Sixth Daily Decline in U.S., World Stocks

Mayank Mehta, Arthi Gupta and Darlington Musarurwa
20 May, 2010
New York City

U.S. stock and world markets declined for the sixth day in a row as the euro zone worries stay in the focus of investors. Initial jobless claims increased 25,000. Accretive Health prices its offering below the initial range. Symantec acquires the security business of VeriSign for $1.28 billion.

[R]10:40 AM New York – U.S. stock and world markets declined for the sixth day in a row as the euro zone worries stay in the focus of investors. Initial jobless claims increased 25,000. Accretive Health prices its offering below the initial range. Symantec acquires the security business of VeriSign for $1.28 billion in cash.[/R]

U.S. stock dropped for the sixth day in a row on the lingering concerns about the crisis in Europe. Accretive Health priced its IPO below the initial filing range. Symantec acquires VeriSign''s security business for $1.28 billion in cash. Advance Auto Parts and Applied Materials net rises.

Seasonally adjusted weekly jobless claims increased 25,000 to 471,000 from the revised previous week claims of 446,000. The preliminary insured unemployment rate in the week ending May 8 was unchanged from the prior week''s unrevised rate of 3.6%.

Workers in Greece called for a total strike in opposition to the austerity measures proposed by the European Union. The markets across Asia extended their losses on the euro worries. Advance Auto Parts net income rises 17%.

Greek workers are again in the streets protesting recently approved budget cuts that were necessary for the country to receive a bailout. Greece was able to repay debt that came due Wednesday only because it had access to a rescue package from the European Union and International Monetary Fund.

The U.S. dollar traded higher against the euro and the pound but declined against the Japanese yen.

The euro fell to $1.2333, a day after touching a four-year low of $1.2146 on Wednesday.

Accretive Health Prices IPO

Healthcare revenue management company Accretive Health, Inc. said that it has priced its initial public offering of 10 million common shares at $12.00 per share, below the previous range.

On April 4, The Chicago, Illinois based company estimated to sell 13.33 million shares of common stock in the range of $14 to $16 a share.

The company today said, of the 10 million shares offered to the public, 6.67 million shares are offered by Accretive Health and 3.33 million shares are by selling stockholders.

In addition, the underwriters have a 30-day option to purchase up to an additional 1.50 million shares. Its stock is expected to begin trading on the New York Stock Exchange under the symbol AH on May 20, 2010.

Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated are joint book runners for the offering, while Robert W. Baird & Co. Inc and William Blair & Company are acting as co-managers of the offering.

Symantec Acquires VeriSign''s Security Arm

Symantec Corp. said it has signed a agreement to acquire VeriSign''s identity and authentication business for $1.28 billion in cash. The business includes the Secure Sockets Layer Certificate Services, the Public Key Infrastructure Services, the VeriSign Trust Services and the VeriSign Identity Protection Authentication Service.

The boards of both VeriSign and Symantec have unanimously approved the transaction, which is not subject to financing contingencies or shareholder approval.

Under the terms of the agreement, Symantec will purchase specific assets from VeriSign, including the majority stake in VeriSign Japan, as well as certain brands and trademarks such as VeriSign''s check mark.

Symantec expects the combination of its security solutions and widespread distribution network and VeriSign''s security products and services would enable it provide customers simple and secure access to their information from anywhere.

With more than one million web servers using VeriSign SSL certificates, and an infrastructure that processes more than two billion certificate checks daily, VeriSign has the leading share of the SSL market.

Commodities, Currencies and Yields

Dollar edged higher against euro to $1.2389 and decreased against the Japanese yen to 91.42.

Crude oil decreased $0.07 to $69.80 a barrel for a front month contract, natural gas edged higher $0.03 cent to $4.19 per mBtu and gasoline decreased 0.720 cents to 200.80 cents.

Gold decreased $2.30 in New York trading to close at $1,190.80 per ounce, silver closed lower $0.015 to $18.10 per ounce and copper for the front month delivery increased 5.200 cents to $3.01per pound.

Yields on 10-year U.S. bonds increased to 3.36% and on 30-year U.S. bonds traded at 4.23%.

Stock Movers

Applied Materials, Inc., the producer of chipmaking equipment rose 0.2%.

Autodesk, Inc., the maker of engineering-design software added 3.8%.

Dr Pepper Snapple Group, Inc., the beverage company fell 0.1%.

PetSmart, Inc., the pet-store chain fell 2.3%.

VeriSign, Inc. rose 2.9% or 83 cents to $28.82 after the operator of computers that direct Internet traffic said it has reached an agreement to sell its Authentication Services business to Symantec Corp. for about $1.28 billion in cash.

Earnings Review

Applied Materials, Inc. said that it swung to a second quarter profit, helped by strong performance of its silicon and flat panel display businesses. Advance Auto Parts, Inc. reported a first quarter profit that came in above estimates boosted by new store additions, better margins and higher sales.

Advance Auto Parts, Inc. ((AAP)), the auto parts retailer said first quarter sales rose 9% to $1.83 billion from $1.68 billion a year ago. Net income in the quarter rose 17% to $109.4 million or $1.19 per diluted share compared to net income of $93.6 million or 98 cents per share a year ago.

Applied Materials, Inc ((AMAT)) the producer of chip-making gear said second quarter sales rose 125.5% to $2.30 billion from $1.02 billion a year ago. Net income in the quarter was $264.0 million or 20 cents per diluted share compared to net loss of $255.4 million or 19 cents per share a year ago.

Autodesk, Inc. ((ADSK)), the engineering software maker said first quarter sales rose 11.5% to $474.6 million from $425.8 million a year ago. Net income in the quarter was $36.9 million or 16 cents per diluted share compared to net loss of $32.1 million or 14 cents per share a year ago.

PetSmart, Inc. ((PETM)), the pet products retailer said first quarter sales rose 5% to $1.40 billion from $1.33 billion a year ago. Net income in the quarter rose 20% to $55.6 million or 46 cents per diluted share compared to net income of $46.3 million or 37 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 156.53 or 1.54% to 10,030.31, and Hang Seng index in Hong Kong decreased 33.15 or 0.17% to 19,545.83, and CSI 300 index in China lower 36.15 or 1.31% to 2,726.02. ASX 200 index in Australia decreased 70.60 or 1.61% to 4,316.50 and the FTSE Bursa KL Composite index in Malaysia was lower 4.07 or 0.31% to 1,304.16.

The Kospi Index in South Korea decreased 29.90 or 1.83% to close at 1,600.18. JSE Index in Indonesia decreased 35.24 or 1.29% to 2,694.25. The Sensex index in India increased 90.88 or 0.55% to 16,499.37.

Europe Markets Review

In London FTSE 100 Index closed higher 31.46 or 0.61% to 5,189.54, in Paris CAC 40 Index increased 18.64 or 0.53% to 3,530.31 and in Frankfurt DAX index traded higher 0.35 or 0.01% to 5,989.02. In Zurich trading SMI increased 26.74 or 0.42% to 6,401.17.