U.S. Stocks Fall; Comerica Acquires Sterling Bancshares

Arthi Gupta
18 Jan, 2011
New York City

U.S. indexes fell and Apple CEO Steve Jobs sought medical leave. The IEA raised oil demand forecast for 2011. Massmart approved proposed acquisition by Wal-Mart. Comerica agreed to acquire Sterling Bancshares in $1 billion all-stock deal. Danaher sold Pacific Scientific business for $685 million.

[R]9:00 AM New York – U.S. indexes fell and Apple CEO Steve Jobs sought medical leave. The IEA raised oil demand forecast for 2011. Massmart approved proposed acquisition by Wal-Mart. Comerica agreed to acquire Sterling Bancshares in $1 billion all-stock deal. Danaher sold Pacific Scientific business for $685 million.[/R]

Asian and European markets rose ahead of earnings announcements. Shanghai indexes rebounded from the three-month low and the benchmark index in India soared more than 1.1% after better than expected earnings.

Apple, Citigroup, Google and Goldman Sachs Group Inc., are some of the leading companies scheduled to release earnings this week.

IEA Lifts Oil Demand Forecast for 2011

The International Energy Agency upwardly revised its global oil demand forecast reflecting buoyant global economic growth and cold northern hemisphere weather.

The IEA, in its monthly Oil Market Report released today, assesses 2010 global oil product demand at 87.7 million barrels per day, up 2.7 mbd annually, and revises up that of 2011 by 1.4 mbd to 89.1 mbd.

Apple CEO Steve Jobs Takes Medical Leave

Apple Inc. Chief Executive Officer Steve Jobs is on a medical leave to focus on his health, raising uncertainty over the future direction of the computing and electronics giant.

Chief Operating Officer Tim Cook will be responsible for all day-to-day operations of the company.

This is the third time in the past decade that the CEO is taking medical leave of absence. He took medical leave in 2004, during which he underwent a surgery for pancreatic cancer, and then again in the first-half of 2009, returning to the company in late June of that year after receiving a liver transplant.

Goldman Sachs Restricts Facebook Shares to Non-US Clients

Goldman Sachs Group Inc. said it would limit its private placement of Facebook shares to investors outside the United States, according to media reports.

In an e-mailed statement to The Wall Street Journal, Bloomberg News and Reuters, the investment banker noted that the placement, under ""intense media attention"", might violate market regulations.

Virgin America Orders 60 A320s from Airbus

Airbus received a firm order from San Francisco, California-based airline operator Virgin America for 60 A320s, including 30 A320neo aircraft. Virgin America''s contract marks the 10,000 order for Airbus.

Hutchison Whampoa Contemplates to Spin off Its Ports Assets

Hutchison Whampoa Ltd., the Hong Kong-based multinational conglomerate said that it plans to spin off its ports assets, Hutchison Port Holdings Trust, in a separate listing on the Singapore stock exchange.

The company did not disclose the amount of money it hopes to raise from the listing, but media reports said that the IPO could raise up to $6 billion.

The company intends to use the proceeds from the sale to help pay for expansion plans in ports and other businesses.

GE Plans JV with China

General Electric Co. is planning to announce certain joint ventures and orders in Chinese rail, aviation and energy projects during President Hu Jintao''s visit to the U.S. The company expects the projects to yield at least $2.1 billion in sales and create about 5,000 jobs.

The joint ventures and orders include high-speed rail, locomotives, power turbines, clean coal technology and avionics. The initial focus of the 50-50 joint venture is said to develop an integrated avionics system for China''s C919 passenger jet.

Massmart Approves Proposed Acquisition by Wal-Mart

Massmart Holdings Ltd., the South African wholesaler said on Monday that its shareholders have voted in favor of Wal-Mart Stores Inc.''s offer to acquire 51% of Massmart at a cash price of R148 per share.

Comerica Acquires Sterling Bancshares

Comerica Inc., the financial services firm said the company and Sterling Bancshares, Inc. entered into an agreement for Comerica to acquire Sterling in a stock-for-stock transaction to accelerate its growth in Texas. The deal has an aggregate implied value of around $1.027 billion in Comerica common shares.

Danaher Announces Sales of Pacific Scientific Business

Danaher Corporation signed an agreement to sell its Pacific Scientific Aerospace business (other than the Artus business) to Meggitt PLC, a global aerospace and defense company.

Danaher simultaneously received a binding offer from Meggitt to acquire the Artus business which remains open for 12 months.

Upon the closing of both transactions, Meggitt will pay Danaher an aggregate cash purchase price of $685 million, subject to post-closing adjustments.

Western Gas Buys Assets from EnCana

Western Gas Partners, LP agreed to buy certain midstream assets from Encana Oil & Gas (USA) Inc., a unit of Canadian natural gas producer EnCana Corp. for total consideration of $303.3 million.

Under the deal, Western Gas will enter into long-term, fee-based agreements with Encana to gather and process existing gas production, and to expand the existing gathering systems and processing capacity to meet future needs in the basin.

Earnings Review

Comerica Incorporated ((CMA)), the financial services company reported fourth quarter net income was $96 million, compared to a loss of $29 million in the prior-year quarter. Net interest income rose 2.3% to $405 million from $396 million in the year-ago quarter.

Delta Air Lines, Inc. ((DAL)) reported fourth quarter total operating revenue rose 14.3% to $7.79 billion from $6.81 billion in the prior-year quarter. Net income generated in the quarter was $19 million or 2 cents per diluted share, compared to a loss of $25 million or 3 cents per share last year.

General Motors Company ((GM)), the global automotive company said Chevrolet''s U.S. sales increased 16% in 2010, mainly benefiting from better fuel efficiency, which rose on the list of customer demands.

Sterling Bancshares, Inc. ((SBIB)), the bank holding company reported fourth quarter net income rose 11.8% to $1.9 million or 2 cents per diluted share, compared to net income of $1.7 million or 2 cents per share in the prior year quarter.

Net interest income after provision for credit losses declined 4.2% to $34.3 million, compared to $35.8 million in the same quarter last year.

TD Ameritrade Holding Corp. ((AMTD)), the online broker reported first quarter net revenues rose 5% to $656.2 million from $624.62 million in the prior-year quarter. Net income in the quarter increased 6.5% to $145.04 million or 25 cents per diluted share, compared to net income of $136.24 million or 23 cents per share last year.