U.S. Weekly Jobless Claims, Productivity Rise; Time Warner Cable Net Up

Arthi Gupta
04 Nov, 2010
New York City

U.S. stocks gained after the Fed increased Treasuries purchase, weekly jobless claims rose 20,000 and productivity increased in the third quarter. GM commenced IPO at $26 to $29 a share. Canada blocked BHP Billiton''s $40 billion bid for PotashCorp. SAP agreed to pay $120 million to Oracle.

[R]9:35 AM New York – U.S. stocks gained after the Fed increased Treasuries purchase, weekly jobless claims rose 20,000 and productivity increased in the third quarter. GM commenced IPO at $26 to $29 a share. Canada blocked BHP Billiton''s $40 billion bid for PotashCorp. SAP agreed to pay $120 million to Oracle.[/R]

World markets rallied after the Federal Reserve expanded asset purchases by $600 billion, effectively printing money to revive the economic growth.

The Federal Reserve pledged to buy $600 billion more in government bonds by the middle of next year in an effort to jump start the floundering U.S. economy. The Fed''s decision to expand its asset purchase program came as it determined that economic data received since its September meeting confirmed that the pace of the recovery in output and employment continues to be slow.

The Fed also said it decided to maintain the target for the federal funds rate at zero to 0.25% and reiterated that economic conditions are likely to warrant exceptionally low rates for “an extended period.”

The Fed noted that the growth in household spending is constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.

The U.S. Labor Department said jobless claims rose in the week ended October 30. The Labor Department said initial jobless claims rose to 457,000 from the previous week''s revised claims of 437,000.

In another report the Labor Department stated that labor productivity in the U.S. increased by more than expected in the third quarter, with an unexpected drop in unit labor costs for the quarter.

The report showed that productivity increased 1.9% in the third quarter after falling by an unrevised 1.8% in the second quarter and unit labor costs edged down 0.1% in the third quarter following a revised 1.3% increase in the second quarter.

General Motors Co. announced on Wednesday the commencement of its initial public offering by selling of 365 million shares of common stock.

The IPO will consist of common stock to be sold by certain of its shareholders, including the U.S. Treasury Department, and Series B mandatory convertible junior preferred stock issued by the company to raise total proceeds of $13 billion. The company estimated a price range between $26.00 and $29.00 a share after splitting the shares three-for-one in advance of the IPO.

Canada on Wednesday blocked BHP Billiton’s $40 billion takeover of Potash Corp. of Saskatchewan Inc. saying that the proposed transaction is not likely to provide a ""net benefit"" to the country.

In a statement, Tony Clement, Minister of Industry, Canada said, ""I can confirm that I have sent a notice to BHP Billiton indicating that, at this time, I am not satisfied that the proposed transaction is likely to be of net benefit to Canada. I came to this decision after a careful and rigorous review of the proposed transaction.""

In response, BHP Billiton said it was disappointed with the Canadian government''s decision, but continued to believe that the offer was of beneficial to Saskatchewan, New Brunswick and Canada.

SAP AG, the business software maker reportedly agreed to pay $120 million to U.S. rival Oracle Corp. for not seeking punitive damages in the intellectual property lawsuit filed against the German software company. Oracle has not been able to serve subpoena on SAP''s former chief executive Leo Apotheker as he was not available.

On March 22, 2007, Oracle filed suit against SAP and its subsidiary TomorrowNow, which provides third party support for Oracle applications. SAP has admitted that TomorrowNow unlawfully used information from Oracle''s servers. A trial over copyright infringement began this week.

The Travelers Companies, Inc. said that it entered into an agreement, according to which, Travelers will initially invest in J. Malucelli about $370 million for 43% of common stock with an option to increase interest up to 49.9% within 18 months. The transaction is expected to close in the first-half of 2011.

Malucelli is a market leader in the surety insurance business in Brazil with a market share in excess of 30%.

Earnings Review

Becton, Dickinson and Co. ((BDX)), the medical devices and diagnostic products maker said fourth quarter revenue increased 1% to $1.87 billion from $1.85 billion in the same quarter last year. Net income in the quarter rose 25% to $396.7 million or $1.68 per share, compared to net income of $317.2 million or $1.29 per share for the year-ago quarter.

Chesapeake Energy Corporation ((CHK)), the producer of natural gas third quarter revenue increased 43% to $2.58 billion from $1.81 billion last year. Net income in the quarter surged 177% to $515 million or 75 cents per diluted share, compared to net income of $186 million or 30 cents per share last year.

Continental Resources, Inc. ((CLR)), the oil and gas producer reported third quarter total revenues rose 28.9% to $219.45 million, compared with $170.20 million in the prior-year quarter, as oil and natural gas sales helped offset loss on mark-to-market derivative instruments. Net income in the quarter rose 11.8% to $39.08 million or 23 cents per diluted share, compared to net income of $34.93 million or 21 cents per share in the same quarter a year ago.

Costco Wholesale Corporation ((COST)), the membership warehouse club operator reported for the four weeks ended on October 31, the company''s same-store sales rose 6% including its Mexico operations for both last year and this year. U.S. same-store sales rose 4% and international same-store sales grew 14% in October.

Health Care REIT, Inc. ((HCN)), the real estate investment trust that invests in senior housing and health care real estate reported third quarter gross revenues rose 26% to $176.15 million from $140.14 million in the prior-year quarter. Net income in the quarter slumped 94% to $1.12 million or 1 cent per diluted share, compared to net income of $19.13 million or 17 cents per share in the same quarter last year.

Murphy Oil Corporation ((MUR)), the oil and natural gas company said third quarter revenue rose 17% to $6.06 billion from $5.18 billion in the same quarter last year. Net income in the quarter edged higher 7% to $202.8 million or $1.05 per diluted share, compared to net income of $188.9 million or 98 cents per share for the year-ago quarter, mainly due to better earnings from U.S. retail marketing and ethanol production operations.

News Corporation ((NWSA)), the diversified global media company said first quarter revenues increased 3% to $7.43 billion from $7.20 billion in the same quarter last year. Net income in the quarter soared 36% to $775 million or 30 cents per diluted share, compared to net income of $571 million or 22 cents per share in the prior-year quarter, helped by strong growth in the Cable Network Programming, Television and Publishing segments.

99 Cents Only Stores ((NDN)), the retailer of primarily consumable general merchandise reported second quarter total sales increased 2.7% to $333.56 million from $324.69 million last year. Net income in the quarter rose 34.7% to $12.94 million or 18 cents per diluted share, compared to net income of $9.60 million or 14 cents per share last year.

Teradata Corporation ((TDC)), the enterprise data warehousing solutions provider reported third quarter revenue grew 15% to $489 million from $425 million in the prior-year quarter. Net income in the quarter increased 19% to $75 million or 44 cents per diluted share, compared to net income of $63 million or 36 cents per share in the prior year.

Time Warner Cable Inc. ((TWC)), the cable-television provider reported third quarter revenues increased 5.2% to $4.73 billion from $4.5 billion in the same quarter of 2009. Net income in the quarter rose 34% to $360 million or $1.00 per share, compared to net income of $268 million or 76 cents per share in the prior-year quarter. The company also announced a share repurchase program of $4 billion.

Unilever plc ((UL)), the Anglo-Dutch consumer products maker reported third quarter turnover rose 13.2% to €11.55 billion from €10.2 billion in the year-ago quarter. Net profit in the quarter increased 19% to €1.25 billion or 0.43 euros per share from €1.05 billion or 0.36 euros per share in the prior year quarter.

Whole Foods Market, Inc. ((WFMI)), the natural and organic food company reported fourth quarter sales increased 15% to $2.1 billion from $1.8 billion a year ago. Net income in the quarter surged 101% to $57.5 million or 33 cents per diluted share, compared to net income of $28.6 million or 20 cents per share a year ago, reflecting improved margins on better leverage of costs and wages.