U.S. Stocks Dip; Deere & Co Net Up

Arthi Gupta
18 Aug, 2010
New York City

U.S. stocks traded sideways. Windstream agreed to buy Q-Comm for $782 million. The U.S. government enforces stricter guidelines for deepwater drilling. Nielsen IPO revised to raise $2 billion. Nidec agreed to buy Emerson Electric''s EMC business. Endocyte filed for $86.25 million IPO.

[R]9:35 AM New York – U.S. stocks traded sideways. Windstream agreed to buy Q-Comm for $782 million. The U.S. government enforces stricter guidelines for deepwater drilling. Nielsen IPO revised to raise $2 billion. Nidec agreed to buy Emerson Electric''s EMC business. Endocyte filed for $86.25 million IPO.[/R]

U.S. stocks trade lower, Asian markets gained and European markets declined. GCCF authorized to settle BP claim payout. BHP announced all-cash offer to acquire PotashCorp.

Eli Lilly stopped development of Alzheimer''s drug semagacestat.

Eli Lilly and Company said on Tuesday it will halt development of semagacestat, a gamma secretase inhibitor studied as a potential treatment for Alzheimer''s disease, because preliminary results from two ongoing long-term Phase III studies showed it did not slow disease progression and was associated with worsening of clinical measures of cognition and the ability to perform activities of daily living.

Semagacestat is an oral agent designed to reduce the body''s production of amyloid beta plaques, which is believed to play an important role in causing Alzheimer''s disease.

Windstream Corp., the telecommunications services provider agreed to acquire Q-Comm Corp., a privately held regional fiber transport and competitive local exchange carrier, in a transaction valued at about $782 million in cash and stock. The transaction approved by the boards of both the companies, is expected to close in the fourth quarter of 2010.

Windstream expects to issue approximately 20.6 million common shares valued at $237 million based on Windstream’s closing share price on August 17 of $11.49, and pay approximately $278 million in cash consideration for outstanding equity interests in Q-Comm. Windstream also will repay estimated Q-Comm debt balances of approximately $267 million, net of cash acquired.

General Motors recalled more than 240,000 large crossover vehicles, citing problems with second-row seat belts.

The automaker asked customers to return 2009-2010 models of the Chevrolet Traverse, Buick Enclave, GMC Acadia and Saturn Outlook for inspection.

The majority of vehicles recalled were sold in the United States, but the company also raised red flags about thousands of vehicles exported to Canada, Mexico, and China.

""Because of the potential for a false-latch condition, we want customers to return their vehicles to have the recall repair performed as soon as possible,"" said Jeff Boyer, GM executive director of safety.

The U.S. government on Monday released environmental guidelines that subject all new deepwater oil and natural gas drilling to full environment reviews, while shallow-water drilling will also be subjected to tougher environmental scrutiny.

The Interior Department said that the ban on so-called ""categorical exclusions"" for deepwater drilling, would be in place while the government conducts a review on how exemptions to oil and gas companies are granted.

Nielsen Holdings B.V. announced on Monday in a regulatory filing an initial public offering to raise $2.01 billion. The company has applied filed for its common stock to be listed on the New York Stock Exchange under the ticker symbol ''NLSN.''

The New York-based company initially filed with the U.S. Securities and Exchange Commission in early July for an IPO to raise up to $1.75 billion and at the time Nielsen neither disclosed the number of shares to be offered nor details about its offering price range.

The company stated that it intends to use the anticipated net proceeds from the offering of about $1.66 billion to repay or redeem certain existing debt. As of June 30, 2010, the company has a debt of $8.4 billion.

The IPO will be managed by JPMorgan Chase & Co. and Morgan Stanley, along with Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc. and Citigroup Inc.

BP plc. said it is transferring responsibility for accepting claims from individuals and businesses affected by the Gulf oil disaster. From Wednesday, BP will direct potential claimants to the Gulf Coast Claims Facility, which will become operational on August 23.

Attorney Kenneth Feinberg is coordinating payments under BP''s Gulf disaster compensation fund. A sum of $368 million has already been paid out in compensation to residents and businesses affected by the spill, making it one of the largest claim payment programs conducted in a three-and-a-half month period.

Nidec Corp., the Japan-based machinery and components maker agreed to buy the Motors and Controls business of Emerson Electric Co. in an all cash-deal. The value of the deal was not disclosed. The transaction is to close by September 30, subject to certain regulatory approvals.

The deal will provide Nidec a strong new U.S./North American presence for its global motor and motor-related business as the company gets to include into its portfolio EMC''s large industrial motors, medium-size central air conditioning motors, and other technologies.

Nidec said the transaction with Emerson will expand its portfolio into the automobile, industrial and home appliance motors segments, and is a part of its broader strategy to reach sales of 2 trillion yen by 2015.

Endocyte, Inc. announced its plan to go public through an initial public offering of up to $86.25 million shares of its common stock in a filing with the U.S. Securities and Exchange Commission. The company neither disclosed the number of shares to be offered nor details about the estimated price range.

Endocyte said it expects to use substantially all of the net proceeds to fund phase 2 and phase 3 clinical trials and to move other clinical and preclinical products forward in the development process. The company plans to use any remainder of the net proceeds for working capital and other general corporate purposes.

Endocyte is a biopharmaceutical company developing targeted therapies for the treatment of cancer and inflammatory diseases.

Leonard Riggio, Chairman of the Board of Barnes & Noble, Inc., filed with the U.S. Securities and Exchange Commission his right to acquire 990,740 shares on August 13, 2010, at a price of $16.96 a piece. Riggio, who is one of the current directors holds approximately 29.9% stake in the company, including options. The purchase will strengthen his voting power, as the company is facing a proxy battle from billionaire activist investor Ronald Burkle.

Earnings Review

Analog Devices, Inc. ((ADI)), the chipmaker said third quarter revenue rose 46% to $720.29 million from $491.99 million in the same quarter last year. Net income for the quarter surged 204.6% to $199.5 million or 65 cents per diluted share, compared to net income of $65.5 million or 22 cents per share for the year-ago quarter.

BJ''s Wholesale Club, Inc. ((BJ)), the warehouse club operator second quarter net sales climbed 8.3% to $2.78 billion compared to net sales of $2.57 billion. Net income in the quarter gained 2% to $35.8 million or 67 cents per diluted share compared to net income of $35.1 million or 64 cents per share in the year-ago quarter.

Chico''s FAS, Inc. ((CHS)), the specialty retailer stated second-quarter net sales increased 10.8% to $465.4 million from $419.9 million in last year''s second quarter. Net income in the quarter soared 104% to $30.45 million or 17 cents per diluted share from net income of $14.9 million or 8 cents per share a year ago.

Deere & Co. ((DE)), the farm machine maker reported third quarter worldwide net sales and revenues increased 16% to $6.837 billion from $5.885 billion last year. Net income in the quarter rose 47% to $617 million or $1.44 per share compared to net income of $420 million, or 99 cents per diluted share, for the same period last year.

La-Z-Boy Incorporated ((LZB)), the upholstery and furniture products maker stated first quarter revenues rose marginally to $263.31 million compared with $262.67 million in the prior-year quarter. Net loss in the quarter was $0.195 million or break-even per share, compared with net income of $1.98 million or 4 cents per share last year.

Photronics, Inc. ((PLAB)), the imaging technology solutions provider reported sales for the third quarter rose 18% to $112.25 million from $95.40 million in the year-ago quarter. Net income generated in the quarter was $7.69 million or 13 cents per diluted share, compared with a net loss of $22.84 million or 55 cents per share in the prior-year quarter.

Polymer Group, Inc. reported second quarter net sales increased 40.6% to $289.7 million from $206.0 million in the year-ago quarter. Net income in the quarter slumped 74% to $1.6 million or 7 cents per diluted share, compared to net income of $6.2 million or 31 cents per share in the prior-year quarter.

Target Corporation ((TGT)), the discount retailer operator second quarter total revenues edged higher 3.1% to $15.532 billion, from $15.067 billion in the prior-year quarter. Net earnings grew 14.3% to $679 million or 92 cents per diluted share compared to net earnings of $594 million or 79 cents per diluted share in the year-ago quarter.

Vestin Realty Mortgage II, Inc. ((VRTB)) reported second quarter total revenues plummeted 245% to $690,000 from $2.38 million a year ago. Net loss for the quarter narrowed 57% to $6.2 million or 45 cents per diluted share, compared to a net loss of $14.5 million or $1.05 per share for the year-ago quarter.