U.S. Stocks Decline; CBOE Prices IPO

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

U.S. stocks fall as retail sales decline 1.2% in May. CBOE Holdings prices IPO between $27 and $29 per share. Geithner pledges to continue trade reform pressure on China.

[R]9:35 AM New York – U.S. stocks fall as retail sales decline 1.2% in May. CBOE Holdings prices IPO between $27 and $29 per share. Geithner pledges to continue trade reform pressure on China.[/R]

U.S. stocks fell as retail sales slumped in May. Asian markets traded higher with sharp gains, but European markets plummeted on U.S. retail sales data despite an uptrend in commodity prices and the euro.

The European Central Bank''s assured that it would continue buying government bonds to contain the region''s debt crisis.

U.S. retail sales adjusted for seasonality and calendar decreased 1.2% to $362.5 billion from April and rose 6.9% from a year ago. Retail sales revised for April rose 0.4% from the previous estimate of 0.6% increase.

Treasury Secretary Timothy Geithner assured the U.S. Congress that the administration would continue to press China for trade reforms more favorable to U.S. exports.

""China has to be a key part of any strategy to increase U.S. exports and jobs,"" he said. ""Our strategy to improve the balance of benefits for Americans in this relationship focuses on change in three important areas – trade and investment policies, including China''s policies to favor domestic producers and domestic technology; economic reforms to reduce China''s reliance on exports and encourage more import growth; and exchange rate reform.""

Geithner said that one of the administration''s most important goals is to expand the opportunities for American workers to prosper through trade and investment in China. But he also said it would be ""critical"" for the Chinese to allow more flexibility in its currency.

He added, ""Right now our job is to help the private sector do what it does best. Our job is to help American businesses expand. Our job is to make sure that as China continues to develop, it does so in a way that does not disadvantage our firms.""

CBOE Holdings, Inc. disclosed in a regulatory filing that it currently estimates pricing initial public offering of 11.7 million shares between $27 and $29 per share.

According to the filing, CBOE, which was founded in 1973, was the first organized marketplace for the trading of standardized, listed options on equity securities.

CBOE Holdings filed its registration statement with the SEC for up to $300 million initial public offering on March 11, 2010.

CBOE Holdings said it is offering 9.6 million of the shares in this offering, and the selling stockholders are offering 2.08 million shares. The underwriters have the option to purchase up to an additional 1.75 million shares.

For the three months ended March 31, 2010, the company posted net income of $22.67 million and total operating revenues of $101.08 million. For the year ended December 31, 2009, the company posted net income of $106.45 million, and generated total operating revenues of $426.08 million.

The U.S. government scientists doubled their estimate of the amount of oil gushing out of the ruptured oil well. According to the U.S. Geological Survey, between 20,000 and 40,000 barrels per day of oil flowed from the well before June 3. This is higher than a May 27th estimate of 12,000 to 19,000 barrels a day, and an initial estimate of 1,000 barrels a day.

National Incident Commander Admiral Thad Allen has sent a letter on Thursday to BP Plc''s board chairman Carl-Henric Svanberg and ""any appropriate officials from BP"" to meet with senior administration officials on June 16 for discussing the oil spill issue. President Barack Obama will participate in a portion of the meeting, the letter said.

Commodities, Currencies and Yields

Dollar edged higher against euro to $1.2122 and increased against the Japanese yen to 91.70.

Crude oil decreased $0.50 to $74.98 a barrel for a front month contract, natural gas edged higher $0.06 cent to $4.70 per mBtu and gasoline decreased 0.260 cents to 206.79 cents.

Gold decreased $0.90 in New York trading to close at $1,221.30 per ounce, silver closed lower $0.184 to $18.00 per ounce and copper for the front month delivery increased 6.750 cents to $2.93 per pound.

Yields on 10-year U.S. bonds increased to 3.30% and on 30-year U.S. bonds traded at 4.21%.

Stock Movers

ArcSight, Inc. surged 10.5% after the developer of computer security software reported total revenues of $55.2 million compared to total revenues of $39.3 million reported in the fourth quarter of fiscal 2009.

Dell Inc., the maker of personal computers fell 1.9%.

National Semiconductor Corporation, the maker of analog chips climbed 3.2%.

Schlumberger Limited, the oil-services company fell 0.8%.

Earnings Review

Finisar Corporation ((FNSR)), the provider of optical subsystems and components said fourth quarter revenues rose 75.2% to $188.5 million from $107.6 million a year ago. Net income in the quarter was $14.2 million or 19 cents per diluted share compared to net loss of $25.8 million or 43 cents per share a year ago.

National Semiconductor Corporation ((NSM)), the semiconductor company said fourth quarter revenues rose 42% to $398.5 million from $280.8 million a year ago. Net income in the quarter was $79.2 million or 33 cents per diluted share compared to net loss of $63.7 million or 28 cents per share a year ago.

Thor Industries, Inc. ((THO)), the maker of recreational vehicles said third quarter sales rose 64% to $680.2 million from $415.5 million a year ago. Net income in the quarter was $34.1 million or 66 cents per diluted share compared to net income of $2.1 million or 4 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 162.60 or 1.70% to 9,705.25, Hang Seng index in Hong Kong increased 239.68 or 1.22% to 19,872.38 and CSI 300 index in China higher 8.84 or 0.32% to 2,758.87. ASX 200 index in Australia increased 70.20 or 1.58% to 4,505.50. The FTSE Bursa KL Composite index in Malaysia closed higher 3.36 or 0.26% to 1,294.67.

The Kospi Index in South Korea increased 23.64 or 1.43% to close at 1,675.34. SET index in Thailand closed higher 1.39 or 0.18% to 769.55 and JSE Index in Indonesia increased 31.11 or 1.12% to 2,801.90. The Sensex index in India increased 142.87 or 0.84% to 17,064.95.

Europe Markets Review

In London FTSE 100 Index closed higher 40.65 or 0.79% to 5,173.15, in Paris CAC 40 Index increased 24.73 or 0.70% to 3,541.37 and in Frankfurt DAX index traded higher 3.80 or 0.06% to 6,060.39. In Zurich trading SMI increased 55.21 or 0.87% to 6,431.87.