U.S. Indexes Lower After Seven Days of Gains, Bernanke Faces Lawmakers

Bikram Pandey
09 Feb, 2011
New York City

U.S. stock are heading lower in the early trading after the Dow rallied for the seven sessions in a row. London Stock Exchange Group agreed to merge with Canada based TMX Group. Fed Chairman Bernanke said unemployment is likely to remain high for some time.

[R]12:55 PM New York – U.S. stocks are heading lower in the early trading after the Dow rallied for the seven sessions in a row. London Stock Exchange Group agreed to merge with Canada based TMX Group. McAfee quarterly net rose 11% ad Coca-Cola net tripled in the last quarter.[/R]

U.S. stocks trade sideways in early trading after Asian markets declined and European indexes edged lower. Commodities were on the defensive as well after copper declined from record high as China increased rate.

Fed Chairman Bernanke faces lawmakers in the House for the first time after the November election said economy appears to have “strengthened” but unemployment rate remains “high.”

Bernanke said it will take some time before unemployment will decline He also added that at the current rate of 3.2% economic growth it may take as long as 10 years for the unemployment rate to decline to 5% to 6%.

Bernanke also urged lawmakers to develop a priority map to repay debt and curtail future debts because market imposed debt limits are generally “painful response to a looming or actual financial crisis.”

London Stock Exchange Group Plc soared more than 9% after it agreed to acquire Toronto based TMX Group in all-share transaction that valued the bourse at C$3.2 billion.

LSE and other exchanges in North America have been losing business to other private trading pools and non-exchange trading platforms.

Trading in stocks on London exchange has been on a steady decline and accelerated in the last two years. LSE said in the last quarter its share of equity trading declined to 63.8% from 75% only two years ago and The Toronto Stock Exchange share declined to 64% in December from 95% according to regulatory filing.

LSE shareholders will control 55% of newly merged group and TNX shareholders will control 45%.

In a Regulatory News Service filing the exchange said TMX shareholders will receive 2.9963 LSE shares for each share held in TMX Group valuing the Canada based exchange at C42.68 a share.

U.S. Earnings Review

Coca-Cola Co ((CKE)) said fourth quarter net increased to $5.77 billion or $2.46 a share from $1.54 billion or 66 cents a share. Sales rose 40% to $10.5 billion. Global sales volume increased 6% driven by 2% rise in Europe and 5% increase in Latin America and 14% surge in Eurasia and Africa.

Cerner Corporation ((CERN)), the healthcare information technology provider reported fourth quarter total revenue increased to $500.2 million from $466.3 million a prior year. Net earnings in the quarter rose to $70.6 million or 82 cents per diluted share compared to $60.5 million or 71 cents per share a year ago.

Illumina, Inc. - ((ILMN)), the integrated system maker said fourth quarter revenue increased 45% to $261.3 million from $180.6 million a prior year. Net income in the quarter increased to $38.4 million or 25 cents per diluted share compared to $11.7 million or 9 cents per share a year ago.

McAfee, Inc. ((MFE)), the security technology company reported fourth quarter revenue increased to $549.56 million from $525.67 million a prior year. Net income in the quarter increased to $60.6 million or 38 cents per diluted share compared to $54.5 million or 34 cents per share a year ago.

The Walt Disney Company ((DIS)), the entertainment and media conglomerate reported first quarter revenue increased 10% to $10.71 billion from $9.74 billion a prior year. Net income in the quarter surged 54% to $1,302 million or 68 cents per diluted share compared to $844 million or 44 cents per share a year ago.

XL Group plc ((XL)), the insurance company said fourth quarter revenue increased to $1.59 billion from $1.45 billion a prior year. Net income in the quarter was $188.12 million or 74 cents per diluted share compared to net loss of $40.32 million or 63 cents per share a year ago.

European Earnings Review

Sanofi declined as much as 2% to 50.20 euros after the French drugmaker estimated profit decline between 5% and 10% this year. Earnings at the continuing businesses prior to acquisition of Genzyme were 1.84 billion euros.

Statoil ASA declined 2.7% 138.50 kroner after Norway’s largest oil company reported fourth quarter net increased to 9.53 billion kroner from 7.16 billion kroner. Earnings per share increased to 2.99 kroner from 2.25 kroner.

Syngental AG gained more than 3% to Sfr 315.20 after the largest agro-chemical maker said it will buy back shares or declare dividend to return to shareholders $850 million.