U.S. Mortgage, Refinancing Activity Drop; Adobe, FedEx Net Soar

Arthi Gupta
22 Jun, 2011
New York City

U.S. indexes slid ahead of the FOMC decision on the stimulus program. U.S. mortgage and refinancing activity fell. Dentsply agreed to acquire Astra Tech from AstraZeneca for about $1.8 billion. Adobe net surged 54% on strong sales but guidance disappointed.

[R]10:50 AM New York – U.S. indexes slid ahead of the FOMC decision on the stimulus program. U.S. mortgage and refinancing activity fell. Dentsply agreed to acquire Astra Tech from AstraZeneca for about $1.8 billion. Adobe net surged 54% on strong sales but guidance disappointed.[/R]

U.S. indexes declined ahead of Federal Reserve Chairman Ben Bernanke’s press conference later today. The sentiment was positive at the opening after Greek government won a confidence vote in parliament and met the first condition to get the last tranche of first bailout.

Investors focused on the outcome of the Fed rate setting meeting ending today. After the 2-day meeting the Fed is expected leave its target rate range between zero and 0.25% and confirm the end of its $600 billion bond buying program at the end of June.

Asian stocks traded higher after the Greek government won a vote of confidence.

Greece''s Prime Minister George Papandreou survived a closely watched confidence vote in parliament yesterday with more than half the members in the 300-strong parliament voting in his favor.

The 155-143 vote in favor of government is the first of three steps necessary to win the last tranche of European Union bailout.

The unions, students and government employees conducted violent protests on the streets as the lawmakers debated late last night. The government is set to seek approval on Tuesday to pass €78 billion of budget cuts.

The European Union is firm that the austerity measures have to be passed through if Greece is to receive the €12 billion loan necessary to avoid default.

U.S. Mortgage Activity Falls

The U.S. Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, dropped 5.9% in the week ended June 17.

Fixed 30-year mortgage rates averaged 4.57% in the week, up from 4.51% the week before.

The seasonally adjusted index of refinancing applications dropped 7.2% and the measure of loan requests for home purchases slipped 2.8%.

Dentsply Acquires Astra Tech

Dentsply International Inc., a dental products maker signed an agreement to acquire Astra Tech, a provider of dental implant products, based in Mölndal, Sweden, from AstraZeneca for approximately $1.8 billion in cash.

Dentsply said the deal would create a strong global competitor with a number three market position.

J.P. Morgan Securities Reaches Settlement with SEC

JPMorgan Chase & Co. announced that one of its U.S. broker-dealer affiliates, J.P. Morgan Securities LLC agreed to pay $153.6 million to settle with the U.S. Securities and Exchange Commission regarding certain collateralized debt obligations the firm sold over four years ago.

Earnings Review

Adobe Systems Incorporated ((ADBE)), the publishing and design software maker said second quarter revenue rose 9% to $1.02 billion from $943.04 million in the same quarter last year. Net income for the quarter increased 54.4% to $229.4 million or 45 cents a diluted share compared to net income of $148.6 million or 28 cents per share for the year-ago quarter.

CarMax, Inc. ((KMX)), the used vehicles retailer said first quarter net sales rose 18% to $2.68 billion from $2.26 billion in the previous year. Net earnings in the quarter increased 25% to $126.3 million or 55 cents per diluted share compared with net earnings of $101.1 million or 44 cents per share a year ago.

FedEx Corporation ((FDX)), the logistics services company reported fourth quarter revenue climbed 12% to $10.55 billion, from $9.43 billion in the previous year. Net income in the quarter edged higher 33.2% to $558 million or $1.75 per share compared to net income of $419 million or $1.33 per share last year.

Jabil Circuit, Inc. ((JBL)), the provider of worldwide electronic manufacturing services and solutions said third quarter net revenue increased 22.3% to $4.2 billion from $3.5 billion in the same quarter last year. Net income in the quarter soared 101% to $104.7 million or 47 cents per diluted share compared to net income of $52 million or 24 cents per share in the prior-year quarter.