U.S. Unemployment Rate at 9.6%

Arthi Gupta
03 Sep, 2010
New York City

U.S. stocks rose after non-farm payrolls fell 54,000 in August. Emerson completed acquisition of Chloride for $1.5 billion. Goldcorp agreed to buy Andean Resources for C$3.6 billion. Disney and Time Warner Cable signed deal for digital video services.

[R]9:35 AM New York – U.S. stocks rose after non-farm payrolls fell 54,000 in August. Emerson completed acquisition of Chloride for $1.5 billion. Goldcorp agreed to buy Andean Resources for C$3.6 billion. Disney and Time Warner Cable signed deal for digital video services.[/R]

U.S. stocks gained and Asian and European markets advanced.

HP agreed to acquire 3PAR for $2.35 billion. Burger King agreed to be acquired by 3G Capital for $4 billion. Avis Budget revised offer to $40.75 per share to buy Dollar Thrifty. BP noted oil spill costs rose to $8 billion.

Federal reserve Chairman Ben Bernanke told lawmakers on Thursday that a lack of regulation in the shadow banking system was one of the key triggers in the 2008 economic and financial crisis.

Speaking at a hearing before the Financial Crisis Inquiry Commission in Washington, D.C., Bernanke said that shadow banks (non-depository institutions) were the source of key vulnerabilities that amplified the initial financial shock that began with the subprime mortgage crisis.

The Fed chief said that the Federal Reserve had no authority to regulate the shadow banks and address their liquidity problems until the crisis had already decimated the economic and financial system.

The U.S. Labor Department reported employment in August fell much less than anticipated. The report showed that non-farm payroll employment fell 54,000 jobs in August, matching the revised decline in July.

However, the unemployment rate still edged higher to 9.6% in August from 9.5% in July. The temporary hiring picked up as U.S. hired staff for Census 2010.

Emerson Electric Co., the diversified technology company completed its acquisition of Chloride Group plc for $1.5 billion. The company noted that the acquisition helps drive Emerson''s long-term global growth strategy for uninterruptible power supply and integrated data center solutions.

Australia based Goldcorp Inc. agreed to acquire Andean Resources Limited for total consideration of approximately C$3.6 billion. The transaction is expected to close in late 2010 or early 2011.

Under the arrangement, each common share of Andean will be exchanged for 0.14 common shares of Goldcorp or a per share cash payment of C$6.50, subject to an aggregate maximum cash consideration of C$1 billion.

The company said the transaction represents a 35% premium to Andean''s closing price in Toronto trading on September 2 and a 56% premium to Andean''s 20 day volume weighted average trading price.

Walt Disney Co. and cable operator Time Warner Cable Inc. reached a new long-term expanded programming deal that will keep Disney''s broadcast and cable channels on Time Warner Cable. Financial terms of the deal were not disclosed.

The deal includes new services for subscribers, including Disney Junior, ESPN3.com, ESPN Goal Line and expanded Video on Demand offerings.

Novartis AG, the Swiss healthcare company announced the discovery of a new compound that shows promise as a next generation treatment for drug resistant malaria. The company said the compound could progress into Phase I human trials, subject to a favorable outcome from the currently ongoing regulatory pharmacological and safety evaluation.

HP will purchase 3PAR through a cash tender offer of $33 per share in cash, or an enterprise value of $2.35 billion. The transaction has been approved by the boards of directors of both companies.

Burger King Holdings, Inc. and 3G Capital announced an agreement under which affiliates of 3G Capital will acquire the stock of the company for $24 per share, or $4 billion, including the assumption of the company''s outstanding debt.

3G is expected to commence a tender offer for all outstanding shares of Burger King on or before September 17. The transaction is conditioned upon, among other things, the satisfaction of the minimum tender condition of about 79.1% of Burger King''s common shares.

Fitch Ratings downgraded Burger King Corp.''s Issuer Default Rating to ''B+'' from ''BB'' following its definitive agreement to be acquired by affiliates of 3G Capital. The rating agency affirmed Burger King''s secured bank facility at ''BB+.''

Fitch also placed Burger King''s IDR on Rating Watch Negative and assigned a ''RR1'' Recovery Rating to the secured bank debt.

Avis Budget Group, Inc. increased the cash portion of its offer to buy car rental company Dollar Thrifty Automotive Group, Inc. to $40.75 per share from $39.25 per share.

Avis Budget said its revised offer of $40.75 in cash and 0.6543 shares of Avis Budget stock, represents a premium of more than 22% over the Hertz Global Holdings, Inc.''s offer.

BP today provided an update on developments in the response to the MC252 oil well incident in the Gulf of Mexico.

The company said the MC252 well has been shut-in since July 15. Following the completion of cementing operations on the well on August 5, pressure testing was performed which indicated there is an effective cement plug in the casing.

Further, BP stated it is preparing to replace the Deepwater Horizon drilling rig’s failed blow-out preventer and resume the oil drilling operation.

BP said that its total cost of response to the MC252 oil well incident reached about $8 billion to date. The amount includes the cost of the spill response, containment, relief well drilling, static kill and cementing, grants to the Gulf states, claims paid and federal costs.

An explosion ripped through an oil rig in the Gulf of Mexico, setting it on fire and forcing all the thirteen workers on board the oil platform into the water, the U.S. Coast Guard said on Thursday.

According to Coast Guard officials, the explosion occurred on a Mariner Energy-owned oil rig, located about 90 miles south of Vermillion Bay on Louisiana''s coast.

It is not yet clear what caused the explosion on board the rig, which according to Coast Guard officials was not producing oil at the time of the accident.

Earnings Review

Campbell Soup Company ((CPB)), the branded convenience food products maker stated fourth quarter net sales fell 0.7% to $1.52 billion compared with $1.53 billion in the comparable period. Net earnings in the quarter soared 64% to $113 million or 33 cents per diluted share compared to net earnings of $69 million or 20 cents per share in the prior year.

ArcSight Inc. ((ARST)), the security solutions provider reported first quarter revenues increased 39.3% to $48.13 million from $34.55 million a year earlier. Net income in the quarter soared 200% to $3.0 million or 8 cents per diluted share, compared with net income of $1.0 million or 3 cents per share reported in the first quarter of fiscal 2010.

Del Monte Foods Company ((DLM)), the branded food and pet products producer reported first quarter sales declined 1.1% to $804.6 million from $813.7 million in the same quarter last year. Net income in the quarter rose 1.4% to $59.4 million or 29 cents per diluted share, compared to net income of $58.6 million or 29 cents per share in the same quarter last year.

Esterline Technologies Corporation ((ESL)), the defense and aerospace contractor said third quarter sales climbed 6.1% to $383.5 million, compared to $361.5 million in the previous year period. Net income in the quarter gained 22.4% to $39.9 million or $1.30 per share, compared to net income of $32.6 million or $1.09 per share in the prior-year period.

Finisar Corporation ((FNSR)), the networking and communication devices provider stated first quarter revenues increased 61.5% to $207.88 million from $128.72 million last year. Net income in the quarter was $19.41 million or 24 cents per diluted share, compared to a net loss of $11.12 million or 18 cents per share in the previous year.

H&R Block, Inc. ((HRB)), the tax preparation company reported first quarter total revenues edged lower 0.4% to $274.5 million from $275.5 million in the comparable quarter last year. Net loss in the quarter narrowed 13.8% to $114.8 million or 36 cents per share, compared to a net loss of $130.6 million or 39 cents per share in the year-ago quarter.

Lantronix, Inc. ((LTRX)), the networking and internet connectivity products maker reported fourth quarter revenue improved 3.7% to $11.82 million from $11.40 million in the comparable quarter a year ago. Net loss in the quarter narrowed 7.3% to $0.51 million or 5 cents per diluted share compared to a net loss of $0.55 million or 5 cents per share last year.

Mitel Networks Corporation ((MITL)), the unified communications software solutions provider reported first quarter revenues declined 0.4% to $160.00 million, compared with $159.4 million last year. Net income in the quarter was $6.8 million or 12 cents per share, compared to a net loss of $9.4 million or 66 cents per share, in the same period last year.

SeaChange International, Inc. ((SEAC)), the developer, manufacturer and marketer of digital video systems and services said second quarter revenues advanced 11% to $51.63 million, compared with $46.50 million in the previous year period. Net income in the quarter was $3.5 million or 11 cents per diluted share, compared with a net loss of $0.4 million or 1 cent per share in the same quarter last year.

Take-Two Interactive Software, Inc. ((TTWO)), the video-game publisher said third quarter net revenue surged 273% to $354.08 million from $94.93 million in the same quarter last year. Net income in the quarter was $5.9 million or 7 cents per diluted share, compared to a net loss of $56.5 million or 73 cents per share for the year-ago quarter.

The Cooper Companies, Inc. ((COO)), the healthcare products provider reported third quarter sales increased 4% to $295.63 million from $285.23 million last year. Net income in the quarter surged 81% to $39.73 million or 86 cents per diluted share compared to net income of $21.91 million or 48 cents per share in the previous year.

Ulta Salon, Cosmetics & Fragrance, Inc. ((ULTA)), the beauty retailer second quarter net sales increased 17.6% to $321.8 million from $273.5 million in the prior-year quarter, helped by a 10.8% increase in comparable store sales. Net income in the quarter soared 127.2% to $13.06 million or 22 cents per diluted share as against net income of $5.75 million or 10 cents per share in the same quarter a year ago.