U.S. Mortgage Activities Index Falls; Morgan Stanley Net Falls

Arthi Gupta
20 Oct, 2010
New York City

U.S. stocks traded higher and mortgage applications and refinancing activities declined. U.S. Treasury announced plans to sell rest of its stake in Citigroup. Morgan Stanley revenues declined 20% and net slumped 67%. Boeing Company swung to quarterly profit. Yahoo third quarter revenues flat.

[R]9:35 AM New York – U.S. stocks traded higher and mortgage applications and refinancing activities declined. U.S. Treasury announced plans to sell rest of its stake in Citigroup. Morgan Stanley revenues declined 20% and net slumped 67%. Boeing Company swung to quarterly profit. Yahoo third quarter revenues flat.[/R]

Asian markets declined but recovered from the lows of the day after China unexpectedly raised rates and European markets traded higher.

Yahoo! third quarter profit more than doubled to 113% from last year on the one-time gain on the sale of HotJobs. Altera net sales soared 84% and profit increased 284%.

U.S. mortgage applications fell last week as fixed interest rates on 15- and 30-year mortgages rose for the first time in more than a month, according to industry data released today.

The Mortgage Bankers Association''s index of mortgage activity for the week ending October 15 decreased 10.5% on a seasonally adjusted basis from one week earlier. Overall mortgage applications rose more than 14% the week before.

Refinancing, which makes up more than 82% of total mortgage applications, decreased 11.2% from the previous week.

The U.S. Department of the Treasury announced on Tuesday that it plans to sell an additional 1.5 billion shares it holds in Citigroup, Inc. as it continues to reduce its 27% stake in the bank. The Treasury said it already completed the sale of about 4.1 billion shares of Citigroup common stock across three pre-arranged trading plans and has received about $16.4 billion in gross proceeds from the sale.

The Bank of Canada held steady on interest rates, noting that a renewed emphasis on fiscal austerity will contribute to a weaker-than-expected global recovery. Canada''s central bank is maintaining its target for the overnight rate at 1%.

Burger King Holdings Inc. and 3G Capital announced the completion of the previously announced transaction to acquire the company for $24 per share in cash, or approximately $4.0 billion in the aggregate, including the assumption of outstanding debt.

Pfizer Inc. said that it is entering into a partnership with Laboratorio Teuto Brasileiro S.A., to develop and commercialize generic medicines. Pfizer will buy a 40% stake in Teuto and the companies will also enter into a series of commercial deals.

TAL Education Group, a K-12 after-school tutoring service provider in China, announced that it priced its initial public offering of 12 million American Depositary Shares at $10 per ADS, at the upper end of its filing rage between $8 and $10 a share.

BHP Billiton Ltd., the mining giant issuing its production report for the first quarter ended September 30 said it recorded a 6% increase in production of iron ore to 31.98 million tons from the year-ago period. The increase reflects higher production at the company''s Western Australia mines.

Looking ahead, the company said prospects for many of its core commodities is positive, due to strong demand from emerging economies.

BHP Billiton''s proposed takeover of Canadian fertilizer maker Potash Corporation of Saskatchewan Inc. is likely to be blocked by Saskatchewan province as it believes the proposed deal doesn''t benefit the province, reports said on Wednesday citing people familiar with the matter.

Reports also said that Saskatchewan rejected BHP''s offer to make an infrastructure investment of C$370 million as compensation.

Rio Tinto, the Anglo-Australian mining giant approved an investment of $3.1 billion in the Pilbara region to boost annual iron ore production capacity by 28% starting 2013.

Earnings Review

Altera Corporation ((ALTR)), the semiconductor company said third quarter net sales soared 84% to $527.45 million, from $286.61 million a year ago. Net income in the quarter increased 284% to $217.49 million or 69 cents per diluted share, compared to net income of $56.70 million or 19 cents per share in the previous year.

Boston Scientific Corporation ((BSX)), the medical device maker reported third quarter net sales fell 5.4% to $1.916 billion, compared to $2.025 billion last year. Net income generated in the quarter was $190 million or 12 cents per diluted share, compared to a net loss of $94 million or 6 cents per share in the prior-year quarter.

[Gilead Sciences, Inc. ((GILD)), the biopharmaceutical company reported third quarter revenue increased 8% to $1.94 billion from $1.80 billion last year. Net income in the quarter rose 5% to $704.88 million or 83 cents per diluted share, compared to net income of $673.03 million or 72 cents per share in the previous year.

Juniper Networks, Inc. ((JNPR)), the computer networking gear maker said third quarter total revenue rose 23% to $1.01 billion from $823.91 million in the same quarter last year. Net income in the quarter surged 61% to $134.5 million or 25 cents per diluted share, compared to net income of $83.8 million or 16 cents per share for the year-ago quarter.

Morgan Stanley ((MS)), the financial services firm reported third quarter net revenues fell 20% to $6.8 billion compared with $8.5 billion a year ago. Net income in the quarter slumped 67% to $313 million, or 5 cents per diluted share, compared with net income of $936 million, or 50 cents per diluted share, for the same period a year ago.

The Boeing Company ((BA)), the aircraft manufacturer said third quarter revenues edged higher 1.8% to $17.0 billion, compared to $16.7 billion in the same period last year. Net income generated in the quarter was $0.83 billion or $1.12 per share, compared to a net loss of $1.5 billion or $2.23 per share in the previous year quarter.

Yahoo! Inc. ((YHOO)), the Internet search engine said third quarter revenue increased 2% to $1.60 billion from $1.58 billion in the same quarter of 2009. Net earnings in the quarter surged 113% to $396 million or 29 cents per diluted share, compared to net earnings of $186 million or 13 cents per share in the prior-year quarter.