U.S. Retail Sales, CPI Rise; JPMorgan Net Surges 47%

Arthi Gupta
14 Jan, 2011
New York City

U.S. stocks fell after China lifted reserve requirement ratio again. U.S. retail sales and consumer prices rose in December but less than expected. Intel expressed confidence about the outlook and JPMorgan earnings soared. The SEC to probe sovereign wealth funds transaction.

[R]9:00 AM New York – U.S. stocks fell after China lifted reserve requirement ratio again. U.S. retail sales and consumer prices rose in December but less than expected. Intel expressed confidence about the outlook and JPMorgan earnings soared. The SEC to probe sovereign wealth funds transaction.[/R]

U.S. stocks digested strong earnings from Intel and JPMorgan and less than expected retail sales in December. Germany also reported a sharp increase in inflation and China unexpectedly raised the reserve requirement by 50 basis points with effect from January 20.

Intel also expressed confidence about the future. Coinstar plunged more than 23% after DVD rentals dropped.

Asian markets traded mixed and European indexes declined after inflation rose in Germany and smaller nations in the euro-zone.

U.S. Retail Sales, Consumer Prices Rise

Retail sales in the U.S. showed a moderate increase in the key holiday shopping month of December, according to a report released by the Commerce Department on Friday.

The report showed that retail sales increased 0.6% in December following an unrevised 0.8% increase in November.

Excluding a 1.1% increase in sales by motor vehicle and parts dealers, retail sales rose 0.5% in December compared to a 1.0% increase in November.

Consumer prices in the U.S. rose by slightly more than expected in the month of December, the Labor Department revealed in a report released on Friday, with the price growth in large part to a substantial increase in energy prices.

The Labor Department said its consumer price index rose 0.5% in December after edging up by an unrevised 0.1% in November.

SEC Probes Transactions with Sovereign Wealth Funds

The U.S. Securities and Exchange Commission is probing transactions between U.S. financial service firms and sovereign-wealth funds, according to the Wall Street Journal on Thursday.

The SEC is said to have sent letters to as many as ten firms in the past week, including Citigroup, Inc. and private-equity firm Blackstone Group LP.

Target Acquires Interests in Canada-based Zellers

Target Corporation announced a deal to buy leasehold interests in up to 220 sites currently operated by Canadian retailer Zellers Inc., a subsidiary of Hudson''s Bay Co., for C$1.83 billion or about $1.85 billion. This transaction will allow Target to open its first Target stores in Canada beginning in 2013.

PSEG Power Sells Texas Assets

PSEG Power, a subsidiary of Public Service Enterprise Group agreed to the sale of its Texas generating assets. The assets consist of two 1,000 megawatt gas-fired combined cycle generating units that will be sold in two separate transactions. The transactions have a combined equity value of $687 million, or $343 per Kw.

Baytex Purchases Heavy Oil Assets

Baytex Energy Corp., the Canada-based oil and natural gas company agreed to acquire heavy oil assets for C$156.5 million in the regions of northern Alberta and western Saskatchewan.

Sanofi Hopes to Reach Agreement with Genzyme

Reports said on Friday that French pharmaceutical company Sanofi-Aventis SA is hoping to reach an agreement with biotechnology company Genzyme Corp. in a takeover deal for Genzyme at a price of around $76 per share, including guaranteed value certificates which depend on future performance.

Bharti Airtel Finalizes Agreement with IBM

IBM and Bharti Airtel today announced the completion of contract negotiations for technology services spanning 16 African countries.

As part of the 10-year agreement signed in December 2010, IBM will deploy and manage the information technology infrastructure and applications to support.

Earnings Review

AT&T Inc. ((T)), the telecommunications provider stated that it estimates to incur a $2.7 billion charge pre-tax in the fourth quarter due to a change in its accounting method for pension and other postretirement benefits. The change, which the company expects will improve the transparency of financial reporting.

Coinstar, Inc. ((CSTR)), the automated retail solutions provider lowered its fourth quarter outlook. Revenues for the fourth-quarter are currently estimated at about $391 million, compared with previous guidance in the range of $415 million to $440 million.

The company currently estimates earnings from continuing operations in the range of $0.65 to $0.69 per share, compared to prior guidance range of $0.79 to $0.85 per share.

Intel Corporation ((INTC)), the semiconductor chip maker said fourth quarter revenue rose 8% to $11.46 billion from $10.57 billion in the same quarter last year. Net income in the quarter surged 48% to $3.39 billion or 59 cents per diluted share, compared to net income of $2.28 billion or 40 cents per share for the year-ago quarter.

Revenue for the full year 2010 rose 24% to $43.62 billion from $35.13 billion the prior year. For the full-year 2010, the company reported net income of $11.67 billion or $2.05 per share, compared to $4.37 billion or $0.77 per share for the full-year 2009.

JPMorgan Chase & Co. ((JPM)), the financial services firm reported fourth quarter total net revenue grew 13% to $26.1 billion from $23.16 billion in the prior-year quarter. Net income in the quarter soared 47% to $4.83 billion or $1.12 per share, compared to net income of $3.28 billion or 74 cents per share last year.

M&T Bank Corporation ((MTB)), the bank holding company reported net income in the fourth quarter rose 54% to $189.67 million or $1.59 per share from $122.91 million or $1.04 per share in the year-ago period. Net interest income for the quarter rose 3% to $574.09 million from $558.71 million last year.

Shuffle Master, Inc. ((SHFL)), the gaming products company reported fourth quarter total revenue increased 7% to $58.60 million from $54.57 million last year. Net income in the quarter declined 9% to $5.68 million or 10 cents per diluted share, compared to net income of $6.24 million or 12 cents per share in the previous year.

Webster Financial Corporation ((WBS)), the bank holding and financial holding company said net income generated in the fourth quarter was $24.95 million or 30 cents per diluted share, compared to a net loss of $54.39 million or 84 cents per share in the year-ago period.

The company''s total interest income for the period declined 4.1% to $174.02 million from $181.46 million in the prior year period.