U.S. Import Prices Rise 0.2%; Indexes Down

Arthi Gupta
10 Jun, 2011
New York City

The U.S. indexes traded lower after disappointing global economic data. U.S. import prices rose 0.2% in May. Avaya filed for IPO of $1 billion. Private equity firms KKR and TPG withdrew bid for Nokia Siemens. Qualcomm agreed to acquire the assets of Rapid Bridge.

[R]10:10 AM New York – The U.S. indexes traded lower after disappointing global economic data. U.S. import prices rose 0.2% in May. Avaya filed for IPO of $1 billion. Private equity firms KKR and TPG withdrew bid for Nokia Siemens. Qualcomm agreed to acquire the assets of Rapid Bridge.[/R]

U.S. indexes traded lower after import prices rose 0.2% in May.

Asian markets traded mixed after China''s trade surplus rose at a slower than anticipated rate in May. The country recorded a surplus of $13.05 billion in May from $11.4 billion in April, as export growth slackened. Exports grew 19.4% annually in May to $157.16 billion.

The Bank of Korea today announced a 25 basis point increase in interest rates to 3%, as inflation remains above the central bank''s target.

European indexes traded slightly lower after a batch of mixed economic data from France, Germany and Italy.

The Bundesbank upgraded Germany''s 2011 growth estimate and forecasted the Gross Domestic Product to grow 3.1% this year after expanding 3.5% in 2010. The 2011 estimate was upwardly revised from the previous estimate of 2.5%.

U.S. Import Prices Rise

U.S. import prices continued to rise for the eighth consecutive month in May, according to data released by the U.S. Department of Labor today.

The import price index increased 0.2% in May following a 2.1% increase in April and fuel prices fell 0.2%, the first monthly decline since a 1.5% drop in September 2010.

The report also showed that export prices rose 0.2% in May after climbing 0.9% in April. Prices for agricultural exports fell 2.0% after rising in each of the nine previous months.

Avaya Plans IPO

Avaya Holdings Corp., the telecommunications equipment maker said in a regulatory filing on Thursday of a proposed initial public offering of $1 billion of its common stock.

However, the company did not disclose how many of its 487.39 million shares it intends to sell and also did not give an expected price range.

Avaya expects to use the net proceeds it receives from the offering to, among other things, pay down certain long-term indebtedness.

KKR and TPG Withdraw Bid for Nokia Siemens

Kohlberg Kravis Roberts & Co L.P. and TPG Capital have pulled out from a deal to acquire a majority stake in Nokia Siemens Networks B.V, a 50-50 joint venture between Finnish mobile phone maker Nokia Corp. and German telecom company Siemens AG, The Financial Times reported on Thursday.

Anglo Irish Bank Inches Closer to Selling U.S. Portfolio

Anglo Irish Bank Corp. is nearing a deal to sell its U.S. commercial real-estate loans totaling $10 billion as soon as this month, the Wall Street Journal said today citing people familiar with the matter.

Anglo Irish''s portfolio consists of Mandarin Oriental hotel in Boston and loans on Apthorp condominium conversion project in New York and Palmer House Hilton in Chicago, as per the Journal.

Qualcomm Acquires Assets of Rapid Bridge

Qualcomm Incorporated agreed to acquire substantially all of the assets of Rapid Bridge LLC, a San Diego-based inventor of advanced techniques for the design and development of semiconductor products.

The company’s technology reduces complexity in integrated circuit (IC) development at advanced technology nodes to enable greater design flexibility and optimized die size and power consumption.

Earnings Review

Air Products & Chemicals, Inc. ((APD)), the maker of gases and chemicals for industrial uses stated that the company expects to deliver 11% to 13% top line growth each year for the next four years and targets to generate total revenues of more than $15 billion in 2015.

Brown-Forman Corporation ((BF.B)), the alcoholic beverage maker reported fourth quarter net sales increased 8% to $791.3 million from $733 million in the comparable period. Net income in the quarter surged 128% to $165.4 million or $1.13 per share compared to net income of $72.7 million or 49 cents per share last year.

lululemon athletica inc. ((LULU)), the designer and retailer of technical athletic apparel said first quarter net revenue grew 35% to $186.78 million from last year''s $138.3 million. Comparable stores sales for the first quarter increased 16% on a constant dollar basis.

Net income in the quarter surged 70.3% to $33.37 million or 46 cents per share compared to net income of $19.59 million or 27 cents per share last year.

National Semiconductor Corporation ((NSM)), the chipmaker said fourth quarter net sales fell 6% to $371.4 million from $398.5 million in the same quarter last year. Net income in the quarter declined 15% to $67.1 million or 26 cents per diluted share compared to net income of $79.2 million or 33 cents per share for the year-ago quarter.

Toyota Motor Corporation ((TM)), the carmaker estimates fiscal year 2012 net revenues to decline 2% to 18.6 trillion yen and net income to drop 31% to 280 billion yen. Operating income is anticipated to fall 35% to 300 billion yen.