U.S. Housing Starts Rise 7.2%; J&J Net Falls 23%, Goldman Net Drops 72%

Arthi Gupta
19 Apr, 2011
New York City

U.S. indexes traded higher after housing starts rose 7.2% in March. Seagate Technology entered into supply and cross-licensing agreement with Samsung Electronics. Goldman Sachs earnings plummeted 72% reflecting the redemption of its preferred stock and a drop in institutional revenues.

[R]10:00 AM New York – U.S. indexes traded higher after housing starts rose 7.2% in March. Seagate Technology entered into supply and cross-licensing agreement with Samsung Electronics. Goldman Sachs earnings plummeted 72% reflecting the redemption of its preferred stock and a drop in institutional revenues.[/R]

European markets gained a day after Greece debt restructuring debt worries put investors on the defensive. Investors remain cautious ahead of earnings this week and elevated energy and commodities prices.

Asian stocks fell after a late rating agency warning for the U.S. debt surprised markets.

U.S. Housing Starts Rise

Housing starts in the U.S. showed a substantial rebound in the month of March, according to a report released by the Commerce Department on Tuesday, with the report also showing a significant increase in building permits, an indicator of future housing demand.

The report said housing starts rose 7.2% to an annual rate of 549,000 in March after falling 18.5% to a revised 512,000 in February.

Additionally, the Commerce Department said that building permits increased 11.2% to an annual rate of 594,000 in March from a revised 534,000 in February.

However, both housing starts and new permits declined significantly from last year, with the housing starts dropping to 13.4% below March 2010 levels, and permits down 13.3%.

Seagate and Samsung in Broad Strategic Alignment

Seagate Technology plc and Samsung Electronics Co., Ltd said that they entered into an agreement under which Seagate and Samsung will significantly expand and strengthen their strategic relationship by further aligning their respective ownership, investments and key technologies.

The combined value of these transactions and agreements is about $1.375 billion, which will be paid by Seagate to Samsung in the form of 50% stock and 50% cash.

Nasdaq and ICE Firm with NYSE Euronext Deal

Nasdaq OMX Group Inc. and IntercontinentalExchange or ICE announced that they have taken a series of steps demonstrating their commitment to pursuing their superior proposal with NYSE Euronext.

NASDAQ OMX added that a proposed merger deal was submitted to the NYSE Euronext Board that is consistent with the terms of the current business combination deal with Deutsche Boerse.

Earnings Review

Goldman Sachs Group, Inc. ((GS)), the investment banking services provider said first quarter net revenues, including net interest income fell 6.9% to $11.89 billion versus $12.775 billion in the comparable period.

Net earnings plummeted 72% to $908 million or $1.56 per share compared with $3.3 billion, or $5.59 per share, in the same quarter a year ago.

Harley-Davidson, Inc. ((HOG)) reported first quarter motorcycles and related products revenue grew 1.9% to $1.06 billion from $1.04 billion last year, Net income for the quarter surged 258% to $119.3 million, or 51 cents per diluted share compared to net income of $33.3 million, or 29 cents a share a year ago.

Johnson & Johnson ((JNJ)), the pharmaceutical, medical devices and consumer packaged goods manufacturer said first quarter worldwide sales rose 3.5% to $16.17 billion from $15.63 billion in the first quarter of 2010. Net earnings in the quarter declined 23.2% to $3.48 billion or $1.25 per share compared to net earnings of $4.53 billion or $1.62 per share last year.

First quarter 2011 net earnings included after-tax charges of $271 million representing expenses due to litigation and additional DePuy ASR Hip recall costs, the company said.

Sony Ericsson Mobile Communications AB, a joint venture between Sony Corp. ((SNE, SON.L)) and LM Ericsson Telephone Co. ((ERIC)), reported first quarter sales decreased 19% to €1.145 billion from €1.405 billion in the comparable period a year ago.

Net income for the first quarter declined 48% to €11 million from €21 million last year.

The Bank of New York Mellon Corporation ((BK)), the global financial services company reported first quarter total fee and other revenue for the quarter grew 12.3% to $2.84 billion from $2.53 billion in the same quarter last year. Net income in the quarter increased 11.8% to $625 million or 50 cents per diluted share compared to net income of $559 million or 46 cents per share in the previous year.