U.S. Private Sector Adds Jobs, Mortgage Lending Falls

Arthi Gupta
30 Mar, 2011
New York City

U.S. indexes gained after the private sector added 201,000 jobs in March and U.S. mortgage and refinancing activity fell. Canada-based Valeant proposed to acquire Cephalon for $5.7 billion. Salesforce.com agreed to buy Radian6 for $326 million.

[R]9:45 AM New York – U.S. indexes gained after the private sector added 201,000 jobs in March and U.S. mortgage and refinancing activity fell. Canada-based Valeant proposed to acquire Cephalon for $5.7 billion. Salesforce.com agreed to buy Radian6 for $326 million.[/R]

U.S. stocks opened higher after a better than expected private sector employment report showed an increase. Crude oil eased in the international trading and markets in Europe and Asia gained.

The euro traded at $1.40 and crude oil declined 39 cents to $104.40 a barrel.

U.S. Private Sector Employment Grows

Private sector employment in the U.S. showed another significant increase in the month of March, according to a report released by payroll processor Automatic Data Processing on Wednesday, with the report showing particularly strong job growth in the service sector.

Private sector employment rose 201,000 in March following a downwardly revised increase of 208,000 jobs in February. Small companies added 102,000 jobs and medium-sized companies added 82,000 and large companies added 17,000.

In a separate report, employers in the United States planned fewer job cuts in March, but reduction in government payrolls rose to its highest level in twelve months, data released by outplacement consultancy Challenger, Gray & Christmas showed today.

Planned payroll reduction dropped 18% on a monthly basis to 41,528 jobs in March. Job cuts were down 39% from last year, when 67,611 positions were axed.

U.S. Mortgage, Refinancing Activity Fall

U.S. mortgage applications decreased 7.5% from one week earlier, according to data from the Mortgage Bankers Association''s Weekly Mortgage Applications Survey for the week ending March 25, 2011.

Refinancing decreased 10.1% from the previous week, and applications for purchases decreased 1.7% from one week earlier.

Valeant Proposes to Acquire Cephalon

Valeant Pharmaceuticals International, Inc., the Canadian drugmaker announced a proposal to buy U.S.-based drugmaker Cephalon, Inc. for $73 per share in cash.

The offer valued at approximately $5.7 billion, represents a premium of approximately 29% over Cephalon''s 30-day trading average.

Tullow Sells Oil Interest in Uganda for $2.9 Billion

Tullow Oil plc signed Sale and Purchase Agreements with CNOOC and Total in respect of the sale of a one-third interest to each party of the interests Tullow holds in Exploration Areas 1, 2 and 3A in Uganda. Tullow will retain a one-third interest.

The terms of the transactions include a total cash consideration payable to Tullow of $2.9 billion.

International Paper Purchases Stake in Indian Paper Mill

International Paper entered into agreements with Mr. L.N. Bangur, and related family members and affiliates to purchase approximately 53.5% of the outstanding shares of Andhra Pradesh Paper Mills Limited for approximately $257 million in cash.

In addition, International Paper agreed to a $62 million non-compete payment to the sellers.

Time Warner Prices $2 Billion Debt Offering

Time Warner Inc. priced a $2 billion debt offering in two parts. The company said it priced a $1 billion underwritten public offering of 4.75% ten-year senior notes due 2021 at a price equal to 98.943% of their face amount, and a $1 billion underwritten public offering of 6.25% 30-year debentures due 2041 at a price equal to 98.707% of their face amount.

The net proceeds from the issuance of the notes and debentures will be used for general corporate purposes.

NY Attorney General Probes AT&T Deal

Eric Schneiderman, the New York Attorney General said on Tuesday that his office will undertake a thorough review of AT&T, Inc.''s proposed acquisition of T-Mobile USA for potential anti-competitive effects, including possible increases in mobile broadband costs for New York residents and businesses.

On March 20, AT&T agreed to buy T-Mobile USA from Germany''s Deutsche Telekom AG in a deal that will give Deutsche Telekom an 8% ownership interest in the AT&T.

Salesforce.com Buys Radian6

Salesforce.com said it entered into an agreement to acquire social media monitoring platform Radian6 for about $276 million in cash and $50 million in stock, net of cash acquired.

Salesforce.com said the acquisition will accelerate its growth and will extend the value of all of its offerings.

Earnings Review

Family Dollar Stores, Inc. ((FDO)), the retail discount stores operator reported second quarter sales increased 8.3% to $2.26 billion from $2.09 billion in the previous year on comparable-store sales rise of 5.1%.

Net income in the quarter grew 9.8% to $123.18 million or 98 cents per diluted share compared to net income of $112.2 million or 81 cents per share last year.

Tibco Software Inc. ((TIBX)), the independent provider of middleware and infrastructure software said first quarter total revenues increased 20% to $185.3 million from $155.0 million last year.

Net income in the quarter rose 54% to $16.0 million or 9 cents per diluted share compared to net income of $10.4 million or 6 cents per share last year.

VimpelCom Ltd. ((VIP)), the mobile phone operator reported fourth quarter net operating revenues increased 22% to $2.82 billion from $2.31 billion a year ago.

Net income in the quarter surged 62.7% to $461.2 million or $0.34 per basic ADS from $283.4 million or $0.27 per basic ADS last year.