U.S. Stocks Rise; Geely, Ford Deal

Arthi Gupta
02 Aug, 2010
New York City

U.S. stocks gain after better-than-estimated earnings. BP establishes $100 million fund and prepares to permanently seal leaking oil well. Geely completes the purchase of Volvo Car Corp. for $1.8 billion. The UAE joins Bahrain and India and may suspend BlackBerry messaging services from October.

[R]9:35 AM New York – U.S. stocks gain after better-than-estimated earnings. BP establishes $100 million fund and prepares to permanently seal leaking oil well. Geely completes the purchase of Volvo Car Corp. for $1.8 billion. The UAE joins Bahrain and India and may suspend BlackBerry messaging services from October.][/R]

U.S. stocks advanced after strong earnings. Asian markets rose after encouraging earnings trends from Japan. European markets surged after BNP Paribas and HSBC reported positive results.

The China Federation of Logistics and Purchasing said that the country''s official purchasing managers'' index declined to a 17-month low in July to 51.2 from 52.1 reported for June.

Humana Inc.''s second-quarter total revenue for the second quarter rose 9.5% to $8.65 billion from $7.90 billion in the comparable period. Net income grew 20.7% to $340.08 million or $2.00 per share from $281.78 million or $1.67 per share last year.

Loews Corp. said second-quarter revenues declined 9.3% to $3.475 billion from $3.831 billion in the prior-year quarter. Net income increased 7.6% to $366 million or 87 cents per share, up from $340 million or 78 cents per share in the 2009 second quarter.

BNP Paribas, the French bank reported a 31% rise in profit for the second quarter on a 12% growth in revenues.

BP announced establishing a $100 million charitable fund to support unemployed rig workers experiencing economic hardship as a result of the moratorium on deepwater drilling imposed by the United States federal government.

The Rig Worker Assistance Fund will be administered through the Gulf Coast Restoration and Protection Foundation, a supporting organization of The Baton Rouge Area Foundation.

BP is gearing up to begin sealing the broken Maconda well in the Gulf of Mexico either tonight or tomorrow. Mud will be injected into the well to overpower the pressure from huge oil and gas reserves beneath the sea, allowing engineers to plug the well.

The process, known as ""static kill"" is a precursor to the final solution of a relief well, which BP has almost completed and is expected to have up and running by the middle of the month.

National Incident Commander Thad Allen told reporters Sunday that the latest attempt to seal the well would depend on results of ongoing tests. He also warned that the static kill “is not the end-all, be-all,"" suggesting there is much work to be done before the disaster is over.

Zhejiang Geely Holding Group Co., Ltd., the Chinese carmaker said it has completed the acquisition of Volvo Car Corp. from Ford Motor Co. for $1.8 billion.

The deal value included a $200 million note with the balance paid in cash. Geely issued the note and paid $1.3 billion in cash for Volvo Cars, utilizing financing from Chinese institutions and its own balance sheet as well as international capital market resources.

Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium. Furthermore, Geely stated as part of the deal, Volvo and Ford will maintain close component and supply relationships.

The company also said Stefan Jacoby, the Chief Executive of Volkswagen Group of America would become President and Chief Executive Officer of Volvo Cars, while Hans-Oskarsson, Deputy Chief Financial Officer will become acting CFO of Volvo Cars, replacing Stuart Rowley.

United Arab Emirates plans to suspend some Blackberry mobile services from October this year. The state news agency WAM quoted the country''s telecoms regulator TRA as saying that the devices, manufactured by Research in Motion could pose threat to national security since data is immediately exported offshore and managed by a foreign commercial organization.

TRA Director General Mohammed al-Ghanem said that the authorities are in discussion with Research in Motion Inc, the maker of Blackberry regarding suspension of messaging and Internet browsing services from October 11 since they lack compliance with the Gulf country''s telecommunications regulations.

India and Bahrain also had raised security concerns over Blackberry data services. Messages sent using Blackberry are encrypted and sent to the company servers in Canada which are beyond the reach of telecom regulatory authorities of most countries.