U.S. Indexes Turn Higher on Jobless Claims; AIG Sells Met Life Stake

Arthi Gupta
03 Mar, 2011
New York City

U.S. indexes gained after crude oil prices eased for the first time in three days. AIG raised $9.6 billion from sale of MetLife stake.

[R]9:00 AM New York – U.S. indexes gained after crude oil prices eased for the first time in three days. AIG raised $9.6 billion from sale of MetLife stake.[/R]

U.S. stocks turned higher after the release of weekly jobless data and the decline in oil prices on the reports that Libyan leader Gaddafi and Arab League President are likely to agree on a peace plan.

Seasonally adjusted weekly jobless claims decreased 20,000 to 368,000 from the revised previous week claims of 388,000. The preliminary insured unemployment rate in the week ending February 19 was 3.0% from the prior week''s revised rate of 3.1%.

Crude oil inched higher in Asian trading to rise to $102.15 a barrel but closed at the session’s low to $101.54 after Reuters reported that Muammar Gaddafi and the president of the Arab League agreed to a peace plan.

Venezuelan President Hugo Chavez also offered to create a multinational mediation commission, according to 123jump.com sources in Venezuela and Trinidad.

Economic activity continued to expand at a modest to moderate pace in January and early February, the Federal Reserve said in its Beige Book report on Wednesday, although the report also hinted at signs of rising inflation pressures.

The report said that retail sales increased in all Fed districts except Richmond and Atlanta districts.

Chinese private sector activity slowed notably in February, according to the results of a survey by Markit and HSBC. This reflected a sharp slowdown in the manufacturing sector and a lack of growth in the service sector.

The HSBC composite output index fell to 51.9 in February from 54.6 in January. The HSBC business activity index for the service sector was a seasonally adjusted 51.9 in February, down from 52 in January.

The Australian Bureau of Statistics reported a seasonally adjusted merchandise trade surplus of A$1.875 billion in January following the upwardly revised surplus of A$2.018 billion in December. The floods and cyclone restricted exports of coals and iron ores in the month.

AIG Sells MetLife Stake

American International Group, Inc. sold 146.8 million shares of MetLife common stock and $3 billion of MetLife equity units, which it received for the sale of its insurance subsidiary, American Life Insurance Co to life insurer MetLife, Inc.

AIG will use the expected gross proceeds of about $9.6 billion from the sale of Metlife securities to accelerate payments to the U.S. Department of the Treasury, which has $18.2 billion of preferred equity holding in AIG.

Family Dollar Rejected Hostile Offer

Family Dollar Stores, Inc. said its Board determined that the unsolicited, conditional proposal from Trian Group to acquire Family Dollar substantially undervalues the company and that pursuit of a sale of the company is not in the best interest of shareholders.

Further, the company noted that its Board adopted a shareholder rights plan.

Earnings Review

Big Lots, Inc. ((BIG)), the Big Lots Inc reported fourth quarter net sales increased 4.1% to $1.52 billion from $1.46 billion last year. Net income in the quarter grew 4.5% to $110.06 million or $1.46 per share compared to net income of $105.37 million or $1.27 per share a year ago.

Chiquita Brands International, Inc. ((CQB)), the producer and distributor of bananas and other produce said fourth quarter revenues fell 12% to $773 million from $879 million in the comparable quarter last year. Net loss in the quarter narrowed 26% to $20 million or 43 cents per diluted share compared to net loss of $27 million or 60 cents per share last year.

Copart, Inc. ((CPRT)), the junk car auctioneer said second quarter total service revenues and vehicle sales for the second quarter rose 17.4% to $207.38 million from $176.60 million in the same quarter last year. Net income in the quarter rose 6% to $37.9 million or 46 cents per diluted share compared to net income of $35.7 million or 42 cents per share for the year-ago quarter.

Constellation Software Inc., the enterprise software company reported fourth quarter revenues increased 30% to $171.5 million from $131.9 million last year. Net income generated in the quarter was $17.9 million or 84 cents per diluted share compared to net loss of $10,000 or breakeven per share last year.

CVR Energy, Inc. ((CVI)), the independent petroleum refiner and marketer of transportation fuels reported fourth quarter net sales climbed 25% to $1.15 billion from $921.9 million a year earlier. Net income in the quarter fell 76% to $2.3 million or 3 cents per diluted share compared to net income of $9.5 million or 11 cents per share last year.

Foot Locker, Inc. ((FL)), the specialty athletic footwear and apparel retailer said fourth quarter total sales increased 5.1% to $1.39 billion from $1.33 billion in the same quarter last year. Comparable-store sales increased 7.3% for the fourth quarter of 2010.

Net income in the quarter surged 148% to $57 million or 36 cents per share compared to net income of $23 million or 14 cents per share in the prior-year quarter, driven by significant growth in comparable-store sales and gross margin.

Annual total sales increased 4.0% to $5.05 billion from $4.85 billion in the year-ago. Comparable-store sales rose 5.8% in 2010. For fiscal year 2010, net income soared 252% to $169 million or $1.07 per share compared to $48 million or $0.30 per share in the previous year.

Greif, Inc. ((GEF)), the packaging product company reported first quarter net sales increased 33% to $943.8 million from $709.7 million last year. Net income in the quarter increased 67% to $41.4 million or $0.71 per Class A share compared to net income of $24.8 million or $0.43 per Class A share in the previous year.

H.J. Heinz Company ((HNZ)), the food company said third quarter sales climbed 1.5% to $2.72 billion versus $2.68 billion in the comparable period. Net income in the quarter improved 20% to $273.78 million or 84 cents per diluted share compared to net income of $228.53 million or 72 cents per share last year.

Kraton Performance Polymers Inc. ((KRA)), the producer of styrenic block copolymers stated fourth quarter sales revenues increased 21% to $288.17 million from $250.71 million in the same period last year. Net income generated in the quarter was $10.3 million or 32 cents per diluted share compared to a loss of $1.52 million or 7 cents per share last year.

NACCO Industries, Inc. ((NC)), the company involved in the lift truck, housewares, and mining industries reported fourth quarter revenues rose 26% to $866.2 million from $687.6 million last year. Net income in the quarter dropped 9.6% to $38.4 million or $4.59 per share compared to net income of $42.5 million or $5.12 per share a year ago.