U.S. Indexes Gain; Alcoa Net Surges 2-Year High

Arthi Gupta
11 Jan, 2011
New York City

U.S. indexes gained after Alcoa swung to profit for the last quarter and the year. Intel agreed to pay Nvidia licensing fees of $1.5 billion. Simon Property gave up takeover bid for UK based CSC. BMO Financial Group agreed to buy Hong Kong-based Lloyd George Management.

[R]11:20 AM New York – U.S. indexes gained after Alcoa swung to profit for the last quarter and the year. Intel agreed to pay Nvidia licensing fees of $1.5 billion. Simon Property gave up takeover bid for UK based CSC. BMO Financial Group agreed to buy Hong Kong-based Lloyd George Management.[/R]

U.S. indexes gained on earnings and Japan lending support to euro-zone bond offering.

Alcoa fourth quarter sales increased 4% to $5.65 billion. Apollo Group first quarter net revenue increased 5.4% to $1.33 billion. Lennar Corp fourth quarter total revenues declined 6% to $860.12 million. Supervalu third quarter total net revenue fell to $8.7 billion. AMD chief resigned unexpectedly.

Asian markets traded mixed on concerns of global economic recovery and European markets climbed ahead of bond sales from Portugal, Spain and Italy. Portugal said it will not seek a bailout because it does not need financial assistance. China’s foreign reserves surge to a record $2.4 trillion. Alcoa reported best results in two years.

The Federal Reserve Bank of Atlanta President Dennis Lockhart said he was """"comfortable"""" with his decision to back the central bank's new asset buying plan.

He noted the Federal Reserve's $600 billion quantitative easing program provides support to a shaky recovery and insurance against serious downsides.

Japan is planning to buy euro-zone sovereign bonds to help the single currency region deal with its debt crisis, the nation's finance minister said on Tuesday. Yoshihiko Noda said Japan will use its foreign exchange reserves to buy about 20% of bonds to be issued later this month under a special assistance program to help the Irish Republic.

Intel Settles Patent Dispute with Nvidia

Intel Corp. agreed to pay $1.5 billion to Nvidia Corp. over the next five years under a patent settlement agreement. The two companies have also agreed to drop all outstanding legal disputes.

Under today's settlement, Nvidia signed a new six-year cross-licensing agreement with Intel, under which Intel will have continued access to Nvidia's full range of patents.

HB Fuller Forms JV with Burak Özberk

H.B. Fuller Company signed an agreement to enter into a joint venture with Burak Özberk, its longstanding agent to strengthen its foothold in Turkey. A new entity will be created, with H.B. Fuller owning majority control.

The results of the newly created entity would be reported in the company's Europe, India, Middle East and Africa segment. H.B. Fuller expects the new entity to be fully operational within the next six months.

Simon Property Drops Bid for CSC

Simon Property Group, Inc., the shopping mall operator said it continues to oppose the proposed acquisition by CSC of the Trafford Centre, and abandoned its nearly £3 billion bid for UK-based real estate investment trust Capital Shopping Centres Group plc.

Simon said it has no plan to make a formal offer for CSC, as the company will not give access to its accounts.

Goldman Sachs Contemplates More Financial Disclosures

Goldman Sachs Group Inc. agreed to disclose more financial information to investors, including how much revenue the company generates from its own trading and investing, according to media reports on Monday.

Analysts and investors have for a long time sought the breakdown of revenues and earnings from proprietary trading.

BMO Financial Group Buys Lloyd George Management

BMO Financial Group announced a deal to buy Hong Kong-based Lloyd George Management, a firm with nearly $6 billion in assets under management. The terms of the deal were undisclosed.

IDEX Acquires Microfluidics International

IDEX Corporation announced that it entered into a merger agreement to acquire Microfluidics International Corporation for $1.35 per share. The transaction is expected to close in the first quarter of 2011.

Earnings Review

Alcoa Inc. ((AA)), the aluminum producer said fourth quarter sales rose 4% to $5.65 billion from $5.43 billion in the same quarter last year. Net income generated in the quarter was $258 million or 24 cents per diluted share compared to a net loss of $277 million or 28 cents per share for the year-ago quarter.

Net sales for the full year 2010 increased 14% to $21.01 billion from $18.44 billion last year. For the full year the company reported net income of $254 million or $0.24 per share compared to a net loss of $1.15 billion or $1.23 per share for the full year 2009.

Apollo Group, Inc. ((APOL)), the private education provider said first quarter consolidated net revenue increased 5.4% to $1.33 billion from $1.26 billion in the same quarter last year. Net income in the quarter fell 2% to $235.4 million or $1.61 per diluted share, compared to net income of $240.1 million or $1.54 per share in the prior-year quarter.

Lennar Corporation ((LEN)), the home builder stated fourth-quarter total revenues declined 6% to $860.12 million from $913.74 million in the prior-year quarter. Net earnings in the quarter fell 10% to $32.03 million or 17 cents per diluted share, compared to net earnings of $35.57 million or 19 cents per share last year.

Phillips-Van Heusen Corporation ((PVH)), the apparel maker estimates GAAP earnings for the fourth quarter of fiscal year 2010 of $0.69 per share, up from the prior range of $0.63 to $0.68 per share.