Jobs Data Lift U.S. Indexes

Arthi Gupta, Mayank Mehta and Sanjay Barot
03 Jun, 2010
New York City

U.S. and world markets gain as improving economic data boosts investor confidence. U.S. private sector employment increases by 55,000 jobs in May and initial jobless claims falls by 10,000 to 453,000 for the week.

[R]10:15 AM New York – U.S. and world markets gain as improving economic data boosts investor confidence. U.S. private sector employment increases by 55,000 jobs in May and initial jobless claims falls by 10,000 to 453,000 for the week.[/R]

U.S. productivity rises 2.8% in the first quarter. SonicWALL enters into merger agreement with Thoma Bravo led group for $11.50 per share cash. Nielsen Holdings files for $1.75 billion IPO.

Private sector employment increased for the fourth consecutive month in May, according to a report released by Automatic Data Processing, Inc. today. The report showed that non-farm private employment increased by 55,000 jobs in May following an upwardly revised increase of 65,000 jobs in April.

The number of people filing first-time unemployment claims edged down last week. Initial jobless claims fell by 10,000 to 453,000 for the week, according to a report issued by the U.S. Department of Labor.

Continuing claims, a statistic that measures the number of people receiving ongoing unemployment help, edged up to 4.666 million.

Nonfarm business sector labor productivity increased at a 2.8% annual rate during the first quarter of 2010. Compared to the first quarter of 2009, productivity rose 4.0%. Labor costs dropped 4.2% and unit labor cost fell to 1.3% in the last four quarters.

SonicWALL, Inc., the network security solutions provider agreed to be taken private by a consortium led by Thoma Bravo, LLC for $11.50 per share in an all-cash deal valued at about $717 million. The deal is unanimously approved by SonicWALL board and recommended to its shareholders for approval.

SonicWALL''s president and chief executive officer, Matthew Medeiros said, ""Our agreement with Thoma Bravo represents an attractive valuation for our shareholders, and we look forward to closing the transaction as quickly as possible. A partnership with Thoma Bravo will strengthen our focus on delivering the most advanced and highest quality solutions to our customers.""

The offer price of $11.50 in cash represents a premium of about 28% over SonicWALL''s closing price of $8.99 on Wednesday, and a 63% premium over its enterprise value. SonicWALL noted that the deal, which is subject to customary closing conditions, including requisite regulatory approvals and approval of SonicWALL shareholders, is not subject to a financing condition.

For SonicWALL, Centerview Partners LLC served as exclusive financial adviser for the deal and provided a fairness opinion to its board, with Fenwick & West LLP providing legal counsel. Meanwhile, Kirkland & Ellis LLP provided legal counsel to Thoma Bravo.

SonicWALL, Inc. ((SNWL)) increased $0.27 or 3.10% and closed Wednesday''s regular trading session at $8.99. In the past 52-week period, the stock has been trading in a range of $5.09 to $11.00.

Nielsen Holdings B.V., a global information and measurement company, filed with the U.S. Securities regulator for an initial public offering of up to $1.75 billion of common stock.

The company neither disclosed the number of shares to be offered, nor details about its price range. The company also did not disclose details in which exchange it plans to list or intended symbol.

The Nielsen Company B.V., formerly VNU, was purchased on May 24, 2006 in a $10 billion deal by a consortium of private equity firms, AlpInvest Partners, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co. and Thomas H. Lee Partners.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.2288 and increased against the Japanese yen to 92.66.

Crude oil increased $0.72 to $73.58 a barrel for a front month contract, natural gas edged higher $0.04 cent to $4.47 per mBtu and gasoline increased 1.870 cents to 204.48 cents.

Gold decreased $2.00 in New York trading to close at $1,220.60 per ounce, silver closed higher $0.055 to $18.37 per ounce and copper for the front month delivery increased 0.350 cents to $3.04 per pound.

Yields on 10-year U.S. bonds increased to 3.38% and on 30-year U.S. bonds traded at 4.27%.

Stock Movers

CBS Corporation, the mass media company fell 0.8%.

Cephalon, Inc. gained 3.6%. The biopharmaceutical company announced that the primary endpoint was not met in a Phase II clinical trial that examined NUVIGIL® (armodafinil) Tablets [C-IV] as an adjunctive therapy for the treatment of the negative symptoms of schizophrenia.

Palm, Inc., the smartphone manufacturer fell 0.1%.

Earnings Review

Coldwater Creek Inc. ((CWTR)), the women''s clothing chain said first quarter sales rose 6.4% to $243.1 million from $228.4 million a year ago. Net income in the quarter was $2.3 million or 3 cents per diluted share compared to net loss of $7.6 million or 8 cents per share a year ago.

Copart, Inc. ((CPRT)), the vehicle seller said third quarter revenues rose 11.7% to $220.3 million from $197.3 million a year ago. Net income in the quarter rose 5.5% to $44.4 million or 52 cents per diluted share compared to net income of $42.1 million or 50 cents per share a year ago.

Exide Technologies ((XIDE)), the battery manufacturer said fourth quarter sales rose 9% to $714.7 million from $654.3 million a year ago. Net income in the quarter was $40.4 million or 53 cents per diluted share compared to net loss of $64.4 million or 85 cents per share a year ago.

Hovnanian Enterprises, Inc. ((HOV)), the homebuilder said second quarter revenues fell 20% to $318.6 million from $398.0 million a year ago. Net loss in the quarter was $28.6 million or 36 cents per diluted share compared to net loss of $118.6 million or $1.50 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 310.95 or 3.24% to 9,914.19, Hang Seng index in Hong Kong increased 314.91 or 1.62% to 19,786.71 and CSI 300 index in China lower 21.45 or 0.78% to 2,736.08. ASX 200 index in Australia increased 105.00 or 2.40% to 4,486.00. The FTSE Bursa KL Composite index in Malaysia closed higher 18.42 or 1.44% to 1,294.44.

The Kospi Index in South Korea increased 31.44 or 1.93% to close at 1,661.84. SET index in Thailand closed higher 16.28 or 2.17% to 765.96 and JSE Index in Indonesia increased 77.30 or 2.83% to 2,810.98. The Sensex index in India increased 280.49 or 1.68% to 17,022.33.

Europe Markets Review

In London FTSE 100 Index closed higher 91.82 or 1.78% to 5,243.14, in Paris CAC 40 Index increased 77.89 or 2.22% to 3,579.39 and in Frankfurt DAX index traded higher 100.66 or 1.68% to 6,081.86. In Zurich trading SMI increased 86.69 or 1.36% to 6,455.50.