U.S. Inflation 0.1%; GE Revenue Falls

Arthi Gupta
16 Jul, 2010
New York City

U.S. stocks trade sideways after GE reported lower revenue. U.S. inflation falls 0.1% in June. Senate approves Financial Reform Bill. Goldman Sachs agrees to $550 million settlement with the SEC. BP begins well integrity test on the MC252 well. RealD prices IPO at $16 a share.

[R]9:35 AM New York – U.S. stocks trade sideways after GE reported lower revenue. U.S. inflation falls 0.1% in June. Senate approves Financial Reform Bill. Goldman Sachs agrees to $550 million settlement with the SEC. BP begins well integrity test on the MC252 well. RealD prices IPO at $16 a share.[/R]

U.S. and European markets fluctuated after GE reported revenue decline of 4% and Asian markets declined on disappointing economic data from the U.S. The Nikkei average in Tokyo trading dropped nearly 3%.

The Senate on Thursday voted 60 to 39 to pass a sweeping financial regulatory reform bill. President Barack Obama is expected to sign the bill into law next week.

""The financial industry is central to our nation''s ability to grow, to prosper, to compete and to innovate,"" Obama said, speaking on the South Lawn of the White House shortly after he returned from a trip to Michigan. ""This reform will foster that innovation, not hamper it.""

He added, ""If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy.""

The financial reform bill bans proprietary trading by banks, limits hedge-fund investment, strengthens oversight of derivatives and creates a consumer protection bureau at the Federal Reserve.

The Securities and Exchange Commission today announced that Goldman, Sachs & Co. will pay $550 million and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.

As part of the settlement, Goldman will pay $300 million in fines to the Treasury Department and about $250 million as restitution to investors.

Consumer prices decreased modestly in June, according to a report released by the Labor Department today, with a notable decrease in energy prices.

The report showed that consumer prices fell 0.1% in June following a 0.2% drop in May and a 0.1% decline in April.

Core prices, which exclude food and energy prices increased 0.2% in June after edging higher 0.1% in May.

BP plc reported today that the damaged MC252 well remains shut-in with no oil flowing into the Gulf of Mexico.

BP plc said the well integrity test on the MC252 well started last night will last at least 6 hours and could last up to 48 hours. During the test, the three ram capping stack is closed, effectively shutting in the well and all sub-sea containment systems have been temporarily stopped. Although it cannot be assured, it is expected that no oil will be released to the ocean during the test. Even if no oil is released during the test, this will not be an indication that oil and gas flow from the wellbore has been permanently stopped.

During the well integrity test, operations on the first relief well have been temporarily stopped while the well was at 17,840 ft as a precaution. Operations on the second relief well have been temporarily suspended at 15,874 feet to ensure that there is no interference with the first relief well. The relief wells remain the sole means to permanently seal and isolate the well.

RealD Inc. announced the pricing of its initial public offering of 12.5 million common shares at $16.00 per share. The company seeks to raise $200 million from this offering. The shares are expected to begin trading on the New York Stock Exchange under the symbol ""RLD"" from July 16.

RealD stated that it is offering 6 million shares and selling stockholders are offering 6.5 million shares. The company intends to use a portion of the net proceeds from this offering to repay debt.

For the offering, J.P. Morgan Securities Inc. and Piper Jaffray & Co. are acting as joint book-running managers, while William Blair & Co., L.L.C. is acting as co-lead manager, and Stifel, Nicolaus & Co., Inc. and BMO Capital Markets Corp. are acting as co-managers.