U.S. Stocks Advance; Intel, JPMorgan Net Rise

Arthi Gupta
13 Oct, 2010
New York City

U.S. stocks gained after the Fed comments and upbeat earnings from Intel and JPMorgan. U.S. import prices declined 0.3% and export prices rose 0.6% in September. Intel earnings rose 59% and JPMorgan Chase earnings surged 23%.

[R]9:35 AM New York – U.S. stocks gained after the Fed comments and upbeat earnings from Intel and JPMorgan. U.S. import prices declined 0.3% and export prices rose 0.6% in September. Intel earnings rose 59% and JPMorgan Chase earnings surged 23%.[/R]

Markets around the world advanced after the U.S. Federal Reserve noted in its latest minutes of meeting a willingness to stimulate the economy. The widely expected move was quickly seized by the bulls and stocks scaled higher in the late afternoon yesterday and sparked a rally in Japan, China, India and Europe.

U.S. lifted the ban on deepwater drilling in the Gulf of Mexico and said the more stringent conditions are in place for oil drilling in the region.

Berkshire Hills agreed to buy Rome Bancorp for $74 million. CSC won $95 million contract from the U.S Defense Department.

Latest FOMC minutes of meeting noted the continued weakness in commercial real estate and volatile and weak residential markets.

While the consumer spending is recovering at a moderate pace bank lending continues to shrink but at a slower pace from a year ago. The committee members also noted that inflation is expected to remain below target range well into 2012.

U.S. import prices declined 0.3% on a monthly basis in September, as against a 0.6% growth in August and export prices rose 0.6% on a monthly basis in September versus a 0.8% growth in August.

A report released by the Cabinet Office in Japan stated that core machinery orders in Japan climbed a seasonally adjusted 10.1% in August compared to the 8.7% increase in July.

China reported that the country''s trade surplus fell to $16.9 billion in September from $20 billion in August. Exports rose 25.1% from a year ago, down from the 34.4% rise in August. Import growth slowed to 24.1% from 35.5% in August.

The International Energy Agency upwardly revised its global oil demand forecast based on stronger-than-expected third quarter 2010 readings, notably in the OECD, and updated GDP and price assumptions.

The IEA, in its monthly Oil Market Report released today, said that global oil demand will grow by 0.3 million barrels per day to 86.90 mbd year-over -year in 2010. The agency upped its 2011 demand growth forecast by a similar 0.30 mbd to 88.20 mbd.

The Obama Administration announced that it is lifting a ban on deepwater drilling in the Gulf of Mexico. Interior Secretary Ken Salazar noted that the oil and gas industry will be operating under tighter rules and stronger oversight. Prior to resuming drilling, oil companies will have to demonstrate that they have the resources to contain and mitigate any future spill.

Standard Chartered plc, the UK-based lender is planning to launch a rights issue to raise £5 billion to £7 billion, or $7.91 billion to $11.08 billion, as part of the company''s efforts to protect itself from the impact of the new Basel III capital rules, the Financial Times reported on Tuesday. The plan could be announced as early as this week, the report noted.

Berkshire Hills Bancorp, Inc. said it would acquire Rome Bancorp, Inc. and its subsidiary, The Rome Savings Bank, for around $74 million, with a view to expand its reach in New York market.

As per the merger deal, 70% of the outstanding Rome shares will be exchanged for Berkshire shares at a fixed exchange ratio of 0.5658 Berkshire shares for each share of Rome. The remaining 30% of Rome shares will be exchanged for cash in the amount of $11.25 per share.

Computer Science Corp., the company engaged in the information technology and professional services industry said that the U.S. Department of Defense awarded the company an estimated $95 million contract to support its Pharmacy Data Transaction Service or PDTS, which is part of the U.S. military health system TRICARE. The contract awarded has a six month base and four option periods, for a total of 51 months.

Earnings Review

Adtran, Inc. ((ADTN)), the networking and communications equipments maker said third quarter sales rose 27% to $162.96 million from $128.06 million in the prior-year quarter. Net income in the quarter soared 49% to $32.1 million or 50 cents per diluted share, compared to net income of $21.6 million or 34 cents per share for the year-ago quarter.

Chevron Corporation ((CVX)) said that it expects profit for the third quarter to be lower than the previous quarter due to a weaker U.S. dollar, higher expenses and a decline in crude oil realizations. The company did not provide any specific numbers.

CSX Corporation ((CSX)) the railroad operator third quarter revenue increased 16% to nearly $2.7 billion from $2.3 billion in the same quarter last year due to a 10% overall growth in volume. Net earnings in the quarter soared 43% to $414 million or $1.08 per diluted share, compared to net earnings of $290 million or 73 cents per share in the prior-year quarter.

Healthcare Services Group, Inc. ((HCSG)), the provider of housekeeping and food services to hospitals and nursing homes reported third quarter revenues rose 9% to $195.11 million from $178.83 million last year. Net income in the quarter increased 12% to $9.17 million or 21 cents per diluted share, compared with net income of $8.22 million or 19 cents per share in the previous year.

Host Hotels & Resorts, Inc. ((HST)), the hospitality real estate company reported third quarter total revenues grew 11.4% to $1.006 billion from $903 million in the prior-year quarter. Net loss in the quarter widened 1.8% to $58 million or 9 cents per diluted share, compared to a net loss of $57 million or 9 cents per share in the previous year.

Funds from operations rose 14% to $75 million or 11 cents per share, compared to $66 million or 11 cents per share last year.

iGATE Corporation ((IGTE)), the outsourcing solutions provider reported third quarter revenues soared 52.6% to $74.85 million, from $49.06 million in the same period a year ago. Net income in the quarter increased 61% to $14.27 million or 25 cents per diluted share, compared to net income of $8.88 million or 16 cents per share in the prior-year quarter.

Intel Corporation ((INTC)), the semiconductor chip maker said third quarter revenue rose 18% to $11.10 billion from $9.39 billion in the same quarter last year. Net income in the quarter surged 59% to $2.96 billion or 52 cents per diluted share, compared to net income of $1.86 billion or 33 cents per share for the year-ago quarter.

Intel said that its third quarter profit rose, as revenue increased and margins improved due to solid demand from corporate customers, sales of its leadership products and continued growth in emerging markets.

JPMorgan Chase & Co. ((JPM)), the financial services provider reported third quarter total revenues declined 11% to $23.82 billion, from $26.62 billion in the prior-year quarter. Net income in the quarter gained 23% to $4.4 billion or $1.01 per diluted share, compared to net income of $3.6 billion or 82 cents per share in the third quarter of 2009.

Linear Technology Corporation ((LLTC)), the integrated circuits maker reported first quarter revenues rose 65% to $388.59 million from $236.13 million last year. Net income in the quarter increased 126% to $137.25 million or 59 cents per diluted share, compared to net income of $60.69 million or 27 cents per share in the previous year.

MGM Resorts International ((MGM)), the casino operator said it expects to record a loss in the third quarter on charges related to its investment in CityCenter and Borgata.

MGM Resorts expects to record a loss in the third quarter of $0.72 per share, compared to a loss of $1.70 per share recorded in the prior year third quarter.