World Markets Lower on China Rate Hike; U.S. Blizzard Disruptions

Arthi Gupta
27 Dec, 2010
New York City

U.S. stocks trade lower after Asian markets closed lower and European markets were weaker. Airlines decline after blizzard conditions prevail in several Northeastern states. China lifted rates by 25 basis points on Saturday.

[R]9:00 AM New York – U.S. stocks trade lower after Asian markets closed lower and European markets were weaker. Airlines decline after blizzard conditions prevail in several Northeastern states. China lifted rates by 25 basis points on Saturday.[/R]

U.S. stocks are set to trade lower as Asian markets receded at close after China lifted rates over the weekend and European markets were lower as well. U.S. economic data this week are expected to provide more insights and airlines are trading lower as Northeast states are facing travel disruptions.

Investors are looking ahead this week the release of consumer confidence, pending home sales, weekly jobless claims and crude oil inventory. Consumer confidence and pending home sales are expected to show a rising economic activities.

Snow blizzard has swept the states from North Carolina to Massachusetts and residents are bracing for more than 15 inches of snow. Millions of commuters are bracing difficult travel conditions. Traffic at New York airports is halted.

China Hikes Interest Rate

The People''s Bank of China announced on Saturday revised interest rates by 25 basis points.

The benchmark 1-year deposit and lending rates were raised by 0.25 percentage points each to 2.75% and 5.81%, respectively. The central bank also adjusted other deposit and lending interest rates accordingly. The rate revision comes close on the heels of a rate adjustment of a similar magnitude on October 19th.

Beijing municipal government decided to limit the issue of new vehicle license at 240,000 next year. The latest move will cut new car registrations in 2011 to near one-third of this year''s sales to ease a growing traffic in the center of the city.

According to new rules, vehicles that are registered outside Beijing will have to apply for a permit to enter the Chinese capital.

Yingli Green Buys Back Senior Notes

Yingli Green Energy Holding Co. Ltd. said that it repurchased $171.3 million aggregate principal amount of its zero coupon convertible senior notes due 2012 for a total cash consideration of $199.4 million based on a yield to maturity or yield to put of 5.125%.

Toshiba Sells Microchip Unit to Sony

Toshiba Corp. and Sony Corp. signed a non-binding memorandum of understanding intended to transfer to Sony, the semiconductor fabrication facilities owned by Toshiba and operated by Nagasaki Semiconductor Manufacturing Corporation.

Toyota Motor Corp., the Japanese automaker said its worldwide production for the month of November declined 7.8% from last year, including subsidiaries Daihatsu Motor Co., Ltd. and Hino Motors, Ltd.

Honda Motor Co. Ltd. reported a 5.4% growth in worldwide production for November.

Retail Opportunity Acquires Three Shopping Centers

Retail Opportunity Investments Corp., a fully integrated owner and operator of shopping centers, announced today that it completed the acquisition of Gateway Village, Halsey Crossing and Division Crossing and acquired a $58 million loan portfolio on the west coast.

The company completed the acquisition of Gateway Village for an aggregate purchase price of $34 million and closed on the acquisition of two grocery chain anchored neighborhood shopping centers in Oregon for an aggregate purchase price of $18.0 million.

HSBC Terminates Agreement with H&R

HSBC has given notice to H&R Block that it is immediately terminating the long-term contract under which HSBC provided all of H&R Block’s refund anticipation loans and some of its refund anticipation checks, as a result of a regulatory directive by the Office of the Comptroller of the Currency.

Earnings Review

Cal-Maine Foods, Inc. ((CALM)), the producer and marketer of shell eggs reported second quarter net sales rose 2.3% to $234.52 million, from $229.23 million for the same quarter last year. Net income in the quarter declined 5.6% to $15.19 million or 63 cents per diluted share, compared to net income of $16.09 million or 67 cents per share last year.

Wimm-Bill-Dann Foods OJSC ((WBD)), the Russian dairy and beverage maker reported third quarter revenues climbed 22.3%% to $640.9 million, from $524.1 million in 2009 on 23.8% increase in sales of dairy products despite higher raw milk prices. Net income in the quarter plunged 52.7% to $21 million, compared to net income of $44.5 million a year ago.