U.S. Jobless Rate Drops to 8.9%; IMF Forecasts High Food Prices

Arthi Gupta
04 Mar, 2011
New York City

U.S. indexes gained after payrolls rose 192,000 and jobless rate fell. The IMF forecasted high food prices on rising demand. Dresser-Rand agreed to acquire Spain-based Grupo Guascor for $690 million.

[R]8:40 AM New York – U.S. indexes gained after payrolls rose 192,000 and jobless rate fell. The IMF forecasted high food prices on rising demand. Dresser-Rand agreed to acquire Spain-based Grupo Guascor for $690 million.[/R]

World markets rebounded after crude oil eased and U.S. jobless claims declined. Investors in U.S., Europe and Asia focused on domestic economic issues.

Oil prices rose to near $103 a barrel today amidst fierce fighting between the Libyan government and rebel forces. U.S. stepped up its pressure on Libya and President Barack Obama reiterated calls for Gadhafi to resign and leave the country.

Opposition groups in Libya plan to hold rallies after noon prayers on Friday to protest against the rule of Muammar Gaddafi. However, government forces have set up checkpoints in Tripoli as a precautionary measure.

Residents fear of fresh conflict between anti-government protesters and loyalist forces.

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said on Thursday that the Fed''s extremely loose monetary policy stance remains ""appropriate.""

Federal Reserve Bank of Atlanta President Dennis Lockhart said on Thursday that he was slightly more cautious with regards to the economic outlook due to unrest in North Africa and the Middle East and their impact on oil prices.

China raised its defense budget for the current year by 12.7%. Chinese parliamentary spokesman Li Zhaoxing said at a press conference on Friday that military spending in 2011 would increase 12.7% to 601.1 billion yuan or $91.5 billion from 532.1 billion yuan or $81 billion last year.

U.S. Payrolls Rise, Unemployment Falls

The Labor Department released a report today showing that U.S. employment increased by more than expected in the month of February. The report also showed an unexpected drop in the unemployment rate.

The Labor Department said payroll employment rose by 192,000 jobs in February following an upwardly revised increase of 63,000 jobs in January.

Additionally, the report showed that the unemployment rate slipped to 8.9% in February from 9.0% in January.

IMF Forecasts High Food Prices

World food prices are likely to persist, as it will take years for supply growth to respond to growing global demand, the International Monetary Fund said.

The IMF said in its quarterly Finance & Development magazine that the world may face increasing scarcity for land, water and energy.

A large part of the recent spike is related to temporary factors, such as weather. But the main reasons for rising demand for food reflect structural changes in the global economy that will not be reversed, according to the analysis.

Dresser-Rand Acquires Grupo Guascor S.L.

Dresser-Rand Group Inc., a global supplier of high-speed rotating equipment and service solutions, agreed to acquire Spanish diesel engine supplier Grupo Guascor S.L. for an enterprise value of €500 million or $690 million in cash and stock. The enterprise value includes the assumption of approximately €125 million or $172 million in net debt.

Texas-based Dresser-Rand will pay the sellers about $283 million in cash and issue about 5 million Dresser-Rand common shares.

Fortegra Buys eReinsure.com

Fortegra Financial Corp. agreed to acquire eReinsure.com Inc. for a cash purchase price of $37 million. The acquisition of eReinsure will enable Fortegra to offer eReinsure''s unique reinsurance negotiation platform to insurers, reinsurers and brokers.

USA Mobility Purchases Amcom Software

USA Mobility Inc. acquired Amcom Software Inc. from Norwest Equity Partners for $163.3 million in cash, creating a company in the forefront of mission critical unified communications.

The acquisition was funded by $110.8 million of cash on hand and $52.5 million through a credit facility provided by Wells Fargo Capital Finance, LLC.

Bally Technologies Agrees to Buy Sightline Payments

Bally Technologies, Inc., a slots and video machines maker for the global gaming industry entered into an agreement to acquire Las Vegas-based Sightline Payments, a provider of innovative payment solutions.

Earnings Review

Marvell Technology Group Ltd. ((MRVL)), the chipmaker said fourth quarter net revenue rose 7% to $900.51 million from $842.54 million in the same quarter last year. Net income in the quarter rose 9% to $222.9 million or 33 cents per diluted share compared to $204.8 million or 31 cents per share for the year-ago quarter.

Novell, Inc. ((NOVL)), the enterprise software developer reported first quarter total net revenue declined 5.8% to $190.71 million from $202.36 million a year ago. Net loss for the quarter was $17.94 million or 5 cents per diluted share compared to an income of $20.19 million or 6 cents per share in the previous year.

Select Medical Holdings Corporation ((SEM)), the operator of specialty hospitals reported fourth quarter net operating revenues increased 11.1% to $637.4 million from $573.5 million a year ago. Net income in the quarter declined 30.1% to $20.9 million or 13 cents per diluted share compared to net income of $29.9 million or 19 cents per share a year earlier.

Spreadtrum Communications, Inc. ((SPRD)), the fabless semiconductor company reported fourth quarter total revenue soared 199% to $126.5 million from $42.3 million last year. Net income in the quarter surged 2043% to $30.0 million or $0.56 per ADS compared to net income of $1.4 million or $0.03 per ADS for the year-ago quarter.

The Cooper Companies, Inc. ((COO)), a contact lens maker said first quarter revenue increased 13% to $293.2 million from $260.26 million a year earlier. Net income in the quarter surged 122% to $45.3 million or 96 cents per diluted share compared to net income of $20.4 million or 44 cents per share last year, as demand for its toric and single-sphere lens grew across all of the regions.

Wal-Mart Stores, Inc. ((WMT)), the retailer said its board approved to increase the company''s annual dividend by 21%. Accordingly, the company will pay an annual dividend of $1.46 per share, up from the $1.21 per share paid during fiscal year 2011.