U.S. Jobless Claims Drop; Energy Transfer to Buy Southern Union

Arthi Gupta
16 Jun, 2011
New York City

U.S. indexes declined after weekly jobless claims fell 16,000 and housing starts rose 3.5% in May. Energy Transfer agreed to buy Southern Union for $7.9 billion. Ford planned addition investment of $500 million to increase engine production in China.

[R]9:40 AM New York – U.S. indexes declined after weekly jobless claims fell 16,000 and housing starts rose 3.5% in May. Energy Transfer agreed to buy Southern Union for $7.9 billion. Ford planned addition investment of $500 million to increase engine production in China.[/R]

Global indexes slid on euro debt concerns and political strife in Greece. The Asian markets traded lower with most indexes in the region declining more than 1.3%.

Greece descended into chaos as prime minister offered to resign to unite the nation and students and labor unions rioted on the streets of Athens. Prime Minister George Papandreou in a televised address last night to the nation said he will form a new government and call a vote of confidence in parliament.

The Reserve Bank of India lifted its key policy rates by 25 basis points to combat rising inflation. The repo was raised to 7.5% and the reverse repo was lifted to 6.5% from 6.25%.

U.S. Weekly Jobless Claims Fall

New claims for unemployment insurance by U.S. workers dropped more than estimated in the week ending June 11, according to data released by the U.S. Department of Labor.

Seasonally adjusted weekly jobless claims decreased 16,000 to 414,000 from the revised previous week revised claims of 430,000. The preliminary insured unemployment rate in the week ending June 4 was 2.9% unchanged from the prior week''s unrevised rate of 2.9%.

U.S. Housing Starts Rise

New residential construction in the U.S. showed a modest increase in the month of May, according to a report released by the U.S. Commerce Department today.

The report showed that housing starts rose 3.5% to an annual rate of 560,000 in May from the revised April estimate of 541,000. Building permits rose 8.7% to an annual rate of 612,000 in May from the revised April rate of 563,000.

U.S. Foreclosures Fall

RealtyTrac said that foreclosure filings, which include default notices, scheduled auctions and bank repossessions, were reported on 214,927 properties in May, down 2% from April and down 33% from May 2010.

Energy Transfer Buys Southern Union

Energy Transfer Equity, L.P. reached a merger agreement to acquire Southern Union Co. for $7.9 billion. The transaction price includes about $3.7 billion of existing Southern Union debt.

The merger is expected to make Energy Transfer one of the largest natural gas infrastructure players in the U.S.

HP Sues Oracle

Hewlett-Packard Co. sued Oracle Corp. over the enterprise software giant''s decision that it would no longer develop software that runs on Intel Corp.''s Itanium microprocessors and accused Oracle of engaging in unfair competition by trying to force HP''s Itanium customers to shift to hardware supplied by Oracle.

Ford Increases Investment in Chinese Venture

Ford Motor Co. announced an investment of $500 million in its passenger car joint venture in China, Changan Ford Mazda Automobile, for a new engine plant.

The company said the new investment will more than double the joint venture''s annual engine production capacity in China to 750,000 units when it comes online in 2013.

Capital One Bids for HSBC''s U.S. Credit Card Portfolio

Capital One Financial Corp., the credit services firm made an early bid for HSBC Holding Plc''s U.S. credit card portfolio, the Wall Street Journal reported Wednesday, citing people familiar with the matter.

Discover Financial Announces Share Repurchase Program

Discover Financial Services announced that its board of directors approved a share repurchase program, authorizing the company to purchase up to $1 billion of its common stock.

F.N.B. Acquires Parkvale Financial

F.N.B. Corp signed an agreement to acquire Parkvale Financial Corp. in an all stock deal valued at about $22.48 per share, or $130 million. The acquisition will enable F.N.B to expand its operations in the sprawling Pittsburgh metropolitan area.

Earnings Review

John Wiley & Sons Inc. ((JWA)), the global publisher of print and electronic products said fourth quarter revenues increased 2.1% to $444.9 million from $435.6 million a year ago. Net income in the quarter edged higher 2.1% to $28.6 million or 46 cents per diluted share compared to net income of $28.0 million or 46 cents per share last year.

Kirby Corporation ((KEX)), the marine transportation services provider forecasts second quarter earnings in a range of $0.72 to $0.77 per share impacted by the Mississippi River''s high water and flooding conditions. Earlier, the company had forecast earnings in a range of $0.67 to $0.77 per share.

Pier 1 Imports, Inc. ((PIR)), the home furnishings retailer reported first quarter net sales grew 9.3% to $334.60 million from a year ago quarter sales of $306.26 million. Net income in the quarter soared 84% to $14.1 million or 12 cents per diluted share compared to net income of $7.67 million or 7 cents per share last year.

Smithfield Foods, Inc. ((SFD)), the packaged pork and meat products maker reported fourth quarter sales increased 7% to $3.12 billion from $2.91 billion in the same quarter last year. Net income in the quarter was $98.4 million or 59 cents per diluted share compared to a net loss of $4.6 million or 3 cents per share reported in the previous year.