US. Stocks Track Lower Europe, Record Gold

Arthi Gupta, Mayank Mehta and Sanjay Barot
14 May, 2010
New York City

U.S. stocks decline following losses in Europe and gold surged to a record high. U.S. economic data pointed improving conditions with retail sales rising 0.4% in April. Noranda Aluminum slashes IPO by 66%. CA Inc, Nordstrom and JC Penney report higher earnings.

[R]9:45 AM New York – U.S. stocks decline following losses in Europe and gold surged to a record high. U.S. economic data pointed improving conditions with retail sales rising 0.4% in April. Noranda Aluminum slashes IPO by 66%. CA Inc, Nordstrom and JC Penney report higher earnings.[/R]

U.S. stocks decline amidst worries on global market conditions even as economic data point to economic recovery and improving profits. April retail sales rise 0.4%. CA Inc profit rose 55.4%. Nordstrom net income increases 43%.

Euro and European indices fall as the euro-zone debt woes continue and Gold reaches record levels.

Noranda Aluminum slashes initial public offering size by 66%.

The euro hit an 18-month low versus the dollar and European shares fell sharply on lingering doubts about the sufficiency of the $1 trillion package to the EU region.

Investors are seeking refuge in safe-haven currencies on decline in stock markets on debt crisis in Europe. The dollar rose to near eighteen month high against the euro, near one-year high against the Swiss franc and more than one-year high against the pound.

Gold trades at record $1,250 an ounce.

Retail sales adjusted for seasonality and calendar increased 0.4% to $366.4 billion from March and up 7.3% from a year ago. April retail sales revised rose to 2.1% from the previous estimate of 1.9%.

Noranda Aluminum Slashes IPO Price

Metals producer Noranda Aluminum Holding Corp. said that it slashed the size of its expected IPO by 66%.

Noranda is now offering 10 million shares between $8 and $9 each and raise about $85 million.

The Franklin, Tennessee based metals processor earlier said in a regulatory filing on May 10 that it hoped to sell 16.7 million shares between $14 and $16 each, raising about $250.5 million.

Noranda''s private equity owner, Apollo Management LP, had planned to offer 2.5 million shares to underwriters to cover excess demand. It now intends to keep its entire stake of 43 million shares.

Shares are expected to begin trading Friday on the New York Stock Exchange under the symbol NOR.

BofA Merrill Lynch, Morgan Stanley & Co. Incorporated, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and UBS Securities LLC acted as the joint book-running managers of the offering.



IT management software company CA Inc. said that its fourth-quarter profit increased 55% over last year, driven by higher revenues and lower restructuring expenses. Further, the company''s board has authorized the buyback of up to $500 million of its common stock.

Fashion specialty retailer, Nordstrom, Inc. said that its profit rose sharply in the first quarter as consumer spending continued to improve resulting in a 12% increase in same-store sales.

Commodities, Currencies and Yields

Dollar edged higher against euro to $1.2481 and decreased against the Japanese yen to 92.53.

Crude oil decreased $1.31 to $73.09 a barrel for a front month contract, natural gas edged lower $0.02 cent to $4.32 per mBtu and gasoline decreased 2.010 cents to 217.50 cents.

Gold increased $17.30 in New York trading to close at $1,246.50 per ounce, silver closed higher $0.141 to $19.64 per ounce and copper for the front month delivery decreased 6.250 cents to $3.16 per pound.

Yields on 10-year U.S. bonds increased to 3.49% and on 30-year U.S. bonds traded at 4.39%.

Stock Movers

CA, Inc. decreased 6.5%. The maker of software for mainframe computers said for the full year net income grew 15% to $771 million or $1.47 per share from $671 million or $1.29 per share in the prior year.

Nordstrom, Inc. fell 4.0%. The department-store chain reported first quarter net earnings of $116 million or 52 cents per diluted share for the first quarter ended May 1.

Nvidia Corporation decreased 3.7%. The maker of graphics chips reported revenue of $1.0 billion for the first quarter of fiscal 2011 ended May 2, up 2% from the prior quarter and up 51% from $664.2 million in the same period a year earlier.

Quantum Corporation rose 0.3% after the maker of backup and archival programs for computers announced that revenue for its fiscal year 2010 was $681 million, with $164 million in fiscal fourth quarter revenue.

Earnings Review

CA, Inc. ((CA)), the business software maker said fourth quarter revenues rose 7% to $1.10 billion from $1.03 billion a year ago. Net income in the quarter rose 55.4% to $101.0 million or 19 cents per diluted share compared to net income of $65.0 million or 13 cents per share a year ago.

J. C. Penney Company, Inc. ((JCP)), the department store operator chain reported first quarter sales rose 1.2% to $3.93 billion from $3.88 billion a year ago. Net income in the quarter rose 140% to $60 million or 25 cents per diluted share compared to net income of $25 million or 11 cents per share a year ago. Comparable same-store sales increased 1.3%.

Nordstrom, Inc. ((JWN)), the fashion specialty retailer said first quarter sales rose 16.4% to $1.99 billion from $1.71 billion a year ago. Net income in the quarter rose 43% to $116.0 million or 52 cents per diluted share compared to net income of $81.0 million or 37 cents per share a year ago.

Nvidia Corporation ((NVDA)), the graphics chip maker said first quarter revenues rose 50.6% to $1.00 billion from $664.2 million a year ago. Net income in the quarter was $137.6 million or 23 cents per diluted share compared to net loss of $201.3 million or 37 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 158.04 or 1.49% to 10,462.51, Hang Seng index in Hong Kong decreased 277.03 or 1.36% to 20,145.43 and CSI 300 index in China lower 18.89 or 0.65% to 2,868.02. ASX 200 index in Australia decreased 41.70 or 0.90% to 4,611.10. The FTSE Bursa KL Composite index in Malaysia closed lower 7.62 or 0.57% to 1,339.30.

The Kospi Index in South Korea increased 1.05 or 0.06% to close at 1,695.63. SET index in Thailand closed higher 2.24 or 0.29% to 768.79 and JSE Index in Indonesia increased 10.76 or 0.38% to 2,858.38. The Sensex index in India decreased 271.27 or 1.57% to 16,994.60.

Europe Markets Review

In London FTSE 100 Index traded lower 92.90 or 1.71% to 5,340.83, in Paris CAC 40 Index decreased 92.54 or 2.48% to 3,639.00 and in Frankfurt DAX index traded lower 81.68 or 1.31% to 6,170.29. In Zurich trading SMI decreased 71.38 or 1.09% to 6,503.67.