U.S. Weekly Jobless Claims Up; Express Scripts Offers $29 B for Medco

Arthi Gupta
21 Jul, 2011
New York City

U.S. indexes gained after upbeat earnings. Weekly jobless claims rose 10,000 to 418,000. Express Scripts agreed to buy Medco Health for $29 billion. PepsiCo net rose 18%.

[R]9:35 AM New York – U.S. indexes gained after upbeat earnings. Weekly jobless claims rose 10,000 to 418,000. Express Scripts agreed to buy Medco Health for $29 billion. PepsiCo net rose 18%.[/R]

Investors stayed on the sideline ahead of the meeting of U.S. President Barack Obama with the Republican leaders to seek a bi-partisan solution to the debt-ceiling debate.

European indexes edged lower as investors focus on the euro-zone summit later today in Brussels to provide a second bailout package for Greece.

Cautious optimism prevailed in the early trading after German government spokesman Steffen Seibert said that German Chancellor Angela Merkel and French President Nicolas Sarkozy reached an agreement to extend financing to Greece.

Market speculated that France may have dropped its plan to tax €50 billion on banks to pay for Greek bailout.

Asian markets fluctuated ahead of the Eurogroup meeting and mixed economic data from China and Japan.

China''s manufacturing sector contracted for the first time in 28 months in July. The HSBC manufacturing purchasing managers'' index fell to 48.9 in July from 50.1 in June.

In another report, Japan recorded a trade surplus of 70.7 billion yen in June. The exports decline slowed for the first time in three months after dropping more than 10% in April and May.

U.S. Weekly Jobless Claims Rise

Seasonally adjusted weekly jobless claims in the U.S. increased 10,000 to 418,000 from the revised previous week claims of 408,000. The preliminary insured unemployment rate in the week ending July 9 declined to 2.9% from the prior week''s unrevised rate of 3%.

Express Scripts Bus Medco

Express Scripts Inc., the pharmacy benefit management offered to buy Medco Health Solutions Inc. for $71.36 per share in cash and stock or $29.1 billion.

The merger will combine the expertise of two complementary pharmacy benefit managers to accelerate efforts to lower the cost of prescription drugs and improve the quality of care for Americans.

SFN to Be Acquired by Randstad

SFN Group, Inc. agreed to be acquired by the Netherlands-based Randstad Holding NV for $14.00 per share in cash or approximately $771 million. The $14 per share offer price represents a premium of 53% over SFN Group''s closing share price on July 19.

The combination of both the companies will generate revenues of $4.6 billion from North America.

Clorox Confirms Icahn Revised Bid

The Clorox Company confirmed an unsolicited conditional proposal from Icahn Enterprises L.P. to acquire the company for $80 per share. The company’s board will review the new proposal in consultation with its financial and legal advisers.

Earlier, Icahn, the largest shareholder in Clorox with a 9.4 % had offered to buy the consumer products maker for $76.50 per share.

Earnings Review

CA Technologies ((CA)), the software maker said first quarter total revenue rose 9% to $1.16 billion from $1.07 billion in the same quarter last year. Net income in the quarter advanced 3.2% to $228 million or 45 cents per diluted share compared to net income of $221 million or 43 cents per diluted share in the prior-year quarter.

eBay Inc. ((EBAY)), the online auctioneer said second quarter revenue increased 25% to $2.8 billion from $2.2 billion in the same quarter last year. Net income in the quarter slumped 31% to $283.4 million or 22 cents per diluted share compared to net income of $412.2 million or 31 cents per diluted share in the prior-year quarter.

Intel Corporation ((INTC)), the chipmaker said second quarter revenue rose 21% to $13.03 billion from $10.77 billion in the same quarter last year. Net income in the quarter climbed 2% to $2.95 billion or 54 cents per diluted share compared to net income of $2.89 billion or 51 cents per diluted share for the year-ago quarter.

PepsiCo, Inc. ((PEP)), the soft drinks and snacks maker reported second quarter net revenue increased 14% to $16.83 billion from $14.80 billion in the previous year. Net income in the quarter grew 18% to $1.88 billion or $1.17 per diluted share compared to net income of $1.60 billion or 98 cents per diluted share last year.