U.S. Stocks Fall, Durable Goods Orders Rise

Arthi Gupta
25 Aug, 2010
New York City

U.S. stocks fell after durable goods orders rose 0.3% in July. Roche and Aileron signed an agreement to develop Stapled Peptide drugs. Mortgage refinancing activities index rose to a 15-year high.

[R]9:35 AM New York – U.S. stocks fell after durable goods orders rose 0.3% in July. Roche and Aileron signed an agreement to develop Stapled Peptide drugs. Mortgage refinancing activities index rose to a 15-year high.[/R]

U.S. stocks slide, Asian stocks declined with the Nikkei at a 16-month low, and European markets fell on disappointing U.S. economic data.

BHP Billiton plc reported a more than two-fold rise in fiscal 2010 profit, driven by strong commodity demand and higher prices.

The Commerce Department report showed a modest increase in durable goods orders in July and transportation equipment orders showed a notable increase in the month.

The report showed that durable goods orders rose 0.3% or $0.6 billion to $193.0 billion in July following a revised 0.1% decrease in June.

Excluding a 13.1% increase in orders for transportation equipment, durable goods orders actually fell 3.8% in July compared to a revised 0.2% increase in June.

Refinancing activity in the U.S. reached a new 15-year high last week. The Mortgage Bankers Association''s Market Composite Index increased 4.9% on a seasonally adjusted basis from one week earlier.

The Refinance Index edged higher 5.7% from the previous week and is at its highest level since May 1, 2009.

Aileron Therapeutics and Roche announced a collaboration to discover, develop and commercialize a new class of drugs called Stapled Peptide Therapeutics.

Roche will work with Aileron to develop drug candidates against up to five undisclosed targets selected from Roche''s therapeutic areas. The therapeutic areas include oncology, virology, inflammation, metabolism and CNS.

Roche will provide Aileron guaranteed funding of at least $25 million in technology access fees and R&D support. Aileron is eligible to receive up to $1.1 billion in payments upon the achievement of discovery, development, regulatory and commercialization milestones, if drug candidates are developed against all five targets.

In addition, Aileron will receive royalties on future sales for any marketed products that result from the collaboration.

Customers USA Bank entered into an agreement to acquire Berkshire Bancorp Inc. and its subsidiary Berkshire Bank. This will be an all common stock transaction valued at tangible book value at the month end prior to closing. The merger is expected to close in the first quarter of 2011.

HP announced an eight-year, $135 million technology services contract with the Alabama Medicaid Agency. Under the new contract, HP said it will migrate the agency''s storage to an HP StorageWorks 4400 Enterprise Virtual Array or EVA4400 storage area network Tier-1 environment.

Rio Tinto Plc, the Anglo-Australian miner along with a Chinese partner is reportedly considering a bid for Potash Corp. of Saskatchewan, Inc. Earlier, Potash Corp. rejected BHP Billiton''s approximately $40 billion hostile bid, according to news released by Canada''s Globe & Mail Web site.

The U.S. Securities and Exchange Commission charged two Spanish residents with insider trading, alleging $1.1 million in illegal profits by trading in advance of last week''s public announcement of BHP Billiton Plc''s bid for Potash Corp. of Saskatchewan Inc.

Earnings Review

Barnes & Noble, Inc. ((BKS)), the books retailer reported first quarter sales increased 21% to $1.4 billion from $1.16 billion in the prior-year quarter. Net loss attributable to the company was $62.52 million or $1.12 per diluted share, compared to net income of $12.27 million or 21 cents per share in the same quarter last year.

BHP Billiton Limited ((BHP)), after the diversified natural resources company reported fiscal 2010 revenue increased 5.2% to $52.80 billion from $50.21 billion in the comparable period. Net income in the period surged 115.3% to $12.7 billion compared to net income of $5.9 billion a year ago.

Burger King Holdings, Inc. (BKH)), the fast food hamburger restaurant said fourth quarter revenues fell 1% to $623.0 million from $629.9 million in the same quarter last year. Net income in the quarter declined 16.8% to $49.0 million or 36 cents per diluted share compared with net income of $58.9 million or 43 cents per share in the same quarter last year.

Coldwater Creek Inc. ((CWTR)), the national specialty retailer of women''s apparel reported second quarter net sales rose 12.6% to $253.5 million, compared with $225.2 million in the fiscal 2009 second quarter. Net income in the quarter was $1.5 million, or 2 cents per diluted share, compared to a net loss of $4.9 million, or 5 cents per share in the year ago quarter.

Dycom Industries Inc. ((DY)), the provider of specialty contracting services stated fourth quarter contract revenue increased 4.4% to $281.54 million from $269.69 million in the prior-year quarter. Net income in the quarter slumped 30.3% to $4.6 million or 12 cents per diluted share, compared to net income of $6.6 million or 17 cents per share for the year-ago quarter.

Pacific Sunwear of California, Inc. ((PSUN)), the specialty retailer reported second quarter net sales declined 10.2% to $218 million from $243 million in the year-ago quarter on same-store sales fall of 10%. Net loss in the quarter widened 65.7% to $23.47 million or 36 cents per diluted share from $14.16 million or 22 cents per share in the same quarter last year.

VeriFone Systems, Inc. ((PAY)), the provider of electronic payment solutions said third total net revenues soared 23.8% to $261.45 million from $211.24 million in the quarter last year. Net income in the quarter rose 12% to $18.53 million or 21 cents per diluted share, compared with net income of $16.54 million or 20 cents per share for the year-ago quarter.

Toll Brothers, Inc. ((TOL)), the luxury homebuilder reported third quarter revenues fell 1.6% to $454.20 million from $461.38 million in the prior-year quarter. Net income generated in the quarter was $27.3 million or 16 cents per diluted share, compared to a net loss of $472.3 million, or $2.93 per share in the year-ago quarter.

The company said that it currently projects lower revenues in fourth quarter than last year.