Retail Sales Rise 0.4%; Silgan Buys Graham Packaging, JP Morgan Net Soars

Arthi Gupta
13 Apr, 2011
New York City

U.S. indexes gained after retail sales rose and mortgage activity declined. Silgan agreed to buy Graham Packaging for $4.1 billion. JPMorgan net surged on a strong performance by its investment banking unit and a drop in losses in its credit card portfolio.

[R]9:45 AM New York – U.S. indexes gained after retail sales rose and mortgage activity declined. Silgan agreed to buy Graham Packaging for $4.1 billion. JPMorgan net surged on a strong performance by its investment banking unit and a drop in losses in its credit card portfolio.[/R]

Asian markets gained on optimism of global economic recovery and European indexes advanced after industrial production accelerated in February.

The Japanese government downgraded its assessment of the economy for the first time in six months, citing stagnant production, weak outlook for exports and harsh labor market conditions, resulting from last month''s devastating earthquake.

The International Monetary Fund projected India''s fiscal year 2011 economic growth rate forecast at 8.2%, lower than its earlier estimate of 8.4%. The international agency also downgraded the economic outlook for Japan and U.S.

U.S. Retail Sales Rise

Retail sales in the U.S. rose for the ninth consecutive month to 0.4% in March following an upwardly revised 1.1% increase in February, according to a report released by the Commerce Department today.

Retail sales rose 0.8% in March compared to an upwardly revised 1.1% increase in February, excluding a 1.7% drop in auto sales.

U.S. Mortgage Activity Plummets

U.S. mortgage applications decreased 6.7% from one week earlier, according to the Mortgage Bankers Association''s Weekly Mortgage Applications Survey for the week ending April 8, 2011. This was the third week in a row that applications fell.

The MBA''s gauge of refinancing decreased 7.7% last week to its lowest level since February 11, while seasonally adjusted Purchase Index decreased 4.7%.

The average contract interest rate for 30-year fixed-rate mortgages increased for the fourth consecutive week to 4.98% from 4.93%.

Silgan Buys Graham Packaging

Silgan Holdings Inc., the consumer goods packaging products maker entered into a merger agreement to buy Graham Packaging Co Inc. in a cash-and-stock transaction valued at $19.56 per share or a total of about $4.1 billion, including assumed indebtedness.

ProLogis Retains Stake in ProLogis European Properties

ProLogis, the warehouse center owner rejected a bid for ProLogis European Properties FCP from Australian property investor Goodman Group and Dutch pension-fund asset manager APG Algemene Pensioen Groep NV. ProLogis said it intends to retain its 33.1% ownership stake in PEPR.

Toyota Suspends Production at Five European Plants

Toyota Motor Corp. decided to halt production for several days in late April and early May at five European plants due to parts supply difficulties following the March 11 Great East Japan Earthquake.

The sites affected are the vehicle-producing plant in the UK, Turkey and France, and the engine-making plants in the UK and Poland.

eBay Acquires Majority Stake in GittiGidiyor

eBay Inc. agreed to acquire additional shares in GittiGidiyor, an online auction site in Turkey. Upon closing of the transaction, eBay will own about 93% of the outstanding shares of GittiGidiyor. Terms of the deal were not disclosed.

Schneider Denies Bid for Tyco

Schneider Electric S.A., the French energy management company denied media reports that it made takeover overtures to Tyco International Ltd. The company also said it is not in discussion with Tyco.

Earlier, a Wall Street Journal report speculated that Schneider made a preliminary bid of about $30 billion for Tyco.

Earnings Review

Adtran, Inc. ((ADTN)), the networking and communications equipment provider reported first quarter total sales surged 30% to $165.52 million from $127.03 million in the same period last year. Net income in the quarter surged 88% to $34.26 million or 52 cents per diluted share compared to net income of $18.19 million or 29 cents per share in the year-ago quarter.

JPMorgan Chase & Co. ((JPM)), the financial services provider reported first quarter total net revenue, on a reported basis, dropped 9% to $25.22 billion from prior year''s $27.67 billion. Net income in the quarter surged 67% to $5.56 billion or $1.28 per diluted share compared to net income of $3.33 billion or 74 cents per share a year ago.

Healthcare Services Group, Inc. ((HCSG)), the provider of housekeeping and laundry services to nursing homes said first quarter revenues increased 13% to $208.4 million from $183.8 million last year. Net income in the quarter grew 4.4% to $7.76 million or 12 cents per diluted share compared to net income of $7.43 million or 11 cents per share a year earlier.

Riverbed Technology, Inc. ((RVBD)), the designer and manufacturer of WAN optimization and network traffic measurement products said its first quarter earnings are expected in the range of $0.07 and $0.08 per share.