U.S. Indexes Lower; Amex, BlackRock, CSX Net Surge

Arthi Gupta
25 Jan, 2011
New York City

U.S. indexes traded lower on mixed earnings. The ILO forecasted global unemployment rate of 6.1% and the IMF estimated world economic growth at 4.4% in 2011. Amgen acquired BioVex in $1 billion deal.

[R]8:45 AM New York – U.S. indexes traded lower on mixed earnings. The ILO forecasted global unemployment rate of 6.1% and the IMF estimated world economic growth at 4.4% in 2011. Amgen acquired BioVex in $1 billion deal.[/R]

Mixed trading was observed in the Asian and European markets despite improved earnings and optimism of global economic recovery.

Traders brace for the outcome of the two-day FOMC meeting and the central bank is expected to make an announcement regarding quantitative easing tomorrow.

The Reserve Bank of India raised its key interest rates by 25 basis points to rein in high inflation. The repo, the rate at which the RBI lends was raised to 6.50% from 6.25% and the reverse repo, the rate at which the central bank borrows from banks to 5.50% from 5.25%. The bank had hiked interest rates six times in 2010.

ILO Forecasts Weak Jobs Recovery

The International Labor Office on Tuesday warned that weak recovery in jobs is likely to continue in 2011, especially in developed economies.

In its annual employment trends survey, the ILO said official global unemployment totaled 205 million in 2010, essentially unchanged from 2009, despite acceleration in economic growth. The Geneva-based ILO projects a global unemployment rate of 6.1%, equivalent to 203.3 million unemployed through 2011.

IMF Lifts Global Growth Outlook

The International Monetary Fund forecasted world economic growth at 4.4% in 2011. It represented an upward revision from 4.2% expansion projected in October. The IMF said robust economic activity in the second half of 2010 led to the upward revision.

IMF upgraded 2011 growth forecast for the U.S. economy by 0.7 percentage point to 3%.

Cocoa Prices Surge on Ban

The export ban announced by the alternative government of Ivory Coast caused a surge in cocoa prices in the international market.

Alassane Ouattara, who won Ivory Coast''s presidential elections, wrote to the country''s cocoa and coffee exporters on Monday asking them to stop exporting the much-valued bean for one month to put pressure on the defeated President Laurent Gbagbo, who refused to cede power.

Ecopetrol and Talisman Energy Acquire BP''s Colombian Business

Ecopetrol S.A., Colombia''s state-run oil company and Canada''s Talisman Energy Inc. completed the acquisition of BP plc''s Colombian business, BP Exploration Co. (Colombia) Ltd., for $1.75 billion. Ecopetrol will own 51% of the new company, while Talisman will own the remaining 49%.

Amgen Acquires BioVex

Amgen and Group, Inc. said they reached an acquisition agreement under which Amgen agreed to buy BioVex Group, Inc., a privately held, venture-funded, biotechnology company. Following the completion of the transaction, BioVex would become a wholly owned subsidiary of Amgen.

Amgen agreed to pay up to $1 billion of which $425 million in cash at closing and up to $575 million in additional payments upon the achievement of certain regulatory and sales milestones.

Mylan Settles With Pfizer

Mylan Inc. said it entered into a settlement agreement with Pfizer Inc. resolving litigation related to Caduet Tablets known generically as Amlodipine Besylate/Atorvastatin Calcium Tablets.

Earnings Review

American Express Company ((AXP)), the diversified global financial services company reported fourth quarter net revenues rose 13% to $7.32 billion from $6.49 billion last year. Net income in the quarter increased 48% to $1.05 billion or 88 cents per diluted share compared to net income of $0.71 billion or 60 cents per share a year ago, helped by higher revenues across segments as well as lower loan loss provisions.

For the full year 2010, net revenues rose 13% to $27.82 billion from $24.52 billion a year ago. Net income during the period was $4.06 billion or $3.35 per share compared to $2.13 billion or $1.54 per share last year.

Amgen, Inc. ((AMGN)), the independent biotechnology medicines company said fourth quarter total revenue increased 1% to $3.84 billion from $3.81 billion in the same quarter of 2009. Net income in the quarter rose 10% to $1.02 billion or $1.08 per diluted share compared to net income of 931 million or 92 cents per share in the prior-year quarter, helped mainly by a favorable tax settlement.

For the full-year 2010, total revenue increased 3% to $15.05 billion from $14.64 billion in the year-ago. Annual net income increased 4% to $4.63 billion or $4.79 per share from $4.61 billion or $4.51 per share in the previous year.

Baker Hughes Incorporated ((BHI)), the oil field services company reported fourth quarter revenue surged 82% to $4.42 billion from $2.43 billion last year. Net income in the quarter soared 299% to $335 million or 77 cents per diluted share compared to net income of $84 million or 27 cents per share last year.

For the fiscal year 2010, revenues climbed 49% to $14.41 billion from $9.66 billion a year ago. Annual net income was $812 million or $2.06 per share compared to $421 million or $1.36 per share for the year 2009.

BlackRock, Inc. ((BLK)), the investment management firm reported fourth quarter total revenue rose 62% to $2.49 billion from $1.54 billion in the previous year. Net profit in the quarter surged 157% to $657 million or $3.35 per diluted share compared to net profit of $256 million or $1.62 per share a year ago.

CSX Corporation ((CSX)), the transportation company reported fourth quarter revenue grew 21% to $2.8 billion from the prior-year quarter. Net income in the quarter rose 48% to $430 million or $1.14 per diluted share compared to net income of $303 million or 77 cents per share in the year-ago quarter.

Full-year earnings were $1.56 billion or $4.06 a share, compared with $1.14 billion or $2.89 a share for 2009.

E. I. du Pont de Nemours and Company ((DD)), the chemicals maker stated fourth quarter sales rose 15% to $7.4 billion versus $6.42 billion in the prior year. Net income in the quarter declined 15% to $376 million or 40 cents per diluted share compared to net income of $441 million or 48 cents per share in the previous year.

McDonald''s Corporation ((MCD)), the fast food restaurants operator reported fourth quarter total revenues rose 4% to $6.21 billion from $5.97 billion in the prior-year quarter on comparable sales increase of 5.0% for the quarter. Net income in the quarter climbed 2% to $1.24 billion or $1.16 per share compared to net income of $1.22 billion or $1.11 per share last year.

Annual revenues grew 6% to $24.07 billion. For fiscal year 2010, the company''s net income grew 9% to $4.95 billion or $4.58 per diluted share.

SL Green Realty Corp. ((SLG)), the real estate investment trust said fourth quarter revenues increased 10% to $267.25 million from $243.04 million in the same period last year. Net income generated in the quarter was $7.21 million or 9 cents per diluted share compared to net loss of $5.12 million or 7 cents per share in the year-ago quarter.

Texas Instruments Incorporated ((TXN)), the maker of mobile phone chips said fourth quarter revenue rose 17% to $3.53 billion from $3.01 billion in the same quarter last year. Net income in the quarter rose 44% to $942 million or 78 cents per diluted share compared to net income of $655 million or 52 cents per share for the year-ago quarter.

Revenue for the full year 2010 increased 34% to $13.97 billion from $10.43 billion the prior year. For the full year 2010, the company reported net income of $3.2 billion or $2.62 per share compared to $1.5 billion or $1.15 per share for the full year 2010.

VMware, Inc. ((VMW)), the software solutions provider reported fourth quarter revenues grew 37% to $835.6 million from $608.2 million a year ago. Net income in the quarter surged 114% to $120 million or 28 cents per diluted share compared with net income of $56 million or 14 cents per share last year.

Revenue for the full year 2010 surged 41% to $2.85 billion from $2.02 billion. For the full year 2010, the company said its net income rose to $357 million or $0.84 per share from $197 million or $0.49 per share the prior year.