U.S. Stocks Climb; Import Prices Fall 0.6%

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

U.S. stocks trade higher despite Moody''s downgrading of Greece''s debt rating to ""junk"" status. U.S. import prices fall 0.6% in May. BSkyB rejects News Corp.''s buyout offer. Fitch Ratings downgrades BP Plc ratings and Obama pledges to press BP Plc for swifter spill damage payments.

[R]9:35 AM New York – U.S. stocks trade higher despite Moody''s downgrading of Greece''s debt rating to ""junk"" status. U.S. import prices fall 0.6% in May. BSkyB rejects News Corp.''s buyout offer. Fitch Ratings downgrades BP Plc ratings and Obama pledges to press BP Plc for swifter spill damage payments.[/R]

Modest gains were seen across the Asian and European markets. Casey’s and FactSet quarterly profits rise.

CBOE Holdings prices IPO at high end of expectation. Lincoln National prices public offering of 12.29 million common shares at $27.25 per share.

Moody''s lowered its rating on Greece bonds to Ba1 from A3 or ""junk"" status, amid continued financial concerns for the country but offered a stable outlook. The agency said there was still ""considerable uncertainty"" regarding the impact of the Greek government''s fiscal consolidation measures.

U.S. import prices declined 0.6% in May, the U.S. Bureau of Labor Statistics reported today, after rising 1.1% in April and 0.4% in March. The decrease was led by falling fuel prices.

In contrast, the price index for U.S. exports increased 0.7% in May following increases of 1.2% and 0.7% in April and March, respectively.

CBOE Holdings, Inc. announced on Monday the pricing of its initial public offering of 11.7 million shares of the company''s unrestricted common stock at $29 per share. The company had previously expected to price the IPO of 11.7 million shares of its unrestricted common stock between $27 and $29 per share.

The company said its unrestricted common stock will begin trading on the Nasdaq on June 15 under the symbol “CBOE.”

British Sky Broadcasting Group Plc, the British satellite television company or BSkyB rebuffed the takeover offer from media conglomerate News Corp. stating the offer significantly undervalues the company.

According to BskyB, News Corp. on June 10 offered to buy the remaining shares of BSkyB not owned by it for 675 pence in cash per share, but increased the proposal to 700 pence in cash per share following discussions with BskyB. The latest proposal values the BSkyB, excluding the shares already owned by News Corp., at approximately £7.8 billion or $11.5 billion. News Corp. currently owns about 39.1% of BSkyB''s issued share capital.

However, the Independent Directors of BSkyB today have determined that they would not recommend an offer if it were made at 700 pence per share, and have indicated that they would be prepared to accept a proposal of more than 800 pence per share.

Lincoln National Corp. announced that it has priced a public offering of 12.29 million shares of its common stock at $27.25 per share.

Lincoln said it is planning to offer $335 million in its common stock and $250 million in senior notes, and intends to use the net proceeds along with cash currently held at the holding company to repurchase the $950 million preferred shares.

In addition, the company is planning for a senior notes offering of up to $500 million and intends to use the net proceeds as part of a long-term financing solution supporting universal life reserves of its insurance subsidiaries.

Fitch Ratings has downgraded BP Plc''s long-term Issuer Default Rating (IDR) and senior unsecured rating to ''BBB'' from ''AA'', respectively, and downgraded the short-term IDR to ''F3'' from ''F1+''.

The firm said, ""The scale of today''s rating action has been partly driven by the increased risk that the balance between long-term and near-term cost payments may now be skewed much more heavily towards the near-term than previously anticipated by Fitch. In particular, the recent claims by U.S. state and federal authorities that BP escrow significant sums pre-emptively, ahead of any agreed claims process, represent a material change in approach, should it ultimately prove a legally supportable move against the company.""

President Barack Obama said he plans to press BP Plc for swifter payments to those whose livelihoods have been hurt by the ongoing oil spill in the Gulf of Mexico.

Obama said that in his briefings federal officials discussed better ways to coordinate efforts to deploy booms to block the spread of the oil and to coordinate the many vessels seeking to skim oil from the surface of the Gulf.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.2270 and decreased against the Japanese yen to 91.36.

Crude oil increased $0.83 to $75.95 a barrel for a front month contract, natural gas edged higher $0.06 cent to $5.07 per mBtu and gasoline increased 1.260 cents to 208.90 cents.

Gold increased $0.90 in New York trading to close at $1,224.50 per ounce, silver closed lower $0.024 to $18.43 per ounce and copper for the front month delivery increased 0.950 cents to $3.20 per pound.

Yields on 10-year U.S. bonds increased to 3.29% and on 30-year U.S. bonds traded at 4.20%.

Stock Movers

The Hershey Company, the chocolate maker fell 0.2%

Pfizer Inc., the drugmaker rose 0.8%.

UAL Corporation, the holding company engaged in airline-related activities fell 0.09%.

Earnings Review

Best Buy Co., Inc ((BBY)), the retailer of consumer electronics reported first quarter revenues rose 7% to $10.8 billion from $10.1 billion a year ago. Net income in the quarter rose 1.3% to $155 million or 36 cents per diluted share compared to net income of $153 million or 36 cents per share a year ago. Comparable same-store sales increased 2.8%.

Casey’s General Stores, Inc ((CASY)), the convenience store operator reported fourth quarter revenues rose 33.6% to $1.18 billion from $883.4 million a year ago. Net income in the quarter rose 40.3% to $21.9 million or 43 cents per diluted share compared to net income of $15.6 million or 31 cents per share a year ago.

FactSet Research Systems Inc. ((FDS)), the financial research and analytics services provider reported third quarter revenues rose 4% to $160.3 million from $154.4 million a year ago. Net income in the quarter rose 0.3% to $38.7 million or 81 cents per diluted share compared to net income of $38.5 million or 79 cents per share a year ago.

Korn/Ferry International ((KFY)), the executive-search firm said fourth quarter revenues rose 54.7% to $177.0 million from $114.4 million a year ago. Net income in the quarter was $8.9 million or 19 cents per diluted share compared to net loss of $17.2 million or 40 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 8.04 or 0.08% to 9,887.89, Hang Seng index in Hong Kong increased 10.24 or 0.05% to 20,062.15. The FTSE Bursa KL Composite index in Malaysia closed higher 1.21 or 0.09% to 1,298.37. The markets in China were closed today.

The Kospi Index in South Korea decreased 0.57 or 0.03% to close at 1,690.03. SET index in Thailand closed higher 11.58 or 1.50% to 781.13 and JSE Index in Indonesia increased 3.34 or 0.12% to 2,830.17. The Sensex index in India increased 74.66 or 0.43% to 17,412.83.

Europe Markets Review

In London FTSE 100 Index closed higher 25.66 or 0.49% to 5,187.20, in Paris CAC 40 Index increased 26.87 or 0.74% to 3,652.91 and in Frankfurt DAX index traded higher 33.48 or 0.55% to 6,158.48. In Zurich trading SMI increased 17.54 or 0.27% to 6,489.66.