U.S. Stocks Drop; $50 Billion Stimulus

Arthi Gupta
07 Sep, 2010
New York City

U.S. stocks declined on global economic worries. Obama proposed $50 billion plan to stimulate the economy. Airgas board considering revised $65.50 per share bid of Air Products. ResCare to be acquired by Onex Partners for $13.25 per share.

[R]9:35 AM New York – U.S. stocks declined on global economic worries. Obama proposed $50 billion plan to stimulate the economy. Airgas board considering revised $65.50 per share bid of Air Products. ResCare to be acquired by Onex Partners for $13.25 per share.[/R]

U.S. stocks traded lower, Asian markets traded sideways and European markets fell.

The Reserve Bank of Australia kept its benchmark interest rate at 4.5% for the fourth consecutive month.

The Bank of Japan maintained its key interest rate at near-zero at the end of its two-day policy meeting today. In a unanimous vote, the policy board of the central bank led by Governor Masaaki Shirakawa decided to leave the uncollateralized overnight call rate unchanged at 0.10%.

President Barack Obama on Monday, speaking at a labor gathering in Wisconsin called for a new $50 billion investment in the nation''s infrastructure. The program, which would include roads, railways and airports, represents long overdue work in a national infrastructure that has grown outdated and inefficient.

Obama said the goal of the bill was to, over the next six years, rebuild 150,000 miles of road, lay and maintain 4,000 miles of railways and restore 150 miles of runways while also upgrading the national air-traffic control system to reduce traveler delays.

Hiring expectations in emerging markets continued its upward trend for the fourth quarter, while confidence remained mixed in Europe, the quarterly Employment Outlook Survey published by the employment services provider Manpower showed today.

The survey noted among the U.S. employers, hiring plans are stronger than a year ago level. Out of total 36 countries covered by the survey, hiring activity is set to improve in 32 nations on an annual basis.

Furthermore, the report suggested hiring expectations remain mixed in the 18 countries surveyed in the Europe, Middle East and Africa region, similar to the third quarter. However, hiring activity in the region is expected to be strongest in Switzerland, Norway and Poland and weakest in Greece and Italy.

Oracle Corp. announced on Monday that the ousted CEO of Hewlett-Packard Co. Mark Hurd joined it as president and as a director. Hurd serves as co-president alongside Safra Catz and succeeded Charles Phillips, who resigned from the positions.

Barclays plc, the British financial services firm announced today the appointment of Robert Diamond Jr. as its Chief Executive Officer, succeeding John Varley, who is scheduled to resign as CEO on March 31, 2011. Diamond, who is currently President and Head of its investment banking unit, would become Deputy Group Chief Executive from October this year.

Airgas Inc said its Board would review the revised unsolicited tender offer of $65.50 per share from Air Products & Chemicals Inc. The revised offer comes at a premium of more than 50% over the closing price of Airgas'' shares on February 4, 2010, the day before Air Products announced its proposal to acquire Airgas.

ResCare, Inc. entered into an agreement with an entity sponsored by Onex Partners III, L.P., an affiliate of Onex Corp. by which Onex would acquire all of the outstanding shares of ResCare common stock not owned by Onex affiliates or participating members of ResCare''s management for $13.25 per share in cash.

Earnings Review

Casey’s General Stores, Inc. ((CASY)), the operator of convenience stores reported first quarter revenue rose 14.3% to $1.36 billion from $1.19 billion in the comparable period. Net earnings in the quarter declined 16% to $37.29 million or 73 cents a diluted share compared to net earnings of $44.19 million or 87 cents in the prior-year period.

Coca-Cola Enterprises ((CCE)) raised its full-year 2010 earnings per share guidance for the existing company to a range of $1.78 to $1.82, including a negative currency impact of about 7 cents at current levels. The company also announced long-term financial objectives for new CCE and said it expects the pending transaction with The Coca-Cola Company to close in the fourth quarter.