnings and revenue that topped analysts' estimates. Profits nearly doubled thanks to strong same-store sales growth as the company invested on technology upgrades and continued to roll out promotions.
Related: Kraft soars on Heinz combo; Sonic delivers; Apollo falls
Apollo Education (APOL) shares are falling in early trading. The for-profit education firm issuing a disappointing sales outlook for the year after reporting weaker-than-expected revenue in its fiscal second quarter. Sales fell 14% from a year earlier as student enrollment continued to decline. However, the company's loss for last quarter was narrower than expected.
Toys "R" Us hopes play space attracts customers
Toys "R" Us plans to increase play space in stores in an effort to make its locations more engaging. The company says this move will reduce the need to compete with discount retailers on price.
Task likes the idea.
"As a parent, you would think, yeah, let's go to Toys 'R' Us-- the kids can play, we can get out of the house, it will be a different environment and hopefully they'll have fun," he says. "Then I'm sure if people do that they'll actually end up buying something, which would be good for Toys 'R' Us."
Related: Toys 'R' Us plans to add some extra fun to its stores
And Google (GOOGL) wants to help you pay your bills. The internet giant is developing "Pony Express," a project that will allow Gmail users to view and pay bills directly from their email. The service is expected to start later this year.
Related: Google to launch Gmail bill pay: Report
