CSC in Deal Talk for $11B

Elena
04 Apr, 2006
New York City

Stocks were steady at opening, in line with futures predictions. Among stocks in focus, Computer Sciences is expected to be active as the company is in talks to sell itself for about $10.6 billion, and also is expected to announce 5,000 job cuts. In other news, Arcelor announced a series of measures to spurn Mittal Steel''''s hostile offer.

[R] 9:45AM Stocks were steady at opening.[/R]
Stocks lacked direction in early Tuesday trading with investors reluctant to make significant moves before the release of key economic data. In the opening minutes, the Dow Jones industrial average was up .08 at 11,145.02, the Nasdaq Composite was unchanged and the S&P’s 500 index climbed .03 to 1,297.84. Among stocks in focus, Computer Sciences ((CSC)) is expected to be active on deal talk and a report it will cut jobs. The company is in talks to sell itself for more than $10.6 billion, and also is expected to announce 5,000 job cuts. Merrill Lynch ((MER)) lowered its Q1 net earnings forecast by $1.2 billion after taxes as a result of a new accounting standard for stock-based employee compensation. In other corporate news, Arcelor announced a series of measures to spurn Mittal Steel's hostile offer. The measures included putting Dofasco into a Dutch foundation and announcing a special cash return of $6 billion. Although, the broad market was lackluster, energy stocks showed visible weakness on profit taking after yesterday’s gains. HMO, defense, and networking stocks also moved to the downside. Among networking stocks, shares of Ciena ((CIEN)) fell 3.8% after the company announced that it plans to sell up to $250 million in convertible senior notes due 2013. Airline stocks posted significant strength in early trading, benefiting from the decline in oil prices. As the price of gold advanced, gold stocks also moved to the positive territory, rebounding from weakness in the previous session.


[R]9:15AM Stock futures pointed to a modestly higher opening.[/R]
U.S. stock futures were sitting near the flat line, pointing to a slightly higher start on optimism about corporate earnings at the start of the new earnings season, which will be kicked off by aluminum producer Alcoa Inc. ((AA)) next week. Stocks seemed likely to continue the mixed performance shown at close yesterday, when averages reversed from earlier gains and the Nasdaq fell into negative territory after setting a five-year intraday high. On Tuesday, buying interest is expected to remain subdued with investors awaiting the March employment report. In company news, Computer Sciences ((CSC)), computer services company, advanced 4.7% in pre-market trading after it said it is considering a possible sale of the company. The company said it plans to cut 5,000 employees in the next two years, mostly in Europe. Shares of Merrill Lynch ((MER)) dropped 2.8% in pre-market trading after the company said it will take a $1.2 billion charge in the Q1 after it adopts new accounting standards for stock options. S&P 500 futures were up 0.80 point, just barely above fair value. Dow Jones industrial average futures rose 6 points, and Nasdaq 100 futures rose 1.25 point.

Crude oil prices retreated on speculations of strong crude stockpiles. Light sweet crude May delivery dropped 64 cents to $66.10 a barrel. London Brent dropped 50 cents to $66.34. European gold traded mixed Tuesday. In London gold traded at $585 per troy ounce, down from $589.90. In Zurich the precious metal rose to $586.70 from $582.90. In Hong Kong gold surged $1.30 to $585.80. Silver fell to $11.69 from $11.70. The U.S. dollar lost ground versus major currencies. The euro traded at $1.2181, up from $1.2141. The dollar bought 117.51, down from 117.65. The British pound was quoted at $1.7459, up from $1.7384.

AES Corp, ((AES)), power company, reported Q4 net income of 27 cents a share, up 77% from 16 cents a share in the same period last year. Earnings from continuing operations came to 27 cents a share, up from 3 cents a share. Adjusted earnings came to 28 cents a share, up from 10 cents a share last year. Revenue soared 18%. The company was expected to earn 19 cents a share, according to analysts’ forecasts. AES added it expects 2006 earnings from continuing operations of 90 cents a share and adjusted earnings of 95 cents a share, compared to analyst estimate of $1.02 a share.

Walgreen Co, ((WAG)), drug store operator, reported that March same-store sales advanced 4.3%, while total sales advanced 9.2%. This year''s March sales were influenced by the shift of the Easter holiday to April from March last year. To combat the """"""""""""""""Easter effect,"""""""""""""""" Walgreen will report next month total and same-store sales for both April and for the combined months of March and April.

Delta & Pine Land Co, ((DLP)), cotton seed manufacturer, reported Q2 net income of 40 cents a share, down from 48 cents a share in the year-ago on 4% revenue decline. Delta & Pine raised its 2006 earnings outlook to $1.15 to $1.25 a share, after charges of 10 cents a share related to its lawsuit against Pharmacia Inc. and Monsanto Co.

Delta & Pine Land Co reported that March same-store sales advanced 4.3%, while total sales advanced 9.2%. This year''s March sales were influenced by the shift of the Easter holiday to April from March last year. To combat the """"""""""""""""Easter effect,"""""""""""""""" Walgreen will report next month total and same-store sales for both April and for the combined months of March and April.

Layne Christensen Co, ((LAYN)), energy markets provider, reported that Q4 profit advanced to 20 cents a share, more than double from 9 cents a share in the year-earlier period on 63.8% revenue growth, missing analysts’ forecasts for a profit of 25 cents a share. The advance in profitability during the quarter was primarily due to strong performance by the energy and geo construction divisions.


[R]8:45AM Sensex registers second record in April.[/R]
Sensex in India rose 74 points to 11,638 at close on strong buying from recently launched mutual funds. Banks and select industrial stocks remained in favor. 1,557 stocks advanced and 978 stocks declined with 49 remaining unchanged. At the morning opening Sensex managed to gain 150 points, however settled at a lower level in a volatile trading. In the last six months market has Sensex has advanced 51%.

Reliance Industries raised $550 million in a private placement at $1.55 per share for a 27 million ton refinery project. RIL closed at Rs. 840. Other refineries joined the rally. HCPL and BPCL rose 7% and 4% in the session. VSNL, international telecom and Internet services provider rose 5.5% to Rs. 500 on the recent acquisition news. Tata Motors lost 1% despite the news that March unit sales rose 27% to a record level of 55,400. Mphasis BFL dropped 2% on the news that the acquisition offer from American company EDS is at a discount to the current market price. Mphasis trades at Rs. 211 and the offer is at Rs. 204.50 per share. In other IT news Geometric Software rose 20% in anticipation of Q4 earnings results. In other major movers, Thermax and BOC India jumped 14% and 10% respectively. Apollo Tyres rose 10% on the news that the management is to discuss the various financing options to fund new acquisitions.


[R] 8:15 AM European averages lost ground at mid-day.[/R]
European markets lost ground at mid-day, following a strong trading session Monday. The decline was contributed to a mixed closing of U.S. markets overnight as investors locked in profits, as well as weakness in mining stocks, such as Rio Tinto and BHP Billiton, which failed to sustain recent gains. On the merger-and-acquisition front, Arcelor eased 1.8% after it unveiled a series of takeover defenses, including a special payment of more than $6 billion to shareholders. Automakers brightened the gloomy mood as DaimlerChrysler, Porsche, Volkswagen gained, following the release of U.S. sales data yesterday. The German DAX 30 fell 0.2%, the French CAC 40 lost 0.5%, and London FTSE 100 dropped 0.4%.


[R]7:45AM Asian markets finished largely higher. The Nikkei dropped.[/R]
Asian-Pacific benchmarks finished broadly higher. The Nikkei ended its seven-session winning streak to close in the negative after hitting a six-year high on Monday. The Japanese index fell 0.2% to 17,292.91, dragged by weakness in the tech sector and exporter blue-chip stocks like Kyocera, down 1.7%, Tokyo Electronics 1.6%, Honda Motor and Toyota Motor each falling 0.5%. Data released by BOJ, which showed that Japan’s monetary base declined 1% for the first time in five years, caused weakness among banking and insurance stocks with Mitsubishi UFJ Holding falling 1.6% and Mizuho Financial Group, down 0.3%. Across the region, Hong Kong’s Hang Seng reversed from earlier losses to rise 0.2% to 16,100.09, hitting a five-year high on fresh fund flows. South Korea’s Kospi advanced 0.4%, led by tech and auto stocks. India’s Sensex hit an all-time high of 2.5% at 11,564.36, lifted by foreign fund buying.