U.S. Stocks Mixed; Treasury Raised Ally Financial Stake

Arthi Gupta
31 Dec, 2010
New York City

U.S. stock futures traded sideways on the last trading session of year 2010. Indexes in Indonesia, Philippines, India and South Korea led world markets. The U.S. Treasury raised its stake in Ally. Dynegy Board accepted $665 million buyout offer from Ichan controlled company.

[R]8:30 AM New York – U.S. stock futures traded sideways on the last trading session of year 2010. Indexes in Indonesia, Philippines, India and South Korea led world markets. The U.S. Treasury raised its stake in Ally. Dynegy Board accepted Icahn''s $665 million buyout offer.[/R]

World markets diverged in 2010 with emerging market leading and most developed market trailing. Markets in Turkey, Russia and India led the world with more than 15% rise. Jakarta benchmark index in Indonesia led Asian indexes with a rise of 46.1% followed by 38% increase in Philippines.

Indexes in China, Australia and Japan closed lower.

Commodities rose the most and cotton soared 89% and silver surged 81%. U.S. Treasury bonds gained 5.5% after losing 3.7% in 2009 according an index tracked by Bank of America Merrill Lynch.

Asian markets traded mixed and European markets declined on the last trading session of 2010.

A two-speed economic recovery will be extended into 2011 with rich nations facing weak growth and emerging markets moving ahead with strong recovery, according to IMF''s chief economist Olivier Blanchard.

In an interview to the Fund''s online magazine, IMF survey, Blanchard noted that along with their strong rebound, emerging economies will be facing tough challenges like managing possible overheating and capital flows. At the same time, growth in advanced economies will remain low, barely enough to bring down unemployment.

Treasury Raises Stake in Ally Financial

The U.S. Department of the Treasury announced that it is converting nearly half of its preferred stock in auto lender Ally Financial, Inc. to common stock, which will increase its holding of common stock of Ally to 74% from the current 56%.

The conversion of $5.5 billion worth of preferred stock is expected to accelerate the Treasury''s ability to exit Ally Financial.

The Treasury acquired the stake in Ally, after it invested $17.2 billion through the Troubled Asset Relief Program''s Automotive Industry Financing Program.

Dynegy Accepts Icahn Offer

Dynegy Inc., the electric utility said on Thursday its board recommended to its shareholders to support the proposed $665 million buyout of the company by an affiliate of Icahn Enterprises LP. The approval paves the way for Icahn''s $5.50 per share acquisition of Dynegy.

McKesson Completes Acquisition of US Oncology

McKesson Corporation, a healthcare services and information technology company completed its acquisition of US Oncology. The total transaction, including the assumption or repayment of the outstanding debt of US Oncology and its subsidiaries, was valued at approximately $2.2 billion. McKesson said it paid $415 million at the time of the closing of the merger.

The acquisition positions McKesson as a complete provider of oncology practice-management offerings that aid the financial performance of oncologists, advance the science of cancer care and provide quality care for patients.

Ramco-Gershenson Acquires the Shoppes at Fox River

Ramco-Gershenson Properties Trust acquired the Shoppes at Fox River, a 135,484 square foot shopping center in Waukesha, Wisconsin for $23.8 million in an all cash transaction.

Rattner Settles Lawsuits

Steve Rattner, the founding principal of private equity firm Quadrangle Group LLC agreed on Thursday to pay $10 million to settle two lawsuits filed by New York Attorney General Andrew Cuomo for an alleged kickback scheme involving New York State''s public pension fund.

In addition to the fine, Rattner will be banned from appearing in any capacity before any public pension fund within New York State for five years.

The settlement stems from allegations that Rattner paid kickbacks in order to obtain $150 million in investments in Quadrangle from the New York State Common Retirement Fund, New York''s largest pension fund.

Time Warner Cable in Talks with Sinclair

Time Warner Cable Inc. said that it is negotiating a long-term agreement with Sinclair Broadcasting Group Inc. The company reiterated it will continue to provide all available programming from the network of ABC, NBC, CBS and Fox, to its customers in the event of a blackout by Sinclair at the end of the year.

Time Warner Cable''s agreement with Sinclair expires on December 31, Friday at midnight, and Sinclair is threatening to take its stations off the air if Time Warner Cable does not agree to its demands for more fees.

Clearwire Chairman Resigns

Clearwire Corp., the mobile broadband networks provider announced on Thursday that its Chairman Craig McCaw decided to resign from his position, effective today. According to a regulatory filing McCaw''s decision to resign is not due to any disagreements with it on any matters relating to the operations, policies, or practices.

Anadarko Rises on Takeover Speculation

Anadarko Petroleum Corp. traded higher following speculation that the oil and gas firm is a takeover target of Anglo-Australian mining giant BHP Billiton.

A report published by the UK''s Daily Mail noted that BHP Billiton could be preparing a $90 per share cash offer for Anadarko. However, both companies did not issue any statement relating to the rumors.

Earnings Review

Air Industries Group, Inc. ((AIRI.PK)), the aerospace and defense company said third quarter net sales climbed 9.1% to $12.0 million, compared to $11.0 million in the same period last year. Net loss in the quarter narrowed 55% to $0.54 million, compared to a loss of $1.2 million in the prior-year quarter.

China Natural Resources Inc. ((CHNR)), the company through its operating subsidiaries are engaged in the acquisition and exploitation of mining rights stated second quarter net sales surged 91% to RMB 24.8 million, compared to RMB 13.0 million in the prior-year quarter. Net loss in the quarter widened 43.3% to RMB 21.5 million or RMB 0.96 per share, compared to a loss of RMB 15.0 million or RMB 0.71 per share in the last year period.

XETA Technologies, Inc. ((XETA)), the national provider of converged communications solutions for the enterprise marketplace reported fourth quarter revenue increased 36% to $24.5 million from $18.1 million in the year-ago quarter, due to continued growth in service revenue and contribution from acquisitions. Net earnings generated in the quarter were $15,000 or $0.00 per share, compared to a net loss of $1.9 million or 19 cents per share in the prior-year quarter.

For the fiscal year 2010, the company reported earnings of $1,373,000, or $0.13 per diluted share, on revenue of $85.7 million compared to a net loss of $10.3 million, or ($1.01) per diluted share on revenue of $71.6 million for the same period ended Oct. 31, 2009.