U.S. Indexes Higher; UPS Net Surges 48%, BP Reinstates Dividend

Bikram Pandey
01 Feb, 2011
New York City

U.S. stocks gained in early trading tracking gains in Europe and commodities. Manufacturing indexes in China, India and euro zone gained in January. Manufacturing is expected to advance in U.S. BP Plc reinstated dividend and reported annual loss in two decades. UPS net surged 48%.

[R]1:35 AM New York – U.S. stocks gained in early trading tracking gains in Europe and commodities. Manufacturing indexes in China, India and euro zone gained in January. Manufacturing is expected to advance in U.S. BP Plc reinstated dividend and reported annual loss in two decades. UPS net surged 48%.[/R]

U.S. indexes trade higher as markets in Asia and emerging economies face rising inflation. Asian markets generally gained and Chinese markets closed higher ahead of Lunar New Year holiday. UPS earnings rose 44% and BP reinstated dividend after three quarters.

U.S. manufacturing index rose at the fastest pace since 2004 in January as domestic consumption rose.

Two separate manufacturing indexes in China indicated steady expansion and a private survey in India also showed the expansion for the 22nd month in a row. However, input prices rose at the fastest pace in China. Manufacturing expanded in euro zone.

Markets in India plunged sharply on the worries that crude oil and other commodities prices may remain high in the short term.

Crude oil in London trading soared above $100 a barrel as Egypt government struggles to hold on and U.S. demands “orderly regime change.”

European markets rebounded from yesterday’s decline after commodities and crude oil prices rose. Manufacturing index in euro zone showed expansion and the index increased to 57.3 in January from 57.1 in December according to economic data consultancy Markit Economics.

Euro-zone seasonally adjusted unemployment rate in December was 10%, unchanged compared to November and fell from 9.9% from a year ago. Unemployment compared to a year ago rose 0.43 million in the EU27 and 0.18 million in the euro area.

Earnings Review

BP Plc declined 1.3% in London trading after the oil giant reported fourth quarter adjusted earnings of $4.36 billion. BP also reinstated dividend of 7 cents a share for the quarter ending in December. The dividend rate is half the rate before the spill and was reinstated after three quarters.

Net income in the quarter increased to $5.6 billion from $4.3 billion a year ago on higher oil prices. For the year BP reported net loss of $3.7 billion and increased the charge related to Gulf of Mexico oil spill by $1 billion to $40.9 billion.

United Parcel Services, the largest package delivery company reported fourth quarter operating profit increased 47.8% to $1.8 billion from $1.26 billion and earnings per share increased to $1.11 from 75 cents. Revenues increased 8% to $13.42 billion from $12.38.

Lexmark International Inc fourth quarter net increased 46% to $87.6 million from $59.8 million. Earnings per share increased to $1.10 a share from 76 cents a year ago. Sales rose 2.9% to $1.1 billion from $1.07 billion.

Pfizer Inc said fourth quarter net rose to $2.89 billion or 36 cents a share from $767 million or 10 cents a share. The drug maker also estimated 2011 earnings per share between $2.16 and $2.26 after adjusting for one-time items. The company also completed its tender offer to acquire King Pharmaceuticals Inc for $3.6 billion.