Greece Uncertainty Drags Global Indexes Lower; Nike Net Rises 14%

Arthi Gupta
28 Jun, 2011
New York City

U.S. indexes traded flat with Greece in focus. General Dynamics won a $286 million contract from the U.S. Army. McCormick agreed to acquire Kamis for about $291 million. Nike quarterly earnings and revenues more than expected.

[R]9:00 AM New York – U.S. indexes traded flat with Greece in focus. General Dynamics won a $286 million contract from the U.S. Army. McCormick agreed to acquire Kamis for about $291 million. Nike quarterly earnings and revenues more than expected.[/R]

World markets traded cautiously ahead of austerity vote Wednesday. Investors tiptoed back to market as Greece faces a 2-day strike as lawmakers debate austerity measures conditions.

The Greek parliament began debating a series of austerity measures yesterday including tax increases and spending cuts. Greece is schedule to pay 6 billion euros of bonds in August.

European lawmakers and regulators are voicing optimism on the vote but measures are unpopular in the deeply divided nation.

Greece will only receive additional financial assistance if it strictly implements austerity measures, European Central Bank Executive Board member Juergen Stark said in an interview with German daily Die Welt on Tuesday.

“There is only this Plan A. Greece must implement the austerity program, the parliament will vote on further saving measures over the next few days,” Stark said.

A 48-hour general strike is taking place in Athens today to protest against the austerity measures and unions are demanding that measures do not get the parliament approval.

General Dynamics Wins U.S. Army Contract

General Dynamics Armament and Technical Products, the business unit of General Dynamics was awarded a $286 million contract by the U.S. Army for the production of the Hydra-70 air-to-ground rocket.

Moody''s Downgrades Toyota

The senior unsecured long-term ratings on Toyota Motor Corp. and its supported subsidiaries have been downgraded to Aa3 from Aa2 by Moody''s Japan K.K.

The downgrade reflects Moody’s concern that it would take some time for Toyota to recover its previous strong profitability and competitive strength in view of challenging market conditions.

McCormick Acquires Kamis

McCormick & Company, Incorporated, a global leader in flavor signed an agreement to purchase 100% of the shares of Kamis S.A. for approximately 830 million Polish zloty or approximately $291 million.

Kamis is a privately held company based in Poland with distribution into Russia and other parts of Central and Eastern Europe.

Earnings Review

Nike, Inc. ((NKE)), the maker of athletic shoes and apparel said fourth quarter revenues increased 14% to $5.77 billion from $5.08 billion in the same quarter last year. Net income in the quarter rose 14% to $594 million or $1.24 per share compared to net income of $522 million or $1.06 per share for the year-ago quarter.

Standard Microsystems Corporation ((SMSC)), the designer of Smart Mixed-Signal Connectivity solutions reported first quarter revenues grew 7% to $103.5 million from $97 million a year ago. Net profit in the quarter surged 933% to $6.2 million or 26 cents per diluted share compared to net profit of $0.6 million or 3 cents per share in the prior year.

Tower Group, Inc. ((TWGP)), the provider of insurance products and services estimates operating earnings for fiscal year 2011 at the lower end of its previously announced range of $2.70 to $2.90 per share.