U.S. Indexes in 4-day Rally on Lower Jobless Claims

Arthi Gupta
30 Jun, 2011
New York City

U.S. indexes traded higher after weekly jobless claims fell 1,000 and pending home sales increased in May. News Corp sold Myspace for $35 million to Specific Media. CA Inc agreed to acquire Interactive TKO for $330 million.

[R]10:05 AM New York – U.S. indexes traded higher after weekly jobless claims fell 1,000 and pending home sales increased in May. News Corp sold MySpace for $35 million to Specific Media. CA agreed to acquire Interactive TKO for $330 million.[/R]

U.S. indexes gained for the fourth day in a row after weekly jobless claims fell 1,000 and Chicago PMI in June increased to 61.1% from 56.6% in May.

Global indexes continued to rise after the Greek parliament voted in favor of austerity measures. The Greek parliament approved in a second vote the privatization plan today. The second vote completed the conditions laid out by the international lenders to release additional funds.

The approvals were widely anticipated and closely watched by investors around the world as the fate of the euro hang in balance. Despite the passage of Greek austerity measures, Greece will need a second bailout and may need restructuring of its large national debt.

U.S. Weekly Jobless Claims Fall

Seasonally adjusted weekly jobless claims decreased 1,000 to 428,000 from the revised previous week claims of 429,000. The preliminary insured unemployment rate in the week ending June 18 was 2.9% from the prior week''s revised rate of 3%.

U.S. Pending Home Sales Up

The National Association of Realtors said its pending home sales index rose 8.2% in May following a revised 11.3% drop in April. The rebound by the index reflects the strongest monthly increase since last November, when the index jumped 10.6%.

News Corp Sells MySpace

News Corporation, the media conglomerate sold its social network site MySpace to online advertising network operator Specific Media for $35 million. News Corp. will retain less than 5% stake.

News Corp had earlier expected as much as $100 million for the site and agreed to a larger payment in the company stock than in cash. MySpace has been battered by the lack of clear strategy and management turnover in the last two years after the takeover by News Corp controlled by Rupert Murdoch.

Murdoch paid $580 million in 2005 for the then social network site leader. However, after the acquisition of the site, MySpace languished after Murdoch shifted his focus to the purchase of Dow Jones and set revenues goals for the site that led to the strategic failure in the fast changing social networking business.

Oracle Buys Pillar Data Systems

Oracle Corp., the world''s largest software maker agreed to acquire privately-held storage systems provider Pillar Data Systems, that is majority owned by Oracle chief executive Larry Ellison. Financial terms of the deal were not disclosed.

CA Acquires Interactive TKO

CA Technologies announced an agreement to acquire privately-held Interactive TKO, Inc., a leading provider of service simulation solutions for developing applications in composite and cloud environments for $330 million in cash.

Astellas Sells Patent Estate and Royalty of Diabetes Inhibitors

Astellas Pharma Inc., the Japanese pharmaceutical company said its unit Prosidion sold the patent estate and associated royalty interest of its type 2 diabetes inhibitors, Dipeptidyl Peptidase IV, to New York-based Royalty Pharma for a total cash payment of $609 million.

Scripps Networks Approves Buyback

Scripps Networks Interactive Inc., a provider of lifestyle-oriented content for television and the Internet, said that its board of directors authorized a $1 billion share repurchase program.

The new share repurchase program replaces the company''s previous 5-million share authorization approved in 2008.

Earnings Review

CACI International Inc. ((CACI)), the professional services and information technology company estimated fiscal year 2011 revenue between $3.500 billion and $3.600 billion, and earnings in the range of $133 million to $138 million or $4.25 to $4.40 per share.

McCormick & Company, Incorporated ((MKC)), the spices and seasonings maker said second quarter net sales grew 11% to $883.7 million from $798.3 million in the same quarter last year. Net income in the quarter rose 11.2% to $73.6 million or 55 cents a diluted share compared to net income of $66.2 million or 49 cents per share in the prior-year quarter.

Schnitzer Steel Industries, Inc. ((SCHN)), the recycler of ferrous and nonferrous scrap metal stated third quarter revenues climbed 39.4% to $981.06 million from $703.54 million in the previous year. Net income in the quarter fell 18.3% to $33.03 million or $1.18 per share compared to net income of $40.45 million or $1.43 per share a year ago.

UniFirst Corporation ((UNF)), the provider of workplace uniforms and protective work wear clothing said third quarter revenues rose 11.6% to $291.6 million from $261.2 million in the same quarter last year. Net profit in the quarter fell 4.7% to $18.4 million or 93 cents per diluted share compares with a net profit of $19.3 million or 98 cents per share last year.

Ebay, the owner of PayPal, soared nearly 6% after the latest Fed proposal excluded the online payment sites from its limit on the debit card transaction fees.

Callaway Golf ((ELY)) declined 3% after the golf equipment maker issued a weak outlook for the current quarter and chief executive resigned.